Madras High Court
Manekchand Panachand Trading vs Vivriti Capital Limited on 6 November, 2025
Author: G.Jayachandran
Bench: G.Jayachandran
Arb.Appeal Nos.55 & 56 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.11.2025
CORAM:
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
AND
THE HONOURABLE MR.JUSTICE MUMMINENI SUDHEER KUMAR
ARBITRATION APPEAL Nos.55 & 56 of 2025
Arb.Appeal No.55/2025 :
Manekchand Panachand Trading
Investment Company Private Limited ... Appellant
-vs-
1.Vivriti Capital Limited
2.Sadhana Nitro Chem Limited,
represented by its Director,
Mr.Abhishek Asit Javeri.
3.Catalyst Trusteeship Limited ... Respondents
Arb.Appeal No.56/2025 :
Sadhana Nitro Chem Limited,
represented by its Director,
Mr.Abhishek Asit Javeri. ... Appellant
-vs-
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Arb.Appeal Nos.55 & 56 of 2025
1.Vivriti Capital Limited
2.Manekchand Panachand Trading
Investment Company Private Limited
3.Catalyst Trusteeship Limited ... Respondents
PRAYER : Appeals against the common order, dated 24.10.2025, passed by
the learned sole Arbitrator.
For Appellant & Respondent No.2 in both appeals : Mr.P.S.Raman,
Senior Counsel,
for Ms.Brinda Mohan.
For Respondent 1 in both appeals : Mr.Vijay Narayan,
Senior Counsel,
for Mr.A.Arjun Suresh.
JUDGMENT
(By Dr.G.Jayachandran,J.)
These appeals are filed under Section 37 of the Arbitration and
Conciliation Act,1996, against the order passed by the learned sole Arbitrator
under Section 17 of the said Act, pending disposal of the arbitration
proceedings.
2. Appellant is the borrower and first respondent is the financier.
The financier advanced loans to the borrower and the borrower was liable to
pay Rs.24,28,17,529/- approximately under three heads as below :
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Master General Terms Agreement : Rs.11,94,44,428/-
Master Rental Agreement : Rs. 6,23,73,101/-
Master Lease Agreement : Rs. 6,10,00,000/-
3. On default of payment by the borrower, the financier foreclosed
the loan accounts and recovered a sum of Rs.21,08,53,986/-, by realising
security deposit and sale of pledged shares. For recovery of the balance
amount of Rs.3,19,63,543/-, the matter has been referred to the Arbitrator.
Counter claim by the borrower is also pending. In the meanwhile, on an
application filed under Section 17 of the said Act at the instance of the
borrower, namely, the principal borrower and the guarantor, the learned
Arbitrator has passed an interim order, which reads as below :
''21. Consequently, the two applications under Section 17 of
the said Act are disposed of by continuing the order passed by the
Hon'ble High Court of Madras, qua the parties herein,
unconditionally till the end of working hours of October 29,2025. If,
by such time, the applicants or either of them deposits a sum of
Rs.3.5 crore by way of a fixed deposit in any nationalised bank
having a branch within the vicinity of the High Court of Madras and
also furnishes an unimpeachable copy of any receipt in respect
thereof to advocates for the claimant, the order passed by the High
Court will continue till the award is pronounced and subject to the
provision in such regard in the award, on condition that the fixed
deposit will be free from all lien and encumbrances and will be
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Arb.Appeal Nos.55 & 56 of 2025
ready to be encashed unimpeded upon this tribunal's first direction
in such regard.''
4. The appellant, aggrieved by the said conditional order, is before
this Court, primarily on the ground that the entire dispute to be resolved
through arbitration is regarding the Master Lease Agreement with Larsen &
Toubro, wherein the financier claims a sum of Rs.6.10 crores, to be payable by
the appellant, and, in fact, the amount, which is lying with Larsen & Toubro
for supply of Hydrogen Electrolysers, is in respect of the lease agreement, the
terms of which indicate that the financier is the owner till the discharge of the
last instalment, and, for not having paid the balance price for the said
equipment, Larsen & Toubro has not delivered the equipment to the appellant.
In such circumstances, there is no necessity for imposing a condition to
deposit Rs.3.5 crores for injuncting the financier from taking any drastic
action for recovery.
5. Mr.P.S.Raman, learned Senior Counsel, appearing for the
appellant, would submit that the offer made by the borrower to furnish
security of property worth Rs.12.00 crore at Raigad, which is unencumbered,
is not considered by the learned Arbitrator, which has caused irreparable
inconvenience to the appellant. He would further contend that the financier
was supposed to release the balance payment to Larsen & Toubro on
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21.04.2025, but he failed to do so, though the equipment was made ready and
the same was intimated to the financier. This had led to non-payment of
committal charge of Rs.13.00 lakhs, which was due and payable on
30.04.2025. He would also submit that for a paltry sum of Rs.10.00 lakhs, the
entire loan agreement got foreclosed and recovery process commenced by the
financier. Though these matters are now sub-judice before the learned
Arbitrator, the bottomline of the learned Senior Counsel is that his offer to
furnish an unencumbered property worth more than Rs.12.00 crores as
security was not considered by the learned Arbitrator, while granting interim
protection of injunction.
6. In the considered view of this Court, the respondent cannot
have any serious objection to the above proposal of the appellant, since the
interest of the respondent will be well protected if an unencumbered property
worth more than Rs.3.5 crores is furnished as security before the learned
Arbitrator along with an affidavit that the appellant will not create any
encumbrance till the disposal of the arbitration proceedings. We make it clear
that if the respondent has any doubt about the title of the property, it is
always open for them to get a copy of the title document and get it verified. If
there is any encumbrance in the property, the same may be brought to the
notice of this Court.
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Arb.Appeal Nos.55 & 56 of 2025
7. This Court, on perusal of Valuation Report of the property, now
being offered as security, given by M/s.Rane Engineers and Surveyors Pvt.
Ltd., Mumbai, dated 17.03.2021, is of the view that interest of the respondent
will be protected, if the said property is given as security. The dispute is
regarding purchase of Hydrogen equipment from Larsen & Toubro from the
finance provided by Vivriti Capital Limited. It is admitted by both the parties
that a sum of Rs.6.10 crores, given as advance payment to Larsen & Toubro
lakhs, is still lying with it. Hence, the appellant is directed to deposit the
original documents of the property, which is now being offered as security,
along with latest valuation report and an affidavit of undertaking that the
property is unencumbered and, in future, no encumbrance would be created
over the said property, pending disposal of the arbitration proceedings.
8. Copy of the Affidavit, Valuation Report and the property
documents should be furnished by the appellant-borrower to the first
respondent-financier. Time for deposit of title documents along with affidavit is
two weeks and for furnishing valuation report, three weeks.
9. Any observation made in this order is limited to the disposal of
the appeals and shall have no bearing on the arbitration proceedings.
10. After pronouncement of the above order in the open Court,
learned Senior Counsel for the appellant submitted that in the application
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Arb.Appeal Nos.55 & 56 of 2025
filed under Section 17 of the Act by the third party - guarantor, who is the
appellant in Arbitration Appeal No.55 of 2025, the secondary prayer for
directing the claimant - Vivriti Capital Limited and the third respondent -
Catalyst Trusteeship Limited to furnish copies and details of all
correspondence, including contract notes, bills, invoices etc., in respect of sale
of shares by the financier, who realised the loan amount, has not at all been
considered by the learned Arbitrator.
11. In this regard, it is the opinion of this Court that the learned
Arbitrator has rightly ignored the said prayer, since the said prayer, as
couched, does not fall within the scope and ambit of Section 17 of the Act.
Hence, no further reference is required thereto.
12. Appeals are disposed of accordingly. No costs. Consequently,
the connected C.M.P.Nos.27263 and 27268 of 2025 are closed.
(DR.G.J.,J.) (M.S.K.,J.)
06.11.2025
Index : Yes/No
Internet : Yes/No
dixit
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Arb.Appeal Nos.55 & 56 of 2025
DR.G.JAYACHANDRAN,J.
AND
MUMMINENI SUDHEER KUMAR, J.
dixit
ARB.APPEAL Nos.55 & 56 of 2025
06.11.2025
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