Personal guarantees impose binding restrictions on asset dealings, reaffirming the need for arbitration in disputes regarding mortgages and lending agreements.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)

I.A. 6422/2021 (for exemption from filing attested/signed/affirmed affidavits)

1. The present application on behalf of the Petitioner seeks exemption from filing attested/affirmed affidavit(s).

2. The application is allowed, subject to the Petitioner filing the exempted documents within two weeks from the day the lockdown restrictions imposed by the Government of NCT of Delhi are lifted and the facility of attestation is resumed.

3. The application stands disposed of.

O.M.P.(I) (COMM.) 370/2020 & I.A. 5843/2021 (for directions on behalf of the R-1-Mr. Praful Satra under Section 151 of the CPC, 1908)

4. The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the `Act'] seeks reliefs in the nature of directions to the Respondents to deposit the outstanding amount due and payable as on 7th October, 2020; disclose on affidavit the details of the assets/properties; order of restraint from selling, transferring, alienating, relinquishing or creating any third party interest in respect of the assets/properties etc.

5. Briefly stated, the facts as disclosed in the petition leading to the filing of the present petition are as follows:

5.1. The Petitioner sanctioned term loan of Rs.65 Crores to Satra Property Developers Private Limited [hereinafter referred to as `SPDPL'] under a Loan-cum-Mortgage Agreement dated 4th February, 2016 [hereinafter referred to as the `Loan Agreement'] read with a sanctioned letter dated 24th December, 2015 [hereinafter referred to as the `Sanction Letter'];

5.2. Respondent No. 1-Mr. Praful Satra and Respondent No. 2-Mrs. Minaxi Satra executed deeds of Personal Guarantees dated 30th December, 2015 irrevocably and unconditionally, jointly and severally, securing the obligations of SPDPL under the Loan Agreement dated 4th February, 2016 [hereinafter referred to as `the Deed']. The Deed contains the Arbitration Agreement in Clause 24 that is reproduced as under:

"In the event of any dispute or difference arising under this Deed or relating hereto, such dispute or difference shall be referred to arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996 or any statutory reenactment or modification thereof for the time being in force. All arbitration proceedings shall take place at Delhi. The language used in the arbitral proceedings shall be in English. The Arbitral Tribunal shall be comprised of sole arbitrator appointed by the Lender. The award of such sole arbitrator shall be final and binding. Any dispute remaining unresolved relating to this Agreement shall be subject to jurisdiction of Courts at Delhi."

5.3. SPDPL failed to perform its obligations under the Loan Agreement and the Petitioner was compelled to issue a letter dated 21st October, 2020 to Respondent Nos. 1 and 2 invoking Personal Guarantee [hereinafter referred to as the `PG Invocation Notice'], to forthwith, jointly and/or severally, pay the entire outstanding amounts due under the Loan Agreement and the amendment agreement dated 9th September, 2019.

5.4. By virtue of the order dated 10th August, 2020, SPDPL is presently under corporate insolvency resolution process before the National Company Law Tribunal at Mumbai.

6. The Petitioner has approached this Court apprehending that in order to defeat their claim, Respondent Nos. 1 and 2 through their family members, associates, affiliates and/or other entities of `Satra Group', are likely to clandestinely and/or in collusion with each other take steps to dispo