Hdfc Bank Ltd vs Dinesh Shanmathuran
2022 Latest Caselaw 1393 Ker

                  IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                   PRESENT
                  THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
        TUESDAY, THE 1ST DAY OF FEBRUARY 2022 / 12TH MAGHA, 1943
                            OP(C) NO. 200 OF 2022
AGAINST THE ORDER/JUDGMENT IN CMA(Arb) 136/2021 OF PRINCIPAL SUB COURT /
                        COMMERCIAL COURT, TRIVANDRUM
PETITIONER:

              THE HDFC BANK LTD.
              HAVING ITS REGISTERED OFFICE AT HDFC BANK HOUSE,
              SENAPATI BAPAT MARG, LOWER PAREL WEST,
              MUMBAI - 400 013
              AND ITS BRANCH OFFICE AS DEPARTMENT FOR SPECIAL OPERATIONS
              HDFC BANK LTD., 1ST FLOOR CHOICE TOWERS, PALARIVATTOM
              ERNAKULAM-REPRESENTED BY ITS LEGAL MANAGER, SHYAM MENON
              BY ADVS.
              P.SATHISAN
              DONA AUGUSTINE


RESPONDENT:

              DINESH SHANMATHURAN,
              AGE AND FATHER'S NAME NOT KNOWN TO THE PETITIONER
              SHANMATHURA BHAVAN
              13/331, VENNICODE P.O. VETTOOR
              CHERUNNMOOR, TRIVANDRUM, 695 318
              KERALA

     THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 01.02.2022, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 OP(C) NO. 200 OF 2022
                                    2


                                                              CR

                              JUDGMENT

Dated this the 1st day of February, 2022

HDFC Bank Limited., the petitioner herein is aggrieved in the

matter of issuance of notice to the other side while proceeding with

the execution of an interim award passed under Section 17 of the

Arbitration and Conciliation Act, 1996 by the Arbitrator to take

possession of the vehicle offered as security to the Bank while

availing loan.

2. It is argued by the learned counsel for the petitioner

that issuance of notice before ordering possession of the vehicle in

obedience to the interim award of the Arbitrator would facilitate

hiding of the vehicle by the respondent so as to defeat execution

of the interim award. Though the learned counsel was asked to

justify the said argument based on binding precedent, the learned

counsel failed in this endevour.

3. In view of this argument, a pertinent question crops up

consideration is; whether issuance of notice is mandatory prior to

taking possession of a vehicle in execution of an interim award OP(C) NO. 200 OF 2022

passed by the Arbitrator.

4. In the decision reported in HDFC Bank Limited

(M/s.) Vs. Manaf Arakkaveettil (2018 (4) KHC 84), this Court

held that issuance of notice prior to taking possession of vehicle

could often entail vanishing of the only security available. It was

held further that if the vehicle in question is removed, very often

the creditor would be left without any asset of the debtor to

proceed against for recovery of the debt.

5. Though the normal rule is that before passing any

coercive orders, notice to the other side is necessary, otherwise,

the same is violation of the principles of nature justice. The

fundamental principle of natural justice viz, Audi alteram partem,

otherwise termed as Audiatur et altera pars means listen to the

other side or hear the other side. Thus no person should be

judged without a fair hearing in which each party is given the

opportunity to respond the allegation against him. However, while

issuing ex parte order of injunction and other orders of interim

nature where issuance of notice and the waiting period for getting

the notice served, would defeat the purpose of the order or

destruction of the subject matter ex parte order without notice is OP(C) NO. 200 OF 2022

often practiced as permitted by law. The rational is that the other

party would get opportunity to submit his version even after

passing of the interim order without notice, to address his

grievance thereafter. By applying the same principle, if vehicle is

ordered to be possessed without notice then also the aggrieved

person could very well appear before the court or the Arbitrator, as

the case may be, and get back the vehicle on paying the due

amount as per the interim order. If the aggrieved person fails to

pay the amount due, the vehicle is liable to be auctioned if the

arbitration agreement provides so. Therefore, there is no mandate

that notice shall be issued before ordering taking possession of the

vehicle since issuance of notice prior to taking possession of the

vehicle would facilitate hiding and transporting the vehicle outside

the jurisdiction of the execution court with intention to defeat the

execution of the interim order.

In view of the matter, the learned Sub Judge went wrong in

issuing notice before taking possession of the vehicle by appointing

a Commission. Therefore, the said order is set aside. The learned

Sub Judge is directed to issue an order to take possession of the

vehicle after dispensing notice to the other side and execute the OP(C) NO. 200 OF 2022

interim order passed by the Arbitrator as per law.

This Original Petition (Civil) stands disposed of as above.

Registry is directed to forward a copy of this order to the

Court below concerned, within seven days, for compliance and

information.

Sd/-

A. BADHARUDEEN JUDGE

nkr OP(C) NO. 200 OF 2022

APPENDIX OF O.P(C) 200/2022

PETITIONER ANNEXURES EXHIBIT P1 THE TRUE COPY OF THE INTERIM ORDER IN I.A.NO.2086/2021 IN ARB NO.5339 M/2021 PASSED BY THE TRIBUNAL DATED 26.10.2021 EXHIBIT P2 TRUE COPY OF THE PETITION FILED UNDER SECTION 17(2) SUBMITTED BY THE PETITIONER BEFORE THE HON.SUB COURT (COMMERCIAL COURT), THIRUVANANTHAPURAM DATED 15.12.2021.

EXHIBIT P3 TRUE COPY OF INTERIM APPLICATION NO.02/2021 IN CMA(ARB)NO.13 OF 2021 FILED BY THE PETITIONER BEFORE THE HON'BLE SUB COURT (COMMERCIAL COURT), THIRUVANANTHAPURAM EXHIBIT P4 TRUE COPY OF THE INTERIM ORDER IN I.A.NO.02/2021 IN CMA (ARB) NO. 136/2021 PASSED BY THE HON'BLE SUB COURT (COMMERCIAL COURT),THIRUVANANTHAPURAM DATED 21.12.2021.

EXHIBIT P5 TRUE COPY OF THE INTERIM ORDER IN I.A.NO.01/2021 IN CMA (ARB) NO.137 OF 2021 PASSED BY THE HON'BLE SUB COURT (COMMERCIAL COURT), THIRUVANANTHAPURAM DATED 21.12.2021.