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2024 Supreme(MP) 673

IN THE HIGH COURT OF MADHYA PRADESH
Anand Pathak, J.
Shameem Khan v. Tata Motors Finance Limited
Arbitration Appeals No. 39 to 44 of 2024 (G); Decided on 24.9.2025*

Advocates appeared:
Purushottam Rai for appellant; Rahul Yadav for respondent No. 1; Neelesh Singh Tomar, Government Advocate for respondent No. 2.

Headnote:

Arbitration and Conciliation Act, 1996 -- S. 9 -- maintainability of application -- loan taken for purchasing truck -- default in payment of installments -- truck forcefully seized -- application for interim protection of vehicle not maintainable in view of final award already passed -- appellant at liberty to pursue other remedy available in accordance with law. (2022) 1 SCC 712 followed. [Paras 13 to 19]

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JUDGMENT

1. Regard being had to the similitude of the controversy as all cases originate from the same cause of action, all these cases are taken together and heard analogously and decided by this common order. For convenience's sake, facts as narrated in A.A.No.39/2024 are taken into consideration.

2. Present appeal is under section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”) against order dated 18.3.2024 passed by Commercial Court Gwalior whereby application preferred by appellant under section 9 of the Act of 1996 is being dismissed.

3. Precisely stated facts of the case are that appellant runs transport business, for which he purchased the truck TATA 5530 SIGNA for which he received financial assistance of Rs.43,40,000/- from Tata Motors Finance Limited (respondent No.1 herein). As per the terms of the loan agreement, he was required to pay total Rs.54,16,315/- along with interest of Rs.10,76,315/- in 60 regular monthly installments within the period from 17.2.2021 to 28.2.2026. It appears that regular monthly installments were paid by appellant for some time, According to appellant, he paid amount till July, 2023 and became defaulter in August, 2023 when he did not deposit the installment.

4. Respondent No.1 caused the truck to be seized forcefully on 25.08.2023. Thereafter, appellant contacted respondent No.1 for deposit of due installments and demanded the questioned vehicle to be released after depositing two months due installments. However, respondent No.1 did not release the vehicle and went into arbitration proceedings. It appears that Arbitrator passed interim order on 10.11.2022 for seizure of vehicle. Meanwhile, proceedings continued and on 8.2.2023 final award has been passed by the Arbitrator. Thereafter, appellant preferred an application under section 9 of the Act of 1996 before Commercial Court for protection of his vehicle because respondent No.1 in pursuance to arbitration award wanted to dispose of the truck through sale in auction.

5. Said application under section 9 of the Act of 1996 is being dismissed by Commercial Court on the ground that appellant has remedy to approach the Arbitrator and/or to prefer appeal and on the point of jurisdiction. Therefore, appellant is before this Court.

6. It is the submission of learned counsel for appellant that he paid amount till July, 2023 regularly. Still vehicle has been seized on 25.8.2023. When he was regularly paying the installments then respondent No.1 had no occasion to seize the vehicle.

7. It is the submission of learned counsel for appellant that once interim order was passed on 10.11.2022 by Arbitrator and thereafter final award was passed on 8.2.2023, then interim order directing the seizure of truck merges with the final order. Therefore, seizure of truck on 25.8.2023 is an arbitrary exercise having trappings of colourable exercise of powers.

8. Learned counsel for the appellant also raised the point of non-affording of opportunity of hearing. According to appellant, no notice ever received by appellant at the instance of Arbitrator so as to participate in the proceedings. In absence of any notice being received proceedings are sham proceedings and deserves to be set aside.

9. Learned counsel for respondent No.1 refers an application vide I.A. No.3878/2024 for dismissal of appeal and submits that appellant became defaulter much prior to initiation of arbitration proceedings. On becoming being defaulter intimation was given to the appellant about his conduct and thereafter arbitration proceedings were invoked following due process. Therefore, it is not the case where arbitration proceedings initiated much prior to appellant becoming defaulter. So far as opportunity of hearing is concerned, he refers the fact that thrice registered AD notice was issued by Arbitrator and when appellant did not turn up then because of the deeming fiction under section 27 of General Clauses Act, 1897 it is presumed that appellant re

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