The main legal point established is that pursuing both court and arbitration proceedings for the same claim can be regarded as vexatious and an abuse of the court's process, and the plaintiff's failure to elect one forum rendered the proceedings vexatious.

1. It is pleaded, that the plaintiff/applicant has file a suit for issuance of direction to the defendants/respondents to deliver Schedule I & II mentioned machineries to the plaintiff at their office at Chennai on their own risks and costs and in default by the defendants, order repossession of the Schedule I & II mentioned property through Court process. The prayer is also for issuance of permanent injunction, restraining defendants, their men, agents, staff, subordinates or any person claiming through or holding on behalf of them from in any way dealing with the schedule I & II mentioned assets / machineries installed at schedule premises by way of alienation / parting with possession or dealing with the same.

2. The plaintiff/applicant is a Non-Banking Financial Company regulated and registered with the Reserve Bank of India and is a company registered under the Companies Act. It is submitted, that it entered into a loan agreement dated 15.06.2010 at Chennai. The defendant no.1 availed a loan of Rs.10,00,00,000/- (Rupees Ten Crores only), which was agreed to be repaid with interest @ 12% p.a. and in the event of default, @ 33% p.a. The loan was advanced for purchase of plant and machinery, furniture and fit outs as detailed in the Schedule I.

3. The amount was to be repaid in equated monthly installments of Rs.60,98,000/-(Rupees Sixty Lakhs and Ninety Eight Thousand only). The 2nd defendant had executed a Deed of Personal Guarantee on 22.06.2010, guaranteeing the due payment of the amount. The loan was also secured by a Deed of Hypothecation dated 15.06.2010, hypothecating the schedule-I mentioned machineries for the amount due under the agreement, which was held by Supplement Deed of Hypothecation dated 28.02.2011.

4. Thereafter, the 1st defendant availed additional loan of Rs.3,58,95,050/- (Rupees Three Crores Fifty Eight Lakhs Ninety Five Thousand and Fifty only) out of sanctioned loan of Rs.15 Crores, which was also to be repaid in 18 equated monthly installments @ 14.50% p.m. and in default 33% p.a. This was also guaranteed by way of personal guarantee.

5. The 1st defendant is said to have committed default in repayment of loan amount and also violated the terms of hypothecation agreement. It is submitted, that defendant no.2 is jointly and severally liable for all the dues agreed under the said deeds.

6. It is the case of the plaintiff/applicant, that under the loan agreement, right is given to the company or its bankers to inspect the premises to verify the offered security. That it is open to the plaintiff/applicant in the event of default to recall all the principal and accrued interest thereon and enforce the securities for recovery of the amount.

7. It is further case of the plaintiff/applicant, that though it is an agreement for loan, but in fact it is a hire purchase agreement, as the ownership right vests with the plaintiff/applicant. According to a newspaper Report, the plaintiff/applicant gathered that the defendant company is financially unsound and had committed default in repayment of monthly installments. These averments cannot be accepted, as it is not understood how hire purchase goods could be hypothecated.

8. It is submitted, that 1st defendant is not doing good business and the foreign investors have withdrawn their investment in the company. That the defendant no.2 did not properly utilize the loan amount, which resulted in issuance of notice dated 18.10.2011, calling upon the Directors to repay jointly and severally a sum of Rs.7,51,27,177.26 (Rupees Seven Crores Fifty One Lakhs Twenty Seven Thousand One Hundred and Seventy Seven and Paise Twenty Six only), being the loan amount due on 18.10.2011.

9. It is further case of the plaintiff/applicant, that on receipt of notice, defendant no.2 requested the plaintiff/applicant to drop action, as he will regularize the amount and also furnish security for the amount. The plaintiff/applicant accordingly withdrew the notice, but inspite of this, t