C.M.A(MD)No.1141 of 2022

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Dated : 20.02.2023

CORAM

THE HONOURABLE MRS.JUSTICE N.MALA

C.M.A(MD)No.1141 of 2022

and

C.M.P(MD)No.11674 of 2022

The Principal,

St.Mary's Nursery and Primary School,

Vembar, Vilathikulam (KOL),

Tuticorin District- 628 906.

... Appellant/ Respondent

Vs

M/s.Shriram Transport Finance Company Limited,

Represented by its Power of Attorney,

Mr.S.Surendran, Branch Office,

1^st Floor, Pandian Complex,

Alangulam,

Tirunelveli District.

...Respondent/Petitioner

PRAYER :-

This Civil Miscellaneous Appeal is filed under Section 37 (1) of the

Arbitration and Conciliation Act to set aside the impugned ex parte interim

attachment order dated 15.10.2022 (received on 27.10.2022) passed by the

sole Arbitrator, Tirunelveli in I.A.No.1 of 2022 in Arbitration Case No.489 of

2022.

For Appellant

: Mr.Issac Mohanlal

Senior Advocate

For M/s.Issac Chambers

For Respondent

: Mr.Anand C.Rajesh

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C.M.A(MD)No.1141 of 2022

JUDGMENT

The civil miscellaneous appeal is filed against the order of the sole

arbitrator in I.A.No.1 of 2022 in Arbitration case No.489 of 2022, dated

15.10.2022 under Section 37(1) of the Arbitration and Conciliation Act,

wherein, the order of interim attachment of property was made with further

direction to the Sub Registrar, Vilathikulam, Tirunelveli Registration District,

Tuticorin District to make necessary endorsement in the encumbrance register

in respect of the scheduled mentioned properties.

2. The brief facts are that the appellant is the Principal of St.Mary's

Primary and Nursery School, Tuticorin District. The said school is run by

St.Mary's Educational Trust which is a registered Trust. It is stated that the

appellant school entered into 7 loan cum hypothecation agreements with the

respondent company for purchase of school buses. One of the loan

agreements dated 21.08.2017 related to purchase of Swaraj Mazda Supreme

FBV-P-2009 model, wherein, loan of Rs.5,00,000/- was sanctioned and the

period of four years was given for repayment of total amount of

Rs.7,95,374/- in 51 monthly instalments. Due to lockdown declared by the

Government in pursuance of Covid-19 situation, the school was not in a

position to keep up its promise and defaulted in payment of EMI. The

respondent company therefore issued a legal notice on 11.08.2022 directing

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C.M.A(MD)No.1141 of 2022

the appellant school to pay a sum of Rs.7,68,902/-. When the appellant school

enquired about the notice, the respondent assured that the same was routine

procedure and the payment could be made by the school as soon as the

finances improved.

3. While so, on 15.10.2022, the appellant school received the said

notice wherein, it was informed that Surendran was appointed as sole

arbitrator for the respondent's company and the date of hearing was fixed on

19.11.2022 at 11.00 a.m. The appellant also received an order passed in

I.A.No.1 of 2022 in arbitration case Nos.489 of 2022 by the sole arbitrator

dated 15.10.2022 intimating the attachment of the appellant school's

properties and also the direction issued to the Sub Registrar's Office

Vilathikulam, Tirunelveli Registration District, Tuticorin District for making

endorsement in the encumbrance registrar in respect of the schedule

mentioned properties.

4. Aggrieved by the said order, the appellant school has filed the appeal.

5. The learned counsel appearing for the appellant raised three issues in

the appeal. According to the learned counsel, there was a total violation of

principles of natural justice in as much as the impugned order dated

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C.M.A(MD)No.1141 of 2022

15.10.2022 was passed on the same day as the appointment of sole arbitrator.

The learned counsel therefore submitted that the appellant wa