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TMI Blog2015 (9) TMI 1765X X X X Extracts X X X X X X X X Extracts X X X X ..... ready taken a view in case of Tata Capital Financial Services Limited vs. Deccan Chronicle Holdings Limited and Anr. [ 2013 (2) TMI 839 - BOMBAY HIGH COURT ] that the proceedings under section 9 for interim measures cannot be equated with the proceedings filed in a pending suit for referring the parties for arbitration under section 8 of the Arbitration Act. The principles laid down by this court in the said judgment can be extended in the present proceedings under section 9. The reliefs under section 9 for appointment of the Court Receiver in respect of the mortgage property through in respect of which no reliefs are claimed by the petitioner in the statement of claim, can still be granted in respect of the said properties to secure the claims of the petitioner under section 9(ii)(d) of the Arbitration Act. This court has held in the said judgment that the court can grant interim measures under section 9(ii)(b), (d) and (e) even if the property or things are not subject matter of the dispute in arbitration. The respondents have committed default in making repayment of the loan under the facility agreement. The petitioner has good chances of succeeding in the arbitral proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h September, 2012 confirming that the said promissory note shall be continuing security for any borrower by respondents at any time to the petitioner, executed a declaration cum confirmation deed thereby declaring and confirming the mortgage by deposit of title deeds in respect of immoveable properties dated 24th September, 2012 described in Ex.'U' and Net Worth Certificate dated 1st December, 2011 issued by the chartered accountants of respondent no. 1. 5. It is the case of the petitioner that pursuant to the said agreement, the petitioner had disbursed the loan to the respondents in two parts i.e. (1) on 9th October, 2012 a sum of Rs. 5,49,84,932/- and (2) on 23rd November, 2012 a sum of Rs. 12,46,00,000/-. 6. The respondents availed of three more facilities from the petitioner wherein there are certain defaults according to the petitioner. The facilities, amount stood changed from Rs. 18 crores to Rs. 21,06,87,404/-. 7. By their letter dated 31st October, 2014, the petitioner requested the respondents to clear the overdue sum of Rs. 3,03,43,841/- without prejudice to their rights which the respondents failed and neglected to pay as on 31st October, 2014. It is the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the respondents of bias against him. The learned arbitrator also rejected the contention raised by the respondents that the learned arbitrator could not have been appointed by the learned advocate representing the petitioner. 13. According to the petitioner, as on 31st March, 2015 the respondents are liable to pay amount of Rs. 23,65,07,643/- with further interest thereon at the rate of 12.5% per annum from 1st April, 2015 upto payment and/or realization thereof. 14. It is the case of the petitioner that the respondents were habitual defaulters and have not paid the legitimate dues of the petitioner despite requests, reminders and personal follow up. It is pleaded by the petitioner that whenever the petitioner insisted upon the respondents to make due repayment of the said outstanding loan, the respondents had fraudulently evaded to make the due repayment of the said loan. It is averred by the petitioner that the petitioner apprehends that in order to defeat the claim of the petitioner, the respondents are most likely to transfer, sell and/or alienate and/or dispose off their assets/properties both moveable and immovables and create third party rights in respect of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of clause 15.1, the petitioner can seek recovery of the mortgaged property. He submits that in the statement of claim filed before the learned arbitrator, the petitioner has simplicitor applied for recovery of the money lent and advanced. No reliefs for enforcement of the mortgage are claimed by the petitioner before the learned arbitrator in the statement of claim. He submits that the financial condition of the respondents being very critical, claims of the petitioner is required to be protected by appointment of the receiver of the mortgaged property and by granting various interim reliefs as prayed in the present petition. He submits that under section 9(ii)(d), this court has power to appoint a receiver in respect of the mortgaged property to secure the amount in dispute in the arbitration though there is no dispute for enforcement of the mortgage in the arbitral proceedings. 19. Mrs. Shobha Menon, learned senior counsel for the respondents on the other hand submits that since the petitioner has prayed for physical possession of the immoveable properties situated at Bhopal in the State of Madhya Pradesh, the present proceedings filed by the petitioner would be a suit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed reliance on the judgment of Supreme Court in case of Excel Dealcomm Private Limited vs. Asset Reconstruction Company (India) Limited Ors. 2015 SCC Online SC 295 in Civil Appeal No. 3272 of 2015 in support of the submission that in case of suit for land when the property is situated outside the territorial jurisdiction of this court, leave under clause 12 was mandatory. 23. Learned senior counsel placed reliance on the judgment of Calcutta High Court in case of Cityscape Developers (Pvt.) Ltd. vs. Alka Builders (Pvt.) Ltd. 199 SCC Online Cal 500 and in particular paragraphs 5 and 26 in support of the submission that the suit was for land and without leave under clause 12 of the Letters Patent, present proceedings could not have been filed by the petitioner. 24. Learned senior counsel placed reliance on the judgment of Calcutta High Court in case of Zoom Developers Pvt. Ltd. vs. The Small Tools Manufacturing Co. of India Ltd. Ors. 2006 SCC OnLine Cal 629 and in particular paragraphs 23, 26, 34, 37, 44 and 48 and would submit that since the petitioner has prayed for possession of the immoveable property which is situated outside Greater Mumbai, the present petition is not maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1996 are maintainable in this court even on that ground. 29. Learned counsel for the petitioner distinguished the judgment relied upon by the learned senior counsel for the respondents on the ground that the present proceedings are not suit proceedings but is a petition filed under section 9 for interim measures. He submits that in any event, the petitioner has applied for interim measures under section 9 of the Arbitration Act so as to secure the claims made by the petitioner. Learned counsel invited my attention to the prayers in the statement of claim filed before the learned arbitrator and would submit that the petitioner in the statement of claim has not applied for enforcement of the mortgage or for recovery of possession. 30. Learned counsel for the petitioner placed reliance on the judgment of this court in case of L T Finance Limited vs. Saumya Mining Ltd. 2014(5) Bom.C.R.448 and in particular paragraph 23 and would submit that since the proceeding filed under section 9 of the Arbitration Act is not a suit and in view of the fact that the material part of the cause of action has arisen at Mumbai, no leave under clause 12 of the Letters Patent was required. 31. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner also invited my attention to the other two loan agreements entered into between the parties which were between the sister companies of the respondents and the petitioner which were also signed by the same signatory on behalf of the respondents thereby conferring jurisdiction of the court at Mumbai in case of any dispute between the parties. REASONS AND CONCLUSIONS 35. I shall first decide the issue raised by the respondents whether this court has jurisdiction to entertain, try and dispose off the present petition or not. A perusal of the agreement entered into between the parties and more particularly clauses 22.1 to 22.6 clearly indicates that the parties have agreed that the dispute between the parties shall be referred to the arbitration. The venue for conducting the arbitration proceedings shall be at Mumbai. The dispute shall be subject to exclusive jurisdiction of the courts in the city of Mumbai. A perusal of the record indicates that the respondents had raised the issue of jurisdiction before the learned arbitrator which has been already negatived by the learned arbitrator. The said arbitration proceedings are still pending before the learned arbitrator. 36. Be that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Arbitration Act. I am respectfully bound by the said judgment. 39. Division Bench of this court in case of Konkola Copper Mines (PLC) (supra) has held that since the place of the arbitration is at Mumbai, court at Mumbai will have jurisdiction to entertain the proceedings arising out of such dispute. In the loan agreement also the place of arbitration agreed is at Mumbai. I am respectfully bound by the said judgment. 40. A perusal of the ruling given by the learned arbitrator on the issue of jurisdiction clearly indicates that the learned arbitrator has rejected the plea of the respondents that the agreement is alleged to be fabricated by the petitioner or that the proceedings cannot be held at Mumbai. This court at this stage cannot even otherwise go into the validity of the said ruling rendered by the learned arbitrator in the present proceedings. 41. Insofar as submission of the learned senior counsel for the respondents that considering the prayers in the present petition for recovery of the possession of the immoveable property situated outside Mumbai which was mortgaged in favour of the petitioner and thus no such relief for recovery of the possession even otherwise c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim simplicitor in the statement of claim. I am respectfully bound by the said judgment. 44. Insofar as submission of the learned senior counsel that the criminal complaint as well as writ petition filed by the respondents against the petitioner are pending in the High Court of Madhya Pradesh in respect of the alleged fabrication of the facility agreement is concerned, this proceedings are not stayed or this court cannot refuse to grant interim measures in the present proceedings merely on the basis of the pendency of the said writ petition or complaint filed by the respondents against the petitioner. 45. Insofar as submission of the learned senior counsel that the petitioner has efficacious alternate remedy of filing an application under section 17 of the Arbitration and Conciliation Act before the learned arbitrator and thus this court shall not grant any interim measures in this proceedings filed under section 9 of the Arbitration Act is concerned, in my view there is no merit in this submission of the learned senior counsel for the respondents. Under the provisions of Arbitration and Conciliation Act, 1996, the court as well as the arbitral tribunal has power to grant various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceiver can be granted by this court under section 9(ii)(d) and (e). I, therefore, pass the following order :- (a) Court Receiver, High Court, Bombay is appointed as a Receiver in respect of the property of the respondents described in Ex.'U' to the petition with a direction to appoint the respondents or any person found in possession of the said properties as an agent of the Court Receiver on usual terms and conditions including payment of royalty and on furnishing security. It is made clear that if the respondents or such third party do not accept the agency of the Court Receiver on the usual terms and conditions within two weeks from the date of such offer, the Court Receiver shall have power to take physical possession of the said property and if necessary, with assistance of police. The petitioner would be in that event at liberty to apply for further interim measures under section 9 of the Arbitration and Conciliation Act. (b) Till the Court Receiver takes possession of the property described at Ex.'U', there shall be an injunction in respect of such properties in terms of prayer clause (g) excluding the word 'dealing'. (c) The respondents are also dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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