M/S. SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
PRESENTLY FUNCTIONING UNDER THE NAME AND STYLE M/S. SHRIRAM
FINANCE LIMITED, HAVING ITS REGISTERED OFFICE AT 3RD FLOOR,
MOOKAMBIKA COMPLEX, 123 ANGAPPANICKEM STREET, A HADY DESI
KACHERI ROAD, MYLAPOOR, CHENNAI, BRANCH OFFICE AT 1ST FLOOR,
THAMEEM BUILDING, RO JUNCTION, NEAR KSFE, PUNALUR ROAD,
ANCHAL P.O., KOLLAM REPRESENTED BY ITS AUTHORIZED SIGNATORY
JITHIN G., PIN - 691306
SRI.C.HARIKUMAR
SMT.SANDRA SUNNY
SHRI.ARUN KUMAR M.A
SMT.FARAH JYOTHI PRADEEP
1 ABHIJITH M.R.
AGED 26 YEARS
S/O. MANI POIKAYIL VEEDU, ELAMAD, AYUR KOLLAM, PIN - 691533
2 MANI B.
AGED 57 YEARS
POYKAYIL VEEDU, ELAMADU, AYUR KOLLAM, PIN - 691533
3 RAJESH RAJAN
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AGED 36 YEARS
S/O. RAJAN RAJESH BHAVAN, ELAMADU, AYUR KOLLAM, PIN - 691533
THIS ARBITRATION APPEALS HAVING COME UP FOR ADMISSION ON 02.06.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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Judgment
Dated this the 02nd June, 2025
1. The appellant is the financier who granted loan of Rs.10 lakhs to the
1st respondent with respect to the vehicle bearing Registration No. KL-
46-Q-0957. In order to secure the said loan, hypothecation was created
by executing Hypothecation Agreement and endorsement regarding
the hypothecation is endorsed in the Registration Certificate of the
vehicle. The respondents 2 and 3 are the guarantors to the loan.
2. The respondents defaulted certain instalments for repayment of the
loan and thereupon the appellant decided to invoke the arbitration
clause in the Hypothecation Agreement in order to recover the entire
loan amount. Invoking Section 9 of the Arbitration and Conciliation,
Act 1996, the appellant filed MA(Arb)No.110/2025 before the District
Court, Kollam to obtain possession of the said vehicle by appointing
an Advocate Commissioner, as an interim measure. As per the interim
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order in MA(Arb) 110/2025 the vehicle was repossessed from the 1 st
respondent through the Advocate Commissioner. The respondents
filed OP(C)No.1099/2025 before this Court, challenging the order by
which the vehicle was repossessed. This court considered the OP(C)
on 16.04.2025 and after hearing the appellant passed Annexure A2
order that the petitioner therein may move the vacation court for
release of the vehicle by offering to pay the total overdue amount and
if such an application is filed the same shall be considered on the next
posting day itself.
3. The respondents filed I.A No. 3/2025 for returning possession of the
vehicle on clearing the outstanding instalments. The respondents
deposited Rs. 2,35,636/- in Court towards the overdue amount and
filed a Memo in this regard. Taking note of the fact that the said
amount covers the entire overdue amount, the Trial Court allowed I.A
No. 3/2025 directing the appellant to stop proceedings regard to the
sale of the vehicle and handover the vehicle to the respondent within
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a period of seven days. It is made clear that the respondents shall
continue to pay the monthly instalments of the loan amount in terms
of the agreement at the specified time, failing which the appellant will
be at liberty to repossess the vehicle in due course of law and that the
respondents shall not part with the possession of the vehicle in any
manner without obtaining written permission of the appellant and if
any transfer of vehicle is made violating the above conditions, the
same shall not be valid.
4. Now, the present appeal is filed by the petitioner before the Trial Court,
contending that if the vehicle is released there is every chance of the
respondents removing the vehicle from the jurisdiction of this Court
and in such case, the appellant will not be able to enforce the
hypothecation against the vehicle. Learned Counsel for the appellant
Sri.C.Harikumar contended that necessary safeguards have to be made
to prevent the same, at least directing the 1st respondent to execute a
Bond for production of the vehicle in case of future defaults in
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repayment of the loan.
5. On the other hand, the learned counsel for the respondents
Sri.Alexander George contended that there is already a hypothecation
noted in the Registration Certificate of the vehicle and the conditions
in the impugned order itself. Hence no additional safeguards are
necessary to protect the interest of the appellant. The Appellant had
filed a Review Application before the District Court seeking to add an
additional condition by including execution of Bond for the production
and the same was dismissed.
6. Learned counsel for the appellant submitted that he said Order in
Review Application is filed subsequent to the filing of this Appeal and
the appellant intends to challenge the same.
7. On account of the said submission and on account of the delay in
finalisation of the proceeding, the learned Counsel for the respondents
offered to provide a Bond in order to prevent further delay to get
possession of the vehicle.
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8. In the light of the said submission of the counsel for the respondents,
I allow this Appeal modifying the impugned order by including the
following directions as the direction No. 4 therein.
"4. The 1st respondent/ Registered Owner of the vehicle
shall execute a Bond for Rs.25,000/- in favour of the
petitioner to produce the vehicle in case a future
Application under S.9 of the Act is filed by the
petitioner. On execution of the bond, the appellant
shall release possession of the vehicle to the 1st
respondent immediately."
9. After the release of the vehicle, the petitioner is permitted to file an
Application to withdraw the amount Rs. 2,35,636/- lying in court
deposit and on such filing of the Application, the District Court is
directed to pass orders thereon within a period of ten days from the
date of receipt of the said Application.
Sd/-
M.A.ABDUL HAKHIM
JUDGE
jma
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PETITIONER ANNEXURES
ANNEXURE A1 THE TRUE COPY OF THE ORDER IN I.A.NO 2 OF 2025 IN
C.M.A.(ARB.)NO 110 OF 2025 PASSED BY THE HON'BLE
ADDITIONAL DISTRICT JUDGES COURT-VI, KOLLAM
08.04.2025
ANNEXURE A2 THE TRUE COPY OF THE ORDER IN O.P.(C.)NO 1099 OF
2025 PASSED BY THIS HON'BLE COURT DATED 16.04.2025
ANNEXURE A3 THE TRUE COPY OF THE JUDGMENT IN O.P.(C.)NO 1099
OF 2025 PASSED BY THIS HON'BLE COURT DATED
19.05.2025
ANNEXURE A4 THE TRUE COPY OF THE PETITION FILED BY THE
RESPONDENTS IN I.A.NO 3 OF 2025 IN C.M.A.(ARB.)NO
110 OF 2025 ON THE FILE OF THE HON'BLE ADDITIONAL
DISTRICT JUDGES COURT-VI, KOLLAM DATED 19.05.2025
ANNEXURE A5 THE TRUE COPY OF THE PETITION IN I.A.NO 5 OF 2025
IN C.M.A.(ARB.)NO 110 OF 2025 ON THE FILE OF THE
HON'BLE ADDITIONAL DISTRICT JUDGES COURT-VI,
KOLLAM FILED BY THE APPELLANT DATED 26.05.2025
