1 arbp275.11.sxw ssm IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO. 275 OF 2011 L & T Finance Limited ....Petitioner. Vs. M/s. Tejas Infrastructure Development & Anr. ....Respondents. Ms. S.I. Joshi i/by M/s. S.I. Joshi & Co. for the Petitioner. Mr. Sanjay Jain a/w Mr. Lalit V. Jain for Respondent No.1. CORAM : ANOOP V. MOHTA, J. DATE : 17th MARCH, 2011 P.C.: The Petitioner has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act), as there is defaults in making the payment, based upon the Loan-cum- Hypothecation Agreement between the parties. There is an arbitration clause and this Court has jurisdiction to pass order as there exists Arbitrable claims. 2 The learned counsel appearing for Respondent No.1, basically 2 arbp275.11.sxw ssm contended that there is no case made out to appoint the Court Receiver as contemplated under Order XL Rule 1 of the Civil Procedure Code (for short, the CPC), basically to grant such order, in so far as the prayer of injunction/ third party rights or interest is concerned. Respondent No.1, in her affidavit made positive statement that they are not willing to create any third party right or interest in respect of the vehicle in question. Admittedly, the Respondents have been using the said vehicles since the date of agreement. There are defaults. Therefore, the present Petition. 3 As per the claim statement filed by the Petitioner, the basic amount due is Rs.10,90,478/-. The remaining amount is overdue compensation which the Respondents, as per the agreement, as alleged, entitled to pay. The learned counsel appearing for the Respondents is opposing the same but fairly conceded so far as the principle amount as claimed in particulars of the claim. However, it is pointed out that, though following issuance of termination of notice, they have deposited two installments to the extent of Rs.1,65,000/-. That amount ought to have been taken care of at the time of filing the present Petition. The point is, the basic amount about Rs.9 lacs still due and payable, which in my view, needs to be secured at this stage 3 arbp275.11.sxw ssm itself, as there is dispute with regard to the entitlement of the Petitioners declared the overdue compensation to the extent of Rs.16,80,258/- and that will be adjudicated before the Arbitrator. 4 The learned counsel appearing for the Petitioner has pointed out that they have already appointed an Arbitrator as per the Agreement. The Respondents however, have not yet received any notice from the Arbitrator, but the fact remains that the Arbitrator, as per the agreement, has been appointed. All these disputed points can be adjudicated before the Arbitrator. 5 Section 9 contemplates interim measure/protection pending the Arbitration Proceedings as initiated. 6 Admittedly, the Respondents are using the vehicles since 2007. The statement is made that the vehicles are still in their possession and they are not intend to sell or transfer or create third party rights or interest in the same, that in my view, even the important facet whereby the vehicle in question and to some extent the amount as claimed, are secured. 4 arbp275.11.sxw ssm 7 The learned counsel appearing for the Respondents, on instructions, makes statement that the Respondents will deposit Rs.50,000/- regularly to cover the amount so far as the arrears are concerned. As overdue compensation is in dispute, they will raise appropriate submission before the Arbitrator. The learned counsel appearing for the Petitioner submits that whatever the settlement and/or proposal which Respondents wants to submit, they are free to do so by making appropriate application with the Petitioner bank. 8 What remains is the issue with regard to the appointment of the Receiver, at this stage of the proceedings. The amount as per the Petitioner, after termination, is about Rs.17 lacs. As the contract terminates then the claim of overdue compensation, apart from the possession of the vehicles/machineries in question, that in my view, is always subject to the finality of the Arbitration proceedings so initiated. The defaults in basic installments in the present case, are not in dispute. 9 The submission of the learned counsel appearing for the Petitioner for appointment of Receiver, in the present facts and circumstances, though not necessary be granted in view of the 5 arbp275.11.sxw ssm averments made, yet in my view they are entitled to ask for security as prayed in prayer clause (h). However, I am inclined to restrict the same to Rs.9 lacs as they have already deposited the amount of Rs.1,60,000/-, as referred above. In my view, that will serve the purpose, as the Petitioner is also interested in securing the amount, at this stage of the proceedings as they themselves have invoked Arbitration. 10 In the result, the following order- (i) Ad-interim relief pending the disposal of the Arbitration proceedings in terms of prayer clause (f). (ii) The Respondents to furnish security to the satisfaction of the Prothonotory and Senior Master, High Court Bombay, to the extent of Rs.9 lacs within a period of three weeks from today, failing which, prayer clause (a) stands granted (except bracketed portion). However, the liberty is granted to both the parties to apply for appropriate order thereafter. 6 arbp275.11.sxw ssm (iii) The liberty is also granted to the parties to apply for settlement, even for installments. The Petitioners are at liberty to consider the case of the Respondents, according to the law. (iv) The Petition is accordingly disposed of. No costs. (ANOOP V. MOHTA, J.)