Case Note & Summary
The petitioner, L & T Finance Limited, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking appointment of a Court Receiver in respect of properties described in Exhibit F to the petition and an order directing the respondents to deposit Rs.6,94,70,392.29 or furnish security of like amount. The dispute arose from a facility agreement dated 31.8.2011 whereby the petitioner sanctioned a short term financing facility of Rs.10 Crores to respondent no.1 (Duplex Industries Ltd.) for purchase of goods from Sterlite Industries (I) Limited. Respondent no.2 (Anand Vishnu Satpute) executed a deed of guarantee. The respondent no.1 made payment of three installments but committed default in respect of remaining installments. The petitioner issued a demand-cum-termination notice dated 13.7.2012 terminating the agreement and demanding payment. The respondents did not dispute the loan or the default. The court considered the submissions and held that since the respondents did not dispute the loan or the amount claimed, the petitioner had a strong prima facie case. The court appointed the Court Receiver, High Court, Bombay as Receiver of the properties described in Exhibit F with powers to take possession and manage the properties. The court also directed the respondents to deposit Rs.6,94,70,392.29 within four weeks or furnish security to the satisfaction of the Prothonotary and Senior Master. The petition was disposed of accordingly.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Appointment of Receiver - The petitioner sought appointment of Court Receiver and direction for deposit of Rs.6,94,70,392.29 or furnishing security due to default in loan repayment - Court held that since the respondents did not dispute the loan or default, and the petitioner had a strong prima facie case, appointment of Receiver was justified to protect the petitioner's interest pending arbitration (Paras 1-10).
Issue of Consideration
Whether the petitioner is entitled to appointment of Court Receiver and direction for deposit of amount or furnishing security under Section 9 of the Arbitration and Conciliation Act, 1996.
Final Decision
The Court appointed the Court Receiver, High Court, Bombay as Receiver of the properties described in Exhibit F with powers to take possession and manage the properties. The respondents were directed to deposit Rs.6,94,70,392.29 within four weeks or furnish security to the satisfaction of the Prothonotary and Senior Master. The petition was disposed of.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Appointment of Receiver
- Interim Measures
- Security for Claim
