- 1 - IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION. ORIGINAL CIVIL JURISDICTION. ORIGINAL CIVIL JURISDICTION. jmi ARBITRATION PETITION NO.2 OF 2009. Kotak Mahindra Bank Ltd. ..Petitioners. vs. Sanjay Kaluram Jain & Ors. ..Respondents. .... Mr. Rahul Mehta, a/w. Ms.Disha Karambar, for the Petitioners. Mr.A.S. Murty, for Respondents. .... CORAM CORAM CORAM: S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. DATE DATE DATE : 13TH MARCH,2009 : 13TH MARCH,2009 : 13TH MARCH,2009. P.C.: P.C.: P.C.: . This petition is filed by the petitioners under section 9 of the Arbitration and Conciliation Act, 1996. 2. It is the petitioners case that the respondent nos.1 and 2 have under a loan agreement dated 26th June 2006 bearing no.SA 104167 provided loan to the respondent no.1 & 2 for Rs.15,00,000/-. The respondent no.3 is the guarantor in respect of the said loan provided by the petitioners to respondent no.1 & 2. Under clause 1.5 of the loan agreement, the respondents were liable to repay the petitioners the said loan with interest thereon by installments on the respective due dates as set out in schedule-I to the said loan agreement. Clause 8.12 of the loan agreement provides for arbitration. It is the petitioners’ case that during the conduct of the loan agreement, the - 2 - respondents have defaulted and an amount of Rs.7,25,447/- is due and payable by the respondents under the loan agreement. The petitioners have invoked the said arbitration provision under the agreement by their letter dated 29th January 2009. 4. By an order dated 30th January 2009, the respondents were ordered and directed to file a detailed affidavit with appropriate particulars disclosing all their assets (moveable and immovable of any nature whatsoever) within a period of 4 weeks, i.e. on or before 12th February 2009. 5. Accordingly, the respondent no.1 has filed an affidavit dated 10th February 2009. In paragraph 9 of the said affidavit, respondent no.1 has stated as follows :- "9. I say that only an amount of Rs.4,50,584/- is to be repaid. This itself demonstrates that our intention is not malafide. We have made substantial amount. In fact, we have agreed to pay an amount of Rs.25,000/- in this month itself to the representative of the petitioner bank." 6. The respondent no.1 has set out in Annexure-A to - 3 - the said affidavit dated 10th February 2009, the moveable and immovable properties of the respondents. From the said annexure, it can be seen that almost all the properties are mortgaged/hypothecated to bank/financial institutions. 7. Since it is the respondents’ case that only an amount of Rs.4,50,584/- is due and payable by the respondents to the petitioners, and that no other amount is due and payable by them to the petitioners, this Court called upon the petitioners to give the entire statement of accounts to the respondents, in support of their case that an amount of Rs.7,25,447/- together with interest thereon @ 3% per month was due and payable by the respondents to the petitioners on the date of the filing of the petition. A statement as directed by the Court was prepared and handed over to the Advocate for the respondents who was thereafter unable to make any submission in support of the respondents’ contention that only an amount of Rs.4,50,584/- was due and payable by the respondents to the petitioners. 8. In view of the conduct of the respondents set out hereinabove, it is clear that the conduct of the respondents lack bonafides and that it is likely that the petitioners may not be able to recover from the - 4 - respondents the decretal amount awarded by the arbitrator under the award. Therefore, as an interim measure, this Court is of the view that the following order is required to be passed against the respondents and in favour of the petitioners in the above petition. O R D E R R D E R R D E R Pending the hearing and final disposal of the arbitration proceedings and thereafter till such time the award is enforced under section 36 of the Arbitration and Conciliation Act, 1996, the respondents are ordered and directed to furnish a solvent security to the Prothonotary and Senior Master, High Court, Bombay to the sum of Rs.7,25,500/- on or before 8th May 2009 to secure the claim of the petitioners. 9. In view of the above order, the arbitration petition stands disposed of. The respondents shall pay costs of the petition to the petitioners. [S.J.KATHAWALLA, [S.J.KATHAWALLA, [S.J.KATHAWALLA, J.] J.] J.]