Calcutta High Court
L& T Finance Limited vs Ro Care India & Ors on 26 February, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-29
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/71/2025
L& T FINANCE LIMITED
VERSUS
RO CARE INDIA & ORS.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 26th February, 2025.
Appearance:
Ms. Archana Chowdhary, Advocate
Mr. Sariful Haque, Advocate
... for the petitioner.
1. Affidavit of service is taken on record.
2. Despite service, none appearson behalf of the respondents.
3. The petitioner seeks protection for an unsecured loan amounting to
Rs.17,58,000/-. The petitioner extended the loan to the respondents. According
to the petitioner, the loan was not repaid. Thus, the petitioner has filed this
application on the strength of an arbitration clause contained in the business
loan agreement. The petitioner prays that the respondent should be injuncted
from transferring alienating or creating any third party interest in respect of
properties belonging to the respondents, for security of a sum of
Rs.17,58,000/- and for appointment of Receiver over the properties that the
respondents may disclose.
4. The loan was unsecured. The petitioner has not made any averment
with regard to the immovable properties over which the injunction is prayed
before. The prayer is based on the basis that this court must direct the
respondents to disclose all their assets and bank account and upon such
disclosure, order be passed for appointment of receiver and then a blanket
injunction be issued over all the properties.
5. In this case, nothing has been disclosed which would suggest that
the respondents were intending to either remove or dispose of the property or
the assets with an intention property to defraud the creditor. In the decision of
Harleen Jairath vs Prabha Surana and Another reported in 2019 SCC
Online Cal 2372, the Division Bench of this High Court held as follows:-
"35. While Order 39 Rule 1(a) and 1(c) refer to the property in dispute,
Order 39 Rule 1(b) does not put any such restriction as it uses the
phrase "to remove or dispose of his property with a view to divert his
creditor." The property contemplated under Order 39 Rule 1(b) may not
be the property in dispute in the suit. An injunction can also be granted
by the court to restrain a threatened removal or disposal of property
with a view to defrauding creditors. If the court is satisfied that the
defendant intends to remove or dispose of his property and his intention
in doing so is to defraud his creditors, injunction under Rule 1(b) can be
granted (Padam Sen v. State of U.P., AIR 1961 SC 218). Such property
may be movable or immovable. Unlike clause (a) the applicability of
clause (b) is not restricted or limited to the "property in dispute in a
suit." Hence, clause (b) can be invoked even if the property is wholly
outside the subject matter of the suit. (Albert Judah Judah v. Rampada
Gupta, AIR 1959 Cal 715). Only thing is that threat or intention to
remove or dispose of property to defraud creditors must be supported
by sufficient particulars. (Anand Prasad Agarwalla v. Tarkerhwar
Prasad, (2001) 5 SCC 568)."
6. This Court does not find any, prima facie, case to pass an interim
order of injunction, as prayed for. The petitioner has filed this application in
the nature of an attachment before judgment, even without invoking the
arbitration clause.
7. An application under Section 9 of the Arbitration and Conciliation
Act, cannot be a mechanism for recovery of the loan which is admittedly an
unsecured loan. An unsecured loan cannot be protected by an injunction over
immovable property, unless a strong case is made out, which will persuade the
court to hold, prima facie, that the respondents were alienating their assets
and removing their funds which would ultimately render any award that may
be passed in favour of the petitioner, a paper decree.
8. Under such circumstances, the application is disposed of without any
order. If the situation demands that an order of injunction or any such interim
protection in respect of the alleged loan, would become necessary, the
petitioner may proceed in accordance with law.
9. The petitioner is at liberty to invoke arbitration and make all interim
prayers before the learned Arbitrator.
(SHAMPA SARKAR, J.)
pa/sb
