Bombay High Court
M/S.Tata Capital Financial ... vs M/S.Garuda Vahan Pvt. Ltd. on 18 December, 2013
Bench: R.D. Dhanuka
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 558 OF 2013
M/s.Tata Capital Financial Services Ltd. )
(formerly Tata Capital Ltd.) )
a Non Banking Financial Company duly )
registered with Reserve Bank of India and)
incorporated under the provisions of the )
Companies Act, 1956 having its registered)
office at One Forbes Dr.V.B.Gandhi Marg,)
Mumbai - 400 001 ) ..... Petitioner
VERSUS
1. M/s.Garuda Vahan Pvt. Ltd. )
a company incorporated under the )
provisions of the Companies Act, 1956 )
and having its office at Beldhi Baahmani )
Taranga, Rourkela, Orissa - 769 031 )
Also at :
Cantonment Road, Cuttack - 753 001 )
2. Mr.Akhil Kumar Poddar, Indian )
Inhabitant residing at 0-16, Civil Township)
Rourkela, Sundurgarh - Orissa )
3. Mr.Sheo Kumar Poddar, Indian Inhabitant)
residing at Hardutt Rai Lane, Upper Bazar)
Ranchi - 834 001, Jharkhand )
4. Mr.Aditya Prakash Jalan, Indian )
Inhabitant residing at 1, Ranglal Jalan )
Road, Upper Bazar, Ranchi, Jharkhand )
834 002 ) ..... Respondents
Mr.Chetan Kapadia, a/w. Mr.Rahul Totla, Mr.Sankalp Anantwar, i/b. India Law for
the Petitioner.
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Mr.H.S.Khokhawala, i/b. Nankani & Associates for Respondent No.3.
None for Respondent nos. 1 and 2.
CORAM : R.D. DHANUKA, J.
DATED : 18th DECEMBER, 2013
P.C.
By this petition filed under section 9 of the Arbitration and Conciliation Act,
1996 petitioner seeks interim measures by way of injunction in respect of the
property described at Ex.J to the petition.
2.
Some of the relevant facts for the purpose of deciding this petition are as
under :-
3. On 1st August, 2009, petitioner sanctioned channel finance facility for an
aggregate amount of Rs. 20 crores in favour of the 1 st respondent and entered into
an agreement on 2nd January, 2010, on the terms and conditions agreed upon by
and between the parties. On 2nd January, 2010 respondent nos. 2, 3 and 4 executed
personal guarantee agreeing themselves to be jointly and severally liable to repay
to the petitioner on demand the amounts due and payable by respondent no.1.
Respondent no.1 also executed demand promissory note on 2 nd January, 2010 and
letter for right of lien and set off on 9 th April, 2010. It is the case of the petitioner
that since respondent committed default in making repayment of the installments,
the petitioner issued notice on 27 th December, 2012 calling upon respondents to
pay Rs.89,35,829.52 with further interest thereof. There was neither any
repayment in response to the said notice nor any response. Petitioner has thus filed
this proceedings and seeks injunction in respect of the properties of the respondent
nos. 1 to 3 described at Ex.J to the petition.
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4. Respondent nos. 1 and 2 have filed affidavit in reply on 10 th April, 2013.
Respondent No.3 has filed affidavit in reply on 28 th June, 2013. In so far
respondent no.3 who was also one of the guarantor in his reply has submitted that
this court does not have jurisdiction and that in so far as properties mentioned
against his name at Ex.J at serial no.3, the said property is not owned by him and
he has no right, title or interest whatsoever in the said property. Defendant nos. 1
and 2 have raised three objections. It is stated that this court has no territorial
jurisdiction to entertain this petition in respect of dispute raised out of channel
finance agreement. It is submitted that in respect of the dispute raised under the
same agreement, respondents have filed an application under section 11 of the
Arbitration and Conciliation Act before the High Court Judicature at Orrisa,
Cuttack. It is stated that since the loan agreement was executed at Cuttack in the
State of Orissa and the facilities was sanctioned at Cuttack, Orissa, this court has
no jurisdiction. It is submitted that leave under clause 12 of the Letters Patent is
not obtained by the petitioner and thus on that ground also this court has no
jurisdiction. There is no reply on the merits of the matter though opportunity was
rendered by this court to file reply.
5.In so far as issue of territorial jurisdiction raised by the respondents is concerned,
a perusal of clause 5 of the loan agreement indicates that the amount disbursed by
the petitioner was to be paid by the respondents at Mumbai or at such place as
required by the lender. Clause 19 of the agreement provides that all the matters
shall be decided by a court or referable to a court shall be referred to the exclusive
jurisdiction of court at Mumbai.Clause 17 of the loan agreement provides for
arbitration for dispute resolution. It is stated in the petition that the facilities was
sanctioned at Mumbai and the amount was disbursed and repayable at Mumbai. In
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my view since part of the cause of action has arisen at Mumbai, this court has
territorial jurisdiction to entertain this petition under section 9 of the Arbitration
and Conciliation Act, 1996. Be that as it may, it is not in dispute that the petitioner
had obtained leave under Clause 12 of the Letters Patent though not required.
Respondents have not applied for revocation of the leave granted by this court. In
my view thus there is no substance in the objection raised in the affidavit in reply
filed by the respondents about the territorial jurisdiction of this court and the said
objection is accordingly rejected.
6. In so far as issue of jurisdiction raised in respect of this petition on the
ground that the respondents have already filed an application under section 11 of
the Arbitration and Conciliation Act before the High Court of Orrisa at Cuttack and
it is prior in point of time and in view of section 42 of the Arbitration and
Conciliation Act, all proceedings arising out of the same agreement has to be filed
in the same court is concerned, I am of the view that application filed under
section 11 of the Arbitration and Conciliation Act, 1996 is not a proceedings before
the court. Without going into the issue whether application filed by the respondent
before Chief Justice of High Court of Orissa is proper or not, since application
filed under section 11 is not before court, in my view under section 42 there is no
bar in entertaining this petition filed under section 9 which is before court. There
is no substance in the objection thus raised by the respondent nos. 1 and 2 in the
affidavit in reply.
7. Since there is no reply on merits of the application under section 9, the
averments made in the petition are deemed to have been admitted.
8. Even otherwise on perusal of the petition, it is clear that agreement entered
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into between the parties provided for event of default and consequences thereof.
Respondents in my prima facie view have committed default in making repayment
of the installments. There was no response to the demand notice. Claim of the
petitioner is thus required to be protected. Since there is no other security given to
the petitioner and since according to the petitioners, they have to recover
Rs.89,35,829.52 with further interest thereof, case is made out for injunction in
respect of the properties described in Ex.J to the petition. I am of the view that
petitioners have good chances of arbitration proceedings. Case is made out for
attachment before judgment.
9.
Till the arbitration proceedings are disposed of and for a period of four
weeks thereof, there shall be interim injunction in respect of the properties
described at Ex.J in terms of prayers (C). Respondents are also directed to file
affidavit disclosing the details within three weeks from today.
10. Petitioner is directed to convey this order to the respondents. No order as to
costs.
[R.D. DHANUKA, J.]
