Escorts Finance Ltd. vs Mr. Mohd. Hanif D. Khan
2001 Latest Caselaw 667 Del

ORDER

Sanjay Kishan Kaul, J.

1. CM No. 505/2001

2. This is an application filed by the Appellant under Section 151 of the Code of Civil Procedure to exempt him form filing certified copies of the annexures which have been filed for the purpose of reference. In vie of the facts stated this application is allowed and stands disposed of FAO(OS)206/2001 and CM 506/2001

3. The present appeal arises form an order passed by the learned Single Judge dated 26th April , 2001 in OMP 119/2001 whereby the petition filed by the Appellant Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the Act) for appointment of Receiver has been dismissed. The Appellant has filed the a foresaid petition stating t hat the Appellant is in the business of the lease financing and hire purchase of vehicles, equipments and machineries an is a leading finance company of the country. The Appellant had entered into a hire purchase agreement with the respondent whereby the respondent was the hire of one Tata Safari bearing registration No. MHK06/F7188 and the period of agreement was 36 moths. A sum of Rs.,5,60,000/- was disbursed by the Appellant to the respondent under the hire purchase agreement to be repaid back by the respondent in 36 monthly Installments of hire charges of equal amount of Rs.22,440/-. The respondent defaulted in the timely payment of the Installments and the arrears stand accumulated to be Rs.6,30,690/- part form over due interest charges. The Appellant issued a notice dated 19th July, 2000 to the respondent calling a notice, the respondent had not made the payment. In view of these facts and in view of Clause 21 of the hire purchase agreement providing for arbitration in case of disputes the Appellant vide notice dated 19th July, 2000 had invoked the arbitration clause in terms of the agreement and appointed Sh. H.N. Gupta Advocate, as the sole arbitrator in respect of the disputes to be adjudicated. The Appellant sought the appointment of a Receiver to forthwith seize the vehicle and take possession thereof form the respondent. This relief was declined by the learned Single Judge in terms of the order dated 26th April, 2001 on the ground that the Appellant had already appointed arbitrator and since the arbitrator is empowered to appoint a Receive, if necessary, there was no need for he court to pas any order for the appointment of the Receiver. Mr. B.L. Wali, learned counsel of the Appellant has relied on the judgment of the Supreme Court in the case of M/s Sundarma Finance Ltd. vs.M/s NEPC India Ltd and more specifically para 12 which reads:-

"12. The reading of Section 21 clearly shows that the arbitral proceeding commence on the date on which a request of a dispute to be referred to arbitration is received by the respondent. It is in this context that we have to examine and interpret the expression "before or during arbitral proceedings" occurring in Section 9 of the 1996 Act. We may here observe t hat though Section 17 give the arbitral tribunal the power to pass orders the same cannot be enforced as orders of a court. It is for this reason that Section 9 admittedly gives the Court power to pass interim orders during the arbitration proceedings."

4. It is the contention of learned counsel for the Appellant that power to appoint Receiver vests both in the Court as well as the Arbitrator but in view of the observations made by the Hon'ble Supreme Court in Sundaram Finance Ltd. vs. M/s NEPC India Ltd., (surpa) it was a fit case where learned Single Judge should have exercised the power to appoint the Receiver. We re in agreement with the submissions of the learned counsel for the Appellant that the case did not merit summary dismissal and it was necessary for the learned Single Judge to have considered the merits of the matter for the appointment of the Receiver as prayed by the Appellant. The mere fact that Arbitrator had been appointed, who also could exercise power to appoint a receive could not have been made a ground to summarily dismiss the petition. The appeal is therefore allowed and the impugned order dated 26th April, 2001 is aside. The Petition is directed to be restored to its original number. Learned Single Judge will now proceed to decide the OMP in accordance with the law and in terms of the observations of the Hon'ble Supreme Court in M/s Sundaram Finance Ltd. vs. M/s NEPC India Ltd (surpa). Appellant to appear before before the learned Single Judge on 9th May,2001.