The court's decision was based on the petitioner's prima facie case and the balance of convenience, leading to the grant of an ad interim injunction and freezing of the respondent's bank accounts to secure the petitioner's interest.

Headnote:
Arbitration and Conciliation Act, 1996 - Settlement Agreement - Breach of Payment - Interim Injunction - Bank Account Freeze
Fact of the Case:

The dispute arose from Facility Agreements and other loan related documents. A settlement agreement was reached between the parties, but the respondent failed to make the required payments, leading to the petitioner seeking an interim injunction and freezing of the respondent's bank accounts.
Finding of the Court:

The court found that the petitioner had made out a good prima facie case and that the balance of convenience favored the petitioner. An ad interim injunction was granted in favor of the petitioner, and the respondent's bank accounts were frozen. The court also directed the respondent to file an affidavit of assets and undertook to consider the appointment of an arbitrator on a later date.
Issues: Breach of settlement agreement, interim injunction, freezing of bank accounts, appointment of arbitrator
Ratio Decidendi: The court's decision was influenced by the petitioner's prima facie case and the balance of convenience, leading to the grant of an ad interim injunction and freezing of the respondent's bank accounts to secure the petitioner's interest.
Final Decision: The court granted an ad interim injunction in favor of the petitioner, froze the respondent's bank accounts, and directed the respondent to file an affidavit of assets. The appointment of an arbitrator was to be considered on a later date.

ORDER

% 27.03.2024

1. This hearing has been done through hybrid mode.

O.M.P.(I) (COMM.) 26/2023

2. These are two connected petitions filed seeking relief under Arbitration and Conciliation Act, 1996. The dispute in these petitions arise out of Facility Agreements, Sanction Letter-4 and other loan related documents. On 14th March, 2024, ld. Counsel for the Respondent submitted that the parties are trying to amicably resolve the matter.

3. Today, the Court has heard ld. Counsel for the parties for some time. It becomes clear from the record that a settlement agreement dated 26th July, 2023 was entered into between the parties wherein a one-time settlement (OTS) amount of Rs. 18 crores was agreed to be paid between the parties for payment. Out of the said amount, Rs.12.75/- crores have been cleared and repeated extensions were granted for remaining payments. The last extension granted was till 14th March, 2024. By this date, a sum of Rs.1.5 crores was also to be paid. Out of the said Rs. 1.5 crores only Rs.25,00,000/- has been paid. The entire due of Rs.5.75 crore is to be cleared by 30th April, 2024.

4. There was an interim order which was passed in this matter on 2nd February, 2023 by which the bank accounts of the Respondent were frozen.

The operative portion of the said order reads as under:-

6. Having perused the contents of the petition, the documents filed therewith, and having heard the learned senior counsel for the petitioner, I am of the opinion that the petitioner has been able to make out a good prima facie case in its favour. The balance of convenience is also in favour of the petitioner and against the respondents. The petitioner is likely to suffer grave irreparable injury in case an ad interim injunction is not granted in favour of the petitioner.

7. Accordingly, there shall be an ad interim injunction in favour of the petitioner and against the respondents in terms of prayers 'b' &'d' of the petition. The respondents shall also file a list of their assets on affidavit within a period of three weeks of receipt of the notice.

The ad-interim injunction prayers (b) and (d) read as under:-

Pass an order restraining/ prohibiting the Respondents from selling, disposing, alienating, or creating any third-party interest in any of their movable and immovable assets including the assets mentioned herein below, pending the furnishing of security in terms of prayer (a) above.

1. 5 A, Palm Avenue within Municipal Ward no. 85, Police Station Karaya, Kolkata- 700019 2. Premises no.6 E, Keyatala Road, P.S. Lake, Ward no. 86, Kolkata- 700029 3. Premises No. 112 B, Dr. Meghnad Saha Sarani, P.S. Lake, Kolkata- 700029 4. Mouza - Dhapa, J.L. No. 2, R.S. 236, Pargana - Magura, Touzi no. 46B 2, under Police Station- Pragati Maidan And other assets of Respondent Nos. 1 to 4 to secure the interest of the Petitioner for the entire due and outstanding of INR 25,93,23,826.67 (Rupees Twenty- Five Crores Ninety Three Lakhs Twenty-Three Thousand Eight Hundred Twenty Six and Paisa Sixty- Seven Only) as due on 18.01.2023. d.

Direct Freezing of Bank Account(s) of the Borrowers including (i) Bank Account No.05932320000545 of HDFC Bank; (ii) Bank Account No.01 052000006743 of HDFC Bank creating Charge of the Outstanding amount mentioned above;

5. Thereafter, on 22nd December, 2023, another opportunity was given to the Respondent and some interim protection has been granted against coercive steps:-

“2. Learned senior counsel for the respondents on instructions from Mr. Anirudh Banerjee, the sole proprietor of the respondent no.l concern who is present in Court, submits that the respondents are conscious of their liability to pay the remaining outstanding dues of Rs.6 crores to the petitioner and undertake to pay the same on or before 01.02.2024. He further submits that in order to show their bona fide, the respondents will pay a sum of Rs.50 lakhs to the petitioner on or before 29.12.2023.

3. In the light of this stand taken by the resp

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