- 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.551 OF 2008. Kotak Mahindra Bank Ltd. ..Petitioners. vs. Kantilal Liladhar Rambhiya & Anr. ..Respondents. .... Mr.Nikhil Mehta, a/w. Disha Karambar, for Petitioners. None for Respondents. .... CORAM CORAM CORAM: S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. S.J.KATHAWALLA, J. DATE DATE DATE : 27TH FEBRUARY,2009 : 27TH FEBRUARY,2009 : 27TH FEBRUARY,2009. P.C.: P.C.: P.C.: . This petition is under section 9 of the Arbitration and Conciliation Act, 1996 seeking orders/directions against the respondents to furnish solvent security to the sum of Rs.8,56,368/- together with interest at the rate of 3% per month, due and payable by the respondents to the petitioners. 2. The petitioners are involved in the business of providing financial facilities such as personal loans, home loans, commercial vehicle loans, etc. The petitioners have stated that the respondent no.1 alongwith respondent no.2 had approached the petitioners to grant to them financial assistance to enable the respondent no.1 to purchase vehicle, viz. Eicher 20.15. The petitioners state that the respondents had represented to them that they had sound reputation in - 2 - their field of business. The respondents had further represented that they had adequate facility to pay the desired loan and that they shall never commit any defaults in respect of the amounts that would be due and payable to the petitioners after obtaining the said loan from the petitioners. The petitioners based on such representations made by the respondents entered into a loan cum hypothecation cum guarantee agreement dated 31st August 2006 bearing No.CV-1303524 & CV-1303577 (two tranches) between them and respondent nos. 1 and 2 on terms and conditions more particularly contained in the said loan agreement. 3. The said loan provided by the petitioners to the respondents was to the tune of Rs.17,24,000/-. The petitioners state that the outstanding amount now due and payable by the respondents to them is a sum of Rs.8,56,368/- together with interest at the rate of 3% per month as more particularly mentioned in the aforesaid loan agreement. The principal amount due to the petitioner by the respondents is a sum of Rs.7,79,958/- and the interest that is due and payable is a sum of Rs.76,410/-. 4. Pursuant to clause 2.7 of the loan agreement dated 31st August 2006, the respondents were liable to pay - 3 - interest @ 3% per month on unpaid amounts in the event of defaults. The petitioners have submitted that the respondents have regularly defaulted in payment of the loan amount. The petitioners submit that the cheques issued by respondent no.1 have also bounced and that proceedings under section 138 of the Negotiable Instruments Act, 1881 are pending against the respondents. 5. The petitioners further state that pursuant to clause 2.6 of the said loan agreement, the respondent nos.1 & 2 were liable to repay to the petitioners the said loan and interest thereon by installments on the respective due dates as set out in Schedule-I of the said loan agreement. The petitioners have submitted that it is established beyond doubt that the respondents are not wanting to repay the said loan amount alongwith interest and that they are only interested in duping the petitioners. None appears for the respondents though duly served. 6. From the aforesaid facts, it is prima-facie established that the respondents have taken the loan from the petitioners on terms and conditions set out in the loan agreement and that an amount of Rs.8,56,368/- together with interest @ 3% per month, as per the terms - 4 - and conditions of the loan agreement, is due and payable by the respondents to the petitioner under the two tranches of the loan agreement bearing Nos.CV-1303524 and CV-1303577. The relief sought in the petition in terms of prayer clause (a), can be granted in view of the facts and circumstances of the present case. 7. In view thereof, it would be in the interest of justice, as an interim measure of protection, to direct the respondents to secure the amount in dispute in the arbitration. The Court is empowered to do so under section 9(ii) of the Arbitration and Conciliation Act, 1996. The respondents are, therefore, ordered and directed to furnish solvent security to this Court within a period of four weeks from the date of service/ receipt of this order for a sum of Rs.8,56,368/- to the satisfaction of the Prothonotary and Senior Master, High Court, Bombay, which is prima-facie due and payable by the respondents as on 30th September 2008 to the petitioners. 8. In view thereof, the petition stands disposed of with no order as to costs. [S.J.KATHAWALLA, [S.J.KATHAWALLA, [S.J.KATHAWALLA, J.] J.] J.]