The court balanced the rights of the parties and the public interest in deciding on the appropriate relief, considering the provisions of the Arbitration and Conciliation Act, 1996.

JUDGMENT :

1. The Court: The petitioner argues that there are admitted defaults on the part of the respondents, which violates the terms of the agreement-in-question, which also contains an arbitration clause.

2. Learned Counsel categorically relies on Clause 12.1 of the agreement in question wherein it is provided that the terms laid down therein are fundamental and essential terms. Sub clause (a) of Clause 12.1 includes payments of all rentals on time by the lessee as one of such fundamental terms.

3. Clause 13.1(a) provides categorically that if the lessee has not performed on time any of its obligations under the agreement, including any of the essential terms referred to in Clause 12, an event of default shall be deemed to have occurred. Such defaults may lead to termination of the agreement in terms of Clause 14 of the agreement. Sub-clause 14.3, in particular, categorically provides that if the lessee fails to surrender the equipment the lessor shall have the right at any time at its discretion and without notice to the lessee to enter any premises where the equipment is or believed to be, dismantle and repossess the same and to take other ancillary steps.

4. Learned Counsel submits that the petitioner could very well have taken possession of the machinery and equipment-in-question in terms of Clause 14.3, but has been fair enough to approach Court to obtain a formal order in consonance with due process of law.

5. It is further contended on behalf of the petitioner that there is no obligation on the petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 to refer the matter to arbitration prior to 90 days from the date of any order of interim measure for protection, if passed under Section 9(1) of the said Act. It is further contended that even such period of 90 days is not mandatory as have been held by Division Benches of this Court and as is evident from the latter portion of sub-Section (2) of Section 9 which includes the phrase “or within such further time as the Court may determine”.

6. Learned Counsel relies on Section 9(1) (ii) (c) of the 1996 Act to stress the point that the petitioner is entitled to seek, inter alia, an order of preservation or inspection of any property which is a subject matter of the arbitral dispute or to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorising any employee to be taken or any observation to be made or experiment to be tried which may be necessary or expedient. Clause (d) of Section 9(1) (ii) categorically empowers the Court to grant interim injunction or appoint a Receiver.

7. In the present case, it is contended by the petitioner, in view of the admitted default of the respondents, at least a Receiver ought to be appointed not only to take inventory but also to take physical possession of the equipment and goods which are the subject matter of the dispute in arbitration and were kept as security for the loan taken by the respondents. It is also submitted that the respondents have defaulted in putting in amounts timely in the escrow account in terms of the agreement.

8. Learned Senior Counsel appearing for the respondents contends at the outset that the termination of agreement, as alleged by the petitioner, is itself under challenge. It is submitted that several invoices have been raised and due amounts thereon paid by the respondents to the petitioner much after the purported termination notice, thereby giving a go-bye/ waiving such purported termination. As such, any minor default in repayment of the instalments cannot entail an order directing a Receiver to take possession of the equipment at this juncture.

9. Learned Senior Counsel further contends that in about 8 months, after filing of the application and initial orders of affidavits, the petitioner has been unable to obtain any ad interim order. Moreover, no attempt has been made by the