Case Note & Summary
The High Court of Bombay heard two connected applications filed by Tata Capital Housing Finance Limited against Inderjeet Sahni and others. The first application under Section 11 of the Arbitration and Conciliation Act, 1996 sought appointment of an arbitrator based on a clause in the loan agreement. The second petition under Section 9 sought interim measures to protect the mortgaged property during arbitration. The dispute involved a loan of Rs. 2,24,00,000 sanctioned in 2019, which was restructured in 2021. Respondents defaulted, leading to classification as NPA. Petitioner issued SARFAESI Act notices and obtained possession order. Respondents challenged this before DRT. The Court found the arbitration clause valid, appointed an arbitrator, and granted interim relief including injunction on property dealings, appointment of Court Receiver, and asset disclosure. The decision underscores the court's role in supporting arbitration processes and protecting creditor interests.
Headnote
The High Court of Judicature at Bombay -- Commercial Division -- heard Commercial Arbitration Application (L) No.35431 of 2025 and Commercial Arbitration Petition (L) No.35458 of 2025 -- filed by Tata Capital Housing Finance Limited against Inderjeet Sahni and others -- The Applicant/Petitioner sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) and interim measures under Section 9 of the Arbitration Act -- The dispute arose from a loan agreement dated 27 November 2019 -- where Respondents defaulted on repayment -- leading to classification as Non-Performing Asset (NPA) -- Petitioner issued demand notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) -- and obtained order for physical possession under Section 14 of the SARFAESI Act -- Respondents filed Securitization Application before Debts Recovery Tribunal (DRT) -- The Court held that the arbitration clause was valid -- appointed an arbitrator -- and granted interim measures to restrain Respondents from dealing with the mortgaged property -- appoint Court Receiver under Order XL Rule 1 of the Code of Civil Procedure, 1908 (CPC) -- and direct disclosure of assets -- The judgment emphasizes the enforceability of arbitration agreements in financial disputes -- and the court's power to grant interim relief to preserve assets during arbitration
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Issue of Consideration: The Issue of consideration was whether the arbitration clause in the loan agreement was valid and enforceable for appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, and whether interim measures under Section 9 should be granted to protect the mortgaged property during arbitral proceedings
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Final Decision
The Court appointed an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, and granted interim measures under Section 9, including injunction on property dealings, appointment of Court Receiver under Order XL Rule 1 of CPC, and direction for asset disclosure
