Court affirmed the lender's right to interim relief under Section 9 of the Arbitration and Conciliation Act, despite objections regarding stamping, emphasizing the borrower's obligation to repay regardless of disputes.

1. These are four petitions filed under section 9 of the Arbitration and Conciliation Act, 1996 (for short “the Act”) whereby the petitioner, which is a non-banking financial company and which has granted loans to respondent no. 1 for the purpose of acquiring different construction equipments/vehicles, is before the Court praying for interim measures pending the arbitral proceedings.

2. The facts in relation to these petitions are similar. For convenience and as agreed between the parties, the facts in Arbitration Petition no. 6 of 2022 being the lead matter can be referred. The petitioner is involved in the business of providing financial facilities, such as Auto loan, personal loan, business loan, home loan, Asset loan etc. Respondent no. 1-company is incorporated under the Companies Act, 1956 and having its place of business at Ahmedabad, as set out in the cause title. Respondent no. 1 as a borrower approached the petitioner for availing a loan facility. The financial requirement as applied by respondent no. 1 was for an amount of Rs.49,00,990/- for acquiring construction equipments/vehicles (for short “the equpments) namely, HAMM GRW-15 WH ROLLER make WRITGEN INDIA PRIVATE LIMITED bearing Engine No. 12240694 and Chassis No. WGH0H190KHAA03128. The petitioner agreed to finance such requirement of respondent no. 1. Accordingly, a Loan cum Hypothecation Agreement dated 31 May, 2019 (for short “the LHA”) came to be entered between the parties. The loan amount was disbursed. As a consequence of the LHA the said asset stands hypothecated in favour of the petitioner. The agreed rate of interest for such loan was 9.50% p.a. and the repayment schedule was of 48 monthly instalments of Rs.1,25,345/-.

3. The case of the petitioner was that there was default by respondent no. 1 in repayment of the loan installments. This is a common factor in all these petitions. The total amount disbursed and subject matter of all these four petitions is about 21 crores. The petitioner has contended that an amount of about 11 crores is now required to be recovered from respondent no. 1 as also from the guarantors.

4. The petitioner by its letter dated 9 September, 2021 addressed its advocate to respondent no. 1 informed respondent no. 1 of the defaults in repayment of loan. Respondent no. 1 was also put to a notice that in the event the amounts in default are not being not paid, the loan would stand recalled. As respondent no. 1 failed to regularize the loan amounts and the amounts being substantial, the petitioner has approached the Court in the present proceedings praying for interim measures pending the arbitral proceedings. The petitioner has pressed for a relief that the Court Receiver, High Court be appointed as receiver to take possession of the equipment in question, which is also a relief in terms of what has been agreed between the parties under the LHA The petitioner has prayed for the following relief:

“a. The Court Receiver High Court Bombay be appointed as Receiver and take peaceful physical possession under Order XL, Rule 1 of CPC 1908 in respect of the hypothecated asset being HAMM GRW-15 WH ROLLER make WRITGEN INDIA PRIVATE LIMITED Engine No: 12240694 and Chassis No: WGH0H190KHAA0318 whether in the possession of the Respondents and/or any 3rd party and this Hon’ble Court be pleased to direct the Respondents and/or any 3rd Party (who may be in possession of the hypothecated Asset) to hand over the physical, peaceful and vacant possession of the HAMM GRW-15 WH ROLLER make WRITGEN INDIA PRIVATE LIMITED Engine No; 12240694 and Chassis No: WGH0H190KHAA03128 forthwith accordingly to