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IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J. MEHTA, J.
Anil Kumar Singh – Appellant
Versus
M/s Mahindra & Mahindra Finance Service Pvt. Ltd. – Respondent
FAO No. 357 of 2016
Decided On : 04-09-2017
Arbitration and Conciliation Act - Receiver - Section 9
Fact of the Case:
The appellant challenged the order appointing a Receiver under Section 9 of the Arbitration and Conciliation Act, 1996, for the repossession of a vehicle purchased with a loan from the respondent.
Finding of the Court:
The court found that the order appointing the Receiver was reasonable and dismissed the appellant's appeal, holding that the order of the court below was correct.
Issues: The issues included the challenge to the order appointing a Receiver under Section 9 of the Act, the maintainability of the appeal, and the condonation of delay in filing the appeal.
Ratio Decidendi: The court held that the heading of a petition is not material and that the order passed by the court below was correct. The court also dismissed the appeal with costs due to the frivolous nature of the appellant's arguments and the delay in filing the appeal.
Final Decision: The appeal was dismissed with costs of Rs. 20,000/- to be paid within six weeks from the date of the judgment.
VALMIKI J. MEHTA, J.
FAO No. 357/2016 and C.M. Appeal No. 205/2017 (for condonation of delay of 270/712 days in filing the appeal)
1. This first appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) is filed by the borrower impugning the order dated 30.5.2013 passed under Section 9 of the Act.
2. By the impugned order a Receiver has been appointed with respect to vehicle Mahindra Champion and which was purchased by the appellant as per the loan given by the respondent. The impugned order reads as under:-
“30.05.2013
Present: Counsel for petitioner.
Present petition has been filed by the petitioner under Section 9 of the Arbitration and Conciliation Act seeking interim relief for appointment of Receiver.
Petitioner is a company incorporated under the Companies Act, which is engaged in the business of rendering financial/credit facility in the form of loan.
Respondent applied for loan for the purpose of purchasing vehicle make MAHINDRA CHAMPION bearing Engine no. A0J0382461 and chasis no. A5J14899. The loan of Rs. 305795/- was acceded to the respondent vide written Loan um Hypothecation cum Guarantee Agreement bearing contract no. 1354624 and the same was agreed to be repaid by the respondent in 35 equated monthly installments of Rs. 8737/- each. The respondent has paid only 24 installments and 7 installments are unpaid. As the date respondent is unable to pay a sum of Rs. 112922/- to the petitioner. As the respondent failed to repay the loan amount and interest thereon despite numerous demands, petitioner company issued a legal notice dated 06.05.13 calling the respondent to make the payments. However, respondent did not respond the said notice hence this petition.
Ld. Counsel for petitioner has pointed out as per the information, the respondents are intending to dispose off/sell/transfer the said vehicle and hence, petitioner has prayed that a Receiver be appointed to repossess the vehicle.
Prima-facie, a case for grant of an order for interim custody of the vehicle, so as to secure the amount due and payable to the petitioner by the respondents appear to be made out. Delaying or postponing the grant of interim protection to which the petitioner appears entitled to is likely to defeat the object of filing the petition.
In view of the same Sh. BAHADUR SINGH, authorized representative officer of the petitioner company is appointed as a receiver in this case to take into his custody the vehicle/machine make MAHINDRA CHAMPION bearing Engine no. A0J0382461 and chassis no. A5J14899 from the respondent, his agents or any other person found possessing the vehicle. Copy of identity card of representative of the petitioner showing that he is working with the petitioner company has already been filed. Following directions accordingly issued for the Receiver:
An inventory is respect of the attachments in the vehicle shall be made by the receiver and copy of the same be given to the person from whose possession the vehicle is possessed and the petitioner who shall file the same in Court along with the report of the receiver.
The condition of vehicle shall be noted and the receiver shall take photograph of the repossessed vehicle from all sides and shall ensure that vehicle is kept in the same condition as it was repossessed.
An appropriate receipt shall be give to the person from whose custody the vehicle is taken. The vehicle in question shall not be sold or disposed of or parted with without due permission of the Court.
In case the respondent clears all the installments due, the vehicle will not be repossessed and if repossessed the vehicle is to be released within three days of receipt of due installments.
An affidavit indicating repossession of vehicle be filed within 3 days of its repossession along with its photographs and inventory.
The receiver will inform the respondent the option of resolving the dispute amicably by settlement in Mediation Cell, Tis Hazari Courts, Delhi and will also
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