SREI EQUIPMENT FINANCE LTD. vs ABDUL VAHEED & ANR.

In this application under Section 9 of the Arbitration & Conciliation Act, 1996, as amended by Act 3 of 2016, on November 8, 2017 this Court appointed a Receiver to take possession of the hypothecated asset from the respondent no.1.

The respondent no.1 filed an application, G.A. No. 3570 of 2017, for recalling of the said order dated November 8, 2017. By an order dated December 8, 2017, this Court rejected the said application of respondent no.1 being G.A. No.3570 of 2017 and changed the personnel of the Receiver.

The respondent no.1 carried both the said orders dated November 8, 2017 and December 8, 2017 in appeal before the Division Bench. However, the Division Bench did not entertain any of the said appeals filed by the respondent no.1 and in the mean time, the Receiver has taken possession of the hypothecated asset.

Today the Receiver has filed his report before this Court disclosing that he has taken possession of the hypothecated asset from the concerned respondent. He has also provided the respective parties with a copy of his report. Let the report filed by the Receiver be kept on record.

From the order dated January 11, 2018 in the above appeals, it appears that while disposing of the appeals filed by the respondent no.1 the Division Bench directed that the asset will be preserved and not used by the finance company. The Division Bench further directed that appropriate directions shall be sought from the Arbitrator in course of the arbitral reference as to how the asset will be dealt with.

In view of the above direction passed by the Division Bench in the said order dated January 11, 2018, there is no scope for passing any further direction in this application. Accordingly, the Receiver, appointed by this Court in this application, shall remain in possession of the hypothecated asset until further direction being passed by the Arbitrator in the arbitral proceeding.

The petitioner shall pay a monthly remuneration of 400 GMs to the Receiver. The petitioner will be entitled to add to its claim against the respondents all amounts already paid and further to be paid by it to the Receiver on account of his remuneration.

Mr. Banerjee, learned Advocate appearing for the petitioner, has produced a letter dated December 22, 2017, issued by the petitioner, whereby it has nominated the Arbitrator in terms of arbitral agreement between the parties.

However, Mr. Hussain, learned Advocate appearing for the respondent no.1 submits that the respondent no.1 is yet to receive any letter of reference allegedly issued by the petitioner to the arbitrator. It was, however, pointed out by Mr. Banerjee thast a copy of the letter of invocation of the arbitral agreement by the petitioner and thereby appointing the Mr. Dolan Dasgupta, Advocate as the arbitrator has been served upon the advocate-on-record of the respondent no. 1 namely, Mr. K.L. Jadav which could not be disputed by the learned advocate for the respondent no. 1.

Before proceeding with the arbitration, the petitioner shall also ensure that the letter of nomination of the Arbitrator is forwarded to both the respondents at their respective addresses mentioned in the agreement for loan executed by them.

If the respondent no.1 refuses to receive a copy of the notice appointing the arbitrator by the petitioner, in that event, the service of such notice already made by the petitioner on the advocate on record representing the respondent no.1 before this Court shall be deemed to be a valid service of notice on the respondent no.1.

If the respondentno.2 is not found to be available at his address mentioned in the loan agreement and if he has not informed the petitioner of any change of his address, the arbitrator may direct substituted service of the notice of arbitration in any newspaper. With the above directions A.P. No.423 of 2017 stands disposed of.

There shall, however, be no order as to costs.

Urgent certified website copy of this order, if applied for, be made available to the parties subject to compliance with the requisite formalities.