Point of Law: There is no mandate that notice shall be issued before ordering taking possession of the vehicle since issuance of notice prior to taking possession of the vehicle would facilitate hiding and transporting the vehicle outside the jurisdiction of the execution court with intention to defeat the execution of the interim order.

JUDGMENT :

A. BADHARUDEEN, J.

1. HDFC Bank Limited, the petitioner herein is aggrieved in the matter of issuance of notice to the other side while proceeding with the execution of an interim award passed under Section 17 of the Arbitration and Conciliation Act, 1996 by the Arbitrator to take possession of the vehicle offered as security to the Bank while availing loan.

2. It is argued by the learned counsel for the petitioner that issuance of notice before ordering possession of the vehicle in obedience to the interim award of the Arbitrator would facilitate hiding of the vehicle by the respondent so as to defeat execution of the interim award. Though the learned counsel was asked to justify the said argument based on binding precedent, the learned counsel failed in this endevour.

3. In view of this argument, a pertinent question crops up consideration is; whether issuance of notice is mandatory prior to taking possession of a vehicle in execution of an interim award passed by the Arbitrator.

4. In the decision reported in HDFC Bank Limited vs. Manaf Arakkaveettil, 2018 (4) KHC 84, this Court held that issuance of notice prior to taking possession of vehicle could often entail vanishing of the only security available. It was held further that if the vehicle in question is removed, very often the creditor would be left without any asset of the debtor to proceed against for recovery of the debt.

5. Though the normal rule is that before passing any coercive orders, notice to the other side is necessary, otherwise, the same is violation of the principles of nature justice. The fundamental principle of natural justice viz. Audi alteram partem, otherwise termed as Audiatur et altera pars means listen to the other side or hear the other side. Thus no person should be judged without a fair hearing in which each party is given the opportunity to respond the allegation against him. However, while issuing ex-parte order of injunction and other orders of interim nature where issuance of notice and the waiting period for getting the notice served, would defeat the purpose of the order or destruction of the subject matter ex-parte order without notice is often practiced as permitted by law. The rational is that the other party would get opportunity to submit his version even after passing of the interim order without notice, to address his grievance thereafter. By applying the same principle, if vehicle is ordered to be possessed without notice then also the aggrieved person could very well appear before the court or the Arbitrator, as the case may be, and get back the vehicle on paying the due amount as per the interim order. If the aggrieved person fails to pay the amount due, the vehicle is liable to be auctioned if the arbitration agreement provides so. Therefore, there is no mandate that notice shall be issued before ordering taking possession of the vehicle since issuance of notice prior to taking possession of the vehicle would facilitate hiding and transporting the vehicle outside the jurisdiction of the execution court with intention to defeat the execution of the interim order.

6. In view of the matter, the learned Sub-Judge went wrong in issuing notice before taking possession of the vehicle by appointing a Commission. Therefore, the said order is set aside. The learned Sub-Judge is directed to issue an order to take possession of the vehicle after dispensing notice to the other side and execute the interim order passed by the Arbitrator as per law.

7. This Original Petition (Civil) stands disposed of as above.

8. Registry is directed to forward a copy of this order to the Court below concerned, within seven days, for compliance and information.