2021 Supreme(Del) 1768
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M.Singh, J.
Tarun Krishan Aggarwal & Anr. - Appellants
Versus
SHO, P.S. Hauz Qazi & Ors. - Respondents
W.P. (C) No. 2282 of 2021; C.M. Appl No. 6623 of 2021
Decided On : 19-02-2021
Arvind Sharma, Advocate, Sameer Vashisht, Advocate, Manashwy Jha, Advocate, Niraj Kumar, Advocate
Enforcement of orders under Section 17 of the Arbitration & Conciliation Act must comply with the law, and police aid should be sought only after obtaining orders from the executing court.
Headnote:
Arbitration & Conciliation Act - Enforcement of Order - Section 17
Fact of the Case:
The Petitioners availed a loan facility with a bank and made representations for loan restructuring. The bank appointed an arbitrator who passed an order appointing a receiver and allowed police aid for enforcement. The Petitioners alleged harassment and sought relief from the court.
Finding of the Court:
The court found the manner of enforcement of the order under Section 17 of the Arbitration & Conciliation Act to be contrary to law and ordered for a status report from the police and the bank. The proceedings before the arbitrator were stayed, subject to the Petitioners depositing a sum before the court.
Issues: Enforcement of order under Section 17, police involvement, harassment by bank officials, stay of proceedings before the arbitrator
Ratio Decidendi: The court emphasized that orders under Section 17 can only be enforced in accordance with the law and directed for reports from the police and the bank regarding their actions in similar cases.
Final Decision: The court stayed the proceedings before the arbitrator and ordered for reports from the police and the bank. The Petitioners were required to deposit a sum before the court.
JUDGMENT
Prathiba M. Singh, J. - This hearing has been done through hybrid mode (physical and virtual hearing).
2. The Petitioners are stated to have availed of a loan facility with Kotak Mahindra Bank (hereinafter, 'Bank'). The total loan disbursed to the Petitioners was Rs.15,00,000/-. A total amount of Rs.12,88,555.20/- is outstanding, though, the Petitioners have made several representations to the Bank for restructuring of the loan.
3. Various emails were sent by the Petitioners to the Bank for restructuring of the loan, which are annexed along with the petition. However, on 21st November, 2020, the Petitioners received notice dated 4th November, 2020, along with appointment letter dated 2nd November, 2020 by which an arbitrator was appointed by the Bank. The said arbitrator is an advocate based in Chennai. Suddenly, on 21st December, 2020, i.e. within a few weeks of the Petitioners receiving the notice, they received an order dated 7th December, 2020, purportedly passed by the arbitrator.
4. There are two versions of this order dated 7th December, 2020 which are placed on record. In the first version, one Mr. Shorya Verma, has been appointed as the receiver to take possession and custody of the movable properties of the Petitioners mentioned in the schedule. The operative portion of the order reads as under:
"Accordingly, Order is passed directing the appointment of Mr. Shorya Verma as the receiver for taking possession and custody of the moveable properties of respondent, mentioned in the schedule hereunder and for which purpose the said receiver is hereby authorized to take necessary aid from police, in whose jurisdiction the properties are found.
And further the respondents are directed to disclose their other assets as mentioned in para 2 above, to the receiver appointed."
5. In the second version of the order, four persons have been appointed as the receivers. The operative portion of the order is as under:
"Accordingly, Order is passed directing the appointment of Mr. Sanjeev Jain or Ravi Bansal or Ashok Kumar as the receiver for taking possession and custody of the moveable properties of respondent, mentioned in the schedule hereunder and for which purpose the said receiver is hereby authorized to take necessary aid from police, in whose jurisdiction the properties are found.
And further the respondents are directed to disclose their other assets as mentioned in para 2 above, to the receiver appointed."
6. Ld. counsel for the Petitioners submits that Respondent No. 4, i.e., Mr. Ramashankar, an officer of the Bank, along with the Delhi Police, reached the residence of the Petitioners at about 1:00 pm on 30th December, 2020 and forcibly entered the premises. There are allegations that an amount of Rs. 20,000/- was taken by the constable, however, this is disputed by the police. It is further alleged that the Petitioners were forced to make an NEFT transfer of Rs.59,205/- to the Bank and also give the Bank a cheque of Rs.1,18,410/-. Further, on 1st January, 2021, Respondent No.4 is stated to have visited the Petitioners and threatened them into depositing a further sum of Rs.59,205/- into the account of the Bank. Subsequently, Petitioner No.1 visited Respondent No.3 in the police station. Attempts are stated to have been made to meet Respondent No.1, however, Respondent No.1 refused to meet Petitioner No.1. On 6th January, 2021, a complaint was filed by the Petitioners with Respondent No.1 against police officials who had accompanied Respondent No.4 to threaten the Petitioners. A further complaint was made against Respondent No.3 being appointed as the Investigation Officer, on the ground that the Petitioners' complaint was also against him. The Investigating Officer was subsequently changed, however, the Petitioners' submission is that they continue to be harassed by the Respondents. Accordingly, the Petitioners pray for the following:
"(a) direct the respondent No.2 to take appropriate action on the complaint of the petiti