IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08/04/2013 CORAM THE HON'BLE MR.JUSTICE VINOD K.SHARMA A.No.1936 of 2010 and A.No.5536 of 2012 A.No.1936 of 2010 ----------------- M/S. DHANDAPANI FINANCE LTD REP BY ITS ASSISTANT MANAGER (LEGAL) NO.14 RAMAKRISHNA STREET T NAGAR CHENNAI 17 VS B.T. RAVI 86 MARUTHUPANDIYAR ST SIPCOT 9A NATHAMPANNAI, PUDUKOTTAI R. RADHIKA 86 MARUTHUPANDIYAR ST SIPCOT 9A NATHAMPANNAI, PUDUKOTTAI M. SARAVANAN 6131-28 MARIAMMAN KOIL ST THIRUGOKARNAM, PUDUKOTTAI A.No.5536 of 2012 ----------------- B.T. RAVI 86 MARUTHUPANIYAR ST SIPCOT 9-A NATHAMPANNAI PUDUKOTTAI VS M/S. DHANDAPANI FINANCE LTD NOW KNOWN AS DFL INFRASTRUCTURE FINANCE LTD. REP.BY ASST.MANAGER (LEGAL) NO.14 RAMAKRISHNA ST T NAGAR CHENNAI 17 ORDER A.No.1936 of 2010: M/s.Dhandapani Finance Limited has moved this application under Section 9 of the Arbitration and Conciliation Act to appoint an Advocate Commissioner with a direction to seize 2006 Model Bajaj Tempo Traveller bearing Regn.No.TN-48-F-2553, Chassis No.T58018935A06 and Engine No.D18006391. A.No.5536 of 2012: Mr.B.T.Ravi / applicant has moved this application under Section 9 of the Arbitration and Conciliation Act to direct the respondent / M/s.Dhandapani Finance Limited to return the schedule mentioned vehicle to the applicant, as the seizure and custody of vehicle with the respondent had become bad in law due to non compliance of the order dated 06.04.2010 passed by this Court in A.No.1936 of 2010. A.No.1936 of 2010 (M/s.Dhandapani Finance Limited vs. B.T.Ravi) 2. In support of the application, it is pleaded, that the applicant is a non banking company financial company having its retail finance division, which is engaged in the business of granting loan, hire purchase and leasing of industry equipment, machinery trucks and other equipment and vehicles. 3. The respondent approached the applicant's branch office at Trichy during the month of June, 2008 and requested for loan to purchase 2006 Model Bajaj Tempo Traveller. The respondent was advanced a loan of Rs.4,25,000/- (Rupees Four Lakhs and Twenty Five Thousand only) for purchase of Bajaj Tempo Traveller and the amount was agreed to be repaid back in 36 monthly installments of Rs.16,463/- (Rupees Sixteen Thousand Four Hundred and Sixty Three only) and the Tempo was hypothecated in favour of the applicant. 4. The submission of applicant is that the respondent was irregular in making payment, which resulted in foreclosing the account of applicant. It is pleaded, that on 28.02.2010, a sum of Rs.5,17,520.61 (Rupees Five Lakhs Seventeen Thousand Five Hundred Twenty and Paise Sixty One only) towards installments and additional finance charges were outstanding against respondent. 5. In the affidavit, it is stated, that the applicant has no other option but to raise dispute invoking arbitration clause to resolve the disputed. It is also pleaded, that applicant has been taking to appoint an Arbitrator. 6. This Court, in view of the averment made in the affidavit, passed an exparte order, appointing an Advocate Commissioner to seize the vehicle. While appointing Advocate Commissioner, directions were issued to the applicant to invoke arbitration clause within three weeks of the passing of order. 7. It is now well settled law, that custody of vehicle by Advocate Commissioner is legal custody, which the applicant was supposed to retain till finalization of the arbitration proceedings. 8. Inspire of the specific directions by this Court, applicant has failed to initiate arbitration proceedings to adjudicate the dispute. Therefore, interim order passed by this Court deserves to be recalled in view of law laid down by the Hon'ble Supreme Court in Firm Ashok Traders vs. Gurumukh Das Saluja, AIR 2004 SC 1433. 9. The papers filed on record show, that it was only on 25.04.2010, that Mr.P.Madhan was appointed as Arbitrator, but this letter was not endorsed to the respondent and respondent was kept in dark about appointment of Arbitrator. 10. The respondent has also placed on record notice issued by the Advocate dated 23.12.2010, pointing out that the applicant has failed to comply with the direction issued by this Court to initiate arbitration proceedings. 11. The appointed Arbitrator did not proceed with the matter till December, 2010 because the applicant was unable to produce the original document to prove the claim. This itself shows the bias of the arbitration, as under law or acceptance of appointment, it was duty of the Arbitrator to enter reference and issue notice to both the parties and not act as agent of appointing party. 12. It is not understood under which law, the Arbitrator was to wait for the applicant to complete their papers etc, so as to enter reference after appointment. It is also not disclosed why no notice was issued. 13. The application for appointment of Advocate Commissioner therefore was not bonafide and was an attempt to secure the vehicle for sale without following due process of law. This Court has been used as recovery agent to seize the vehicle, which otherwise was not permitted, in absence of intention to initiate arbitration proceedings. 14. The application was not bonafide, which is proved by the fact, that even though no arbitration proceedings commenced, the vehicle has been sold without notice to the respondent. 15. The action of applicant, therefore, is to be depreciated in strong words, as the applicant has misused the process of this Court to harass the respondent to seize the vehicle without giving him opportunity to defend himself either before this Court or before Arbitrator, and his source of livelihood is taken away without following due process of law. 16. The equitable jurisdiction under Section 9 cannot be exercised in favour of applicant for not having approached this Court bonafidely. The application was moved only to seize the vehicle to sell it. The applicant also did not seek permission of this Court to sell the vehicle. 17. In view of seizure of the vehicle by the Advocate Commissioner, the vehicle was in custody of Court, which could not be sold in absence of judicial order. This act amounts to taking away vehicle from judicial custody without permission. 18. Consequently, A.No.1936 of 2010 is dismissed with costs, which are assessed at Rs.20,000/- (Rupees Twenty Thousand only). A.No.5536 of 2012 (B.T.Ravi vs. M/s.Dhandapani Finance Limited) 19. In view of dismissal of A.No.1936 of 2010, as a consequential relief, A.No.5536 of 2012 deserves to be allowed. However, the relief claimed in A.No.5536 of 2012, cannot be granted, as M/s.Dhandapani Finance Limited has sold the vehicle seized under the orders of this Court illegally without permission from this Court or from the Arbitrator. However, the relief claimed is modified and M/s.Dhandapani Finance Limited is ordered to pay to Thiru B.T.Ravi/applicant in A.No.5536 of 2012 a sum of Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand only), representing the amount paid by him to the finance company and the compensation payable due to the harassment caused to him by seizure of vehicle and sale thereof. Thiru B.T.Ravi is also entitled to interest @ 6% on this amount of Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand only) from the date of seizure till payment. ar