-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. Arbitration Petition (Ld) No.946 of 2008 L.& T. Finance Ltd. ..Petitioner vs. Ramandeep Singh Bhandari and another ..Respondents Ms.Shakuntala Joshi i/b S.I.Joshi and Co. for petitioner. None for the respondents. CORAM: S.J.KATHAWALLA J. CORAM: S.J.KATHAWALLA J. CORAM: S.J.KATHAWALLA J. 12th January, 2009 January, 2009 January, 2009 P.C. P.C. P.C. 1. The petitioner had provided a loan of Rs.14,06,428/- to the first respondent under a Loan Cum Hypothecation Agreement entered into on 16th August, 2007. The loan was repayable with interest at the rate of 6.45% per annum in 47 monthly equated installments of Rs.29,924/- The second respondent is a guarantor. Clause 12 of the agreement provides for the events of default, Clause 13 of the consequences of default and clause 14 provides for the rights 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. The respondents were -2- liable to pay to the petitioner a sum of Rs.13,50,846.27. The petitioner has invoked the provision for arbitration. 2. Learned Counsel for the petitioner states that the Respondent has been served and filed an affidavit of service which is taken on record and marked as "X" for identification. No reply has been filed to the arbitration petition. In these proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, the petitioner has sought the appointment of the Court Receiver as Receiver of the hypothecated Vehicle 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 the 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 vehicle. The appointment of the Receiver is necessary in order to ensure that the vehicle is not wasted or alienated, thereby defeating the rights of the petitioner. Section 9 empowers the Court to pass an interim measure of -3- protection. Hence, the following order : i) Pending the hearing and final disposal of the arbitration proceedings, the Court Receiver is appointed as Receiver in respect of the vehicle, more particularly described in Exh.E to the petition. ii) The Court Receiver as well as the Advocate for the petitioner shall communicate a copy of this order to the respondents forthwith. iii) 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 regard to the terms and conditions contained in the loan cum hypothecation Agreement (Exh.A to the petition); -4- iv) 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 vehicle, more particularly described in Exh.E with police assistance of concerned police station and without any prior notice to the respondents. The petitioner may in such an event apply thereupon to the Court for further orders including for sale of the vehicle by private treaty. v) Untill 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 vehicle in Exhibit F. 3. The Arbitration Petition is accordingly disposed of. -5- (S.J.KATHAWALLA J.) (S.J.KATHAWALLA J.) (S.J.KATHAWALLA J.)