- 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 ARBITRATION ARBITRATION PETITION NO.71 OF 2009 PETITION NO.71 OF 2009 PETITION NO.71 OF 2009. Kotak Mahindra Bank Limited. ..Petitioners. vs. Ramesh Hariram Talreja & Anr. ..Respondents. .... Mr.Rahul Mehta, a/w. Ms.Disha Karambar, for the Petitioners. None for the Respondents. .... CORAM CORAM CORAM: S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. DATE DATE DATE : 30TH JANUARY 2009 : 30TH JANUARY 2009 : 30TH JANUARY 2009. P.C.: P.C.: P.C.: . This petition is under section 9 of the Arbitration and Conciliation Act, 1996 seeking appointment of Court Receiver for the vehicles being TATA LPT 909 GOODS, TELCO 1109 BUS & TELCO 1109 BUS bearing Registration Nos.MH-04-AL-7700, MH-04-G-5555 & MH-04-G-8888 (the said vehicles) with all powers under Order 40 of the Code of Civil Procedure, 1908 including the powers to resale and pay over the net sale proceeds to the petitioners in terms of prayer clause (c) of the petition. 2. The petitioners had under a loan cum hypothecation agreement advanced loans to respondent no.1 for the - 2 - purchase of said vehicles. The said vehicle were purchased by the respondent no.1 vide loan agreement bearing no.SA 80836, dated 27th February 2006. It is the case of the petitioners that the respondent no.1 has failed to pay the amounts due and payable to the petitioners under the agreement and on the date of filing of the petition an amount of Rs.3,24,418/- is due and payable by the respondent to the petitioners. 3. The Advocates for the petitioners submit that as agreed in clause 8.12 of the arbitration clause, they have appointed Shri A.N. Pujari as a sole arbitrator. The respondents have at no point of time accepted the service of the notices/ proceedings forwarded to them by the petitioners and or their Advocates. The petitioners have also taken out proceedings under section 138 of the Negotiable Instruments Act against the respondent no.1. However, the respondents have not accepted service even as regards the said proceedings and the same are being proceeded ex-parte. The petitioners have also tendered an affidavit proving service wherein the petitioners have shown that despite having served the papers and proceedings of this petition on the respondents, the papers are returned with an endorsement "Intimated". - 3 - The petitioners apprehend that the respondents shall defeat the rights of the petitioners by disposing of the vehicles hypothecated to the petitioners. 4. 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 of the hypothecated vehicles. The appointment of the Receiver is necessary in order to ensure that the said vehicles are 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 the hearing and final disposal of the arbitration proceedings, the Court Receiver is appointed as Receiver in respect of vehicles TATA LPT 909 GOODS bearing Registration No.MH-04-AL-7700, TELCO 1109 BUS bearing Registration NO. MH-04-G-5555 and TELCO 1109 BUS bearing Registration No.MH-04-G-8888, with - 4 - direction to take forcible possession of the said vehicles with police assistance, if required, and without any prior notice to the respondents. (ii) The Court Receiver shall within a period of two weeks after taking possession, give an option in writing to the respondents to act as agents of Receiver in respect of the said vehicles. The respondents shall be given two weeks time by the Court Receiver from the date of receipt of Court Receiver’s Communication/letter to exercise such option. In the event of the respondent/s being desirous of acting as agents of the Receiver, they shall be appointed as agents of the Receiver, 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); (iii) In the event that the respondents do not communicate their willingness to the Receiver to act as agents within a period of two weeks from the receipt of communication from the Court - 5 - Receiver, it would be open to the petitioner to apply to the Court for further orders including for sale of the said vehicles by private treaty. (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 vehicles. 5. The petition is accordingly disposed of with no orders as to costs. [S.J.KATHAWALLA, [S.J.KATHAWALLA, [S.J.KATHAWALLA, J.] J.] J.]