M/s.Shriram City Union vs M/s.Sambhav Infrastructure

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Online)(MAD) 23278

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 24.06.2021 CORAM THE HON'BLE MRS.JUSTICE PUSHPA SATHYANARAYANA A.Nos.1390 and 1440 of 2017, 4186, 6327, 7745, 8880 of 2018, 2474, 2475, 2762, 2765 to 2767, 3063, 3242, 3244, 3246, 3268, 3325, 4207 and 5190 of 2019 A.No.1390 of 2017 :
M/s.Shriram City Union Finance Limited No.123, Angappa Naicken Street, Chennai, rep. by its Authorized Signatory, Ms.C.Subha .. Applicant Vs.
1. M/s.Sambhav Infrastructure Private Limited, No.601, Pinnacle, Opp. To Royal Orchid, AUDA Garden, Prahlad Nagar, Ahmedabad, Gujarat-380 015.
2. Mr.Mihir Pravinchandra Desai, A-5, Uplav Cooperative Housing Society Ltd., B/H Jawahar Nagar, Sarkhej Road, Ahmedabad, Gujarat-380 007.
3. Mr.Mohanbhai Ranchhodbhai Makwana, Flat No.C-1002, 10th Floor, Block-C, Stavan Avisha, Near Seema Hall, Satelite, Ahmedabad, Gujarat-380 015. .. Respondents * * *
Prayer : Application under Order XIV Rule 8 of O.S. Rules read with Section 9(ii)(a)(b) and (e) and (d) of the Arbitration and Conciliation Act, 1996, praying to pass an order directing the first and second respondents to furnish security to the tune of Rs.71,73,884/- or such sum as this Hon'ble Court may direct ; within such time that this Court may stipulate and in case of default to do so, order sale of the property of the respondents morefully described in the schedule to the Judge's summons pending enforcement of the award.
* * *
For Applicant : Mr.R.Umashankar in all Applications for M/s.Sri & Shankar Associates For Respondents-1: Mr.Mothilal & 3 in A.No.1390/17 for M/s.Mothilal & Goda For Respondent in: Mr.Pugazh Gandhi A.No.1440/17 For Respondents 1: Mr.R.Ganeshkumar & 2 in A.No.2475/19 No appearance for the remaining respondents Mr.S.Ramesh, Amicus Curiae

C O M M O N O R D E R

Admittedly, all these are applications under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Arbitration Act") seeking an order of sale of the immovable properties for securing money claim of the applicant, either pending disposal of arbitration proceedings or after obtaining awards from the Arbitral Tribunals. Further, the claimant had registered mortgages in its favour and had proceeded for a simple money claim as an unsecured creditor before the Arbitral Tribunal apparently aware of the bar created by virtue of the decision of the Hon'ble Supreme Court in Booz Allen and Hamilton Inc. vs. SBI Home Finance Limited and others reported in 2011 (5) SCC 532.

2. The applicant - financial institution had lent money to mostly the first respondent under the respective loan agreement which contains a clause to resolve the disputes by way of arbitration. The loan agreements also have been executed along with registered mortgages of properties owned by the borrowers or guarantors, some of whom have been arrayed as the parties to these applications. As stated earlier, the Arbitral claims are only for simple money recovery without touching upon the registered mortgage deeds. Wherever the arbitral awards had quantified the money recoverable, the applicant had filed applications seeking a direction to the concerned respondents to furnish security to the award amount, failing which, to order sale of the secured assets.

2.1. It is to be stated that the applicant earlier filed A.No.5101 of 2017, which was ordered on 03.07.2018 based on the terms appended therein in the said application. The applicant now filed A.No.5190 of 2019 seeking permission to sell the property to the intending buyer, by accepting his offer, which was below the upset price stated in the original terms of sale.

3. Admittedly, the properties, which are sought to be sold by way of public auction, are mortgaged with the applicant-Company. In almost all the cases, the awards have been passed in the absence of the borrowers, the details of which are as follows:-

Sl. No.	Application No.	Respondents Name	Status of Arbitration	Petition to set aside the award
1	1390/2017	M/s.Sambhav Infrastructure	Award Passed on 05.03.2017	Not filed
2	1440/2017	M/s.Bhanu Cosmetics Packaging Pvt. Ltd.,	Award passed on 29.08.2017	Not filed
3	4186/2018	Mr.P.Sekar	Award Passed on 11.12.2018	Not filed
4	6327/2018	Mrs.S.Swathi	Award Passed on 28.08.2018	Not filed
5	7745/2018	M/s.Great Ventures	Award Passed on 13.08.2019	Not filed
6	8880/2018	Mr.Sundar G	Award Passed on 20.08.2019	Not filed
7	2474/2019	Mr.Selvam M	Award Passed on 19.10.2019	Not filed

Sl. No.	Application No.	Respondents Name	Status of Arbitration	Petition to set aside the award
8	2475/2019	Mr.R.Sakthivel	Arbitration Pending	Not applicable
9	2762/2019	Mr.R.Bharathidasan	Award Passed on 20.08.2019	Not filed
10	2765/2019	Mr.V.Satish	Award Passed on 19.10.2019	Not filed
11	2766/2019	Mr.A. Bala Subramanian	Award Passed on 19.10.2019	Not filed
12	2767/2019	M/s.Amman Traders	Arbitration pending	Not applicable
13	3063/2019	Mr.D.Vasanth	Arbitration pending	Not applicable
14	3242/2019	Mr.K.Baskar	Award Passed on 07.09.2019	Not filed
15	3244/2019	Mr.M.Arumugam	Award Passed on 19.10.2019	Not filed
16	3246/2019	Mr.P.K.Bharani	Award Passed on 01.10.2019	Not filed
17	3268/2019	Mr.Bala Murali	Award Passed on 19.10.2019	Not filed
18	3325/2019	Mr.A.R.Suresh	Award Passed on 01.10.2019	Not filed
19	4207/2019	Mr.R.Rekha	Award Passed on 16.10.2019	Not filed
20	5190/2019	M/s.Dani Aviation Service Private Limited	Award Passed on 14.09.2017	Not filed

4. In the above said backdrop of the facts, the scope and maintainability of the second limb of the prayer made in these applications arise for consideration.

5. Mr.R.Umashankar, the learned counsel for the applicant would contend that, (i) the applicant had filed its claim onl

Click Here to Read the rest of this document