IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.262 OF 2008 L & T Finance Limited, .. Petitioners. Vs Mahendrasingh M Rathod and Anr. .. Respondents Ms Shakuntala Joshi, i/b S.J.Joshi & Co for the petitioners. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. DATE : 23rd June, 2008 DATE : 23rd June, 2008 DATE : 23rd June, 2008 ORAL ORDER: ORAL ORDER: ORAL ORDER: 1. Heard learned counsel for the petitioner. None for the respondents, though served. 2. The counsel for the petitioners has prayed for an appointment of the Court Receiver, High Court, with direction to take possession of the excavator, for which they have provided loan to the respondents, with liberty to the respondents to approach this court seeking their appointment as an agent of the court receiver within the time frame. In the alternative, the petitioners seek relief in terms of prayer clause (b) of the petition. It appears that the petitioners are in the business of providing loan to their customers as per their requirements and proposals submitted by them from time to time. Accordingly, a loan of Rs.59,94,000/- was paid to the respondents and it was repayable in 36 monthly instalments from 26.5.2006 to 26.4.2009. The petitioner states that as of today there is a huge outstanding of Rs,12,87,715/- towards the loan instalments. Despite repeated reminders and requests, the respondents, according to the petitioners, have failed and neglected to pay the loan instalments including the interest thereof. It appears that there was an agreement executed between the parties under which the respondents were liable to pay the instalments as provided therein. Clause 12 of the agreement provides for the events of default, clause 13 provides for consequences of default and clause 14 provides for the right of the petitioner on default including repossession of the asset. Clause 17 provides for arbitration. There has been a default on the part of the respondents. This Court is informed that the petitioner has invoked the provisions for arbitration. 3. Learned counsel for the petitioner states that the respondents have been served and have already filed an affidavit of service. The respondents have chosen to remain absent all throughout. They have not filed any reply to the arbitration petition. In the circumstances, the petitioner has prayed for the appointment of the court receiver as Receiver of the hypothecated excavator, more particularly described in Exhibit-E to the petition. In the absence of any defence or contest by the respondents, the averments contained in the petition would have to be accepted. There has been a default in payment of the outstanding dues. It would, therefore, be necessary to safeguard the interest of the petitioner by appointing the Court Receiver as receiver of the hypothecated excavator. The appointment of the receiver is necessary in order to ensure that the excavator is not wasted or alienated, thereby, defeating the rights of the petitioner. Section 9 empowers the court to pass an interim measure of protection. Hence, the following order. (i) Pending hearing and final disposal of the arbitration proceedings, the Court Receiver is appointed as receiver in respect of the excavator, more particularly described in Exhibit-E to the petition. The Court Receiver, as well as the advocate for the petitioner shall communicate a copy of this order to the respondents forthwith; (ii) within a period of four weeks from the date of the communication of the order, the respondents shall be at liberty to inform the Receiver that they are desirous of acting as agents of the Receiver. The respondents shall then be appointed by the Court Receiver as agents subject to security and royalty. The Receiver shall determine the quantum of security and royalty having regards to the terms and conditions contained in the Loan-cum-hypothecation Agreement. (iii) In the event that the respondents do not communicate their willingness to the Receiver to act as agents within the period stipulated, it would be open to the Receiver to take forcible possession of the hypothecated excavator (as described in Exhibit-E to the petition). The petitioner may in such an event, apply thereupon to the Court for further orders including for the sale of the excavator. (iv) Until the Receiver takes possession, there shall be an interim injunction, restraining the respondents from alienating, parting with possession or encumbering or creating any third party rights in respect of the said excavator. 4. The Arbitration Petition is accordingly disposed of. (D.B.Bhosale, J.) (D.B.Bhosale, J.) (D.B.Bhosale, J.)