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2013 DIGILAW 2611 (BOM)

Tata Capital Financial Services Ltd. v. Garuda Vahan Pvt. Ltd.

2013-12-18

R.D.DHANUKA

body2013
JUDGMENT P.C. By this petition filed under section 9 of the Arbitration and Conciliation Act, 1996 petitioner seeks interim measures by way of injunction in respect of the property described at Ex.J to the petition. 2. Some of the relevant facts for the purpose of deciding this petition are as under:- 3. On 1st August, 2009, petitioner sanctioned channel finance facility for an aggregate amount of Rs. 20 crores in favour of the 1st respondent and entered into an agreement on 2nd January, 2010, on the terms and conditions agreed upon by and between the parties. On 2nd January, 2010 respondent nos. 2, 3 and 4 executed personal guarantee agreeing themselves to be jointly and severally liable to repay to the petitioner on demand the amounts due and payable by respondent no.1. Respondent no.1 also executed demand promissory note on 2nd January, 2010 and letter for right of lien and set off on 9th April, 2010. It is the case of the petitioner that since respondent committed default in making repayment of the installments, the petitioner issued notice on 27th December, 2012 calling upon respondents to pay Rs.89,35,829.52 with further interest thereof. There was neither any repayment in response to the said notice nor any response. Petitioner has thus filed this proceedings and seeks injunction in respect of the properties of the respondent nos. 1 to 3 described at Ex.J to the petition. 4. Respondent nos. 1 and 2 have filed affidavit in reply on 10th April, 2013. Respondent No.3 has filed affidavit in reply on 28th June, 2013. In so far respondent no.3 who was also one of the guarantor in his reply has submitted that this court does not have jurisdiction and that in so far as properties mentioned against his name at Ex.J at serial no.3, the said property is not owned by him and he has no right, title or interest whatsoever in the said property. Defendant nos. 1 and 2 have raised three objections. It is stated that this court has no territorial jurisdiction to entertain this petition in respect of dispute raised out of channel finance agreement. It is submitted that in respect of the dispute raised under the same agreement, respondents have filed an application under section 11 of the Arbitration and Conciliation Act before the High Court Judicature at Orrisa, Cuttack. It is stated that this court has no territorial jurisdiction to entertain this petition in respect of dispute raised out of channel finance agreement. It is submitted that in respect of the dispute raised under the same agreement, respondents have filed an application under section 11 of the Arbitration and Conciliation Act before the High Court Judicature at Orrisa, Cuttack. It is stated that since the loan agreement was executed at Cuttack in the State of Orissa and the facilities was sanctioned at Cuttack, Orissa, this court has no jurisdiction. It is submitted that leave under clause 12 of the Letters Patent is not obtained by the petitioner and thus on that ground also this court has no jurisdiction. There is no reply on the merits of the matter though opportunity was rendered by this court to file reply. 5. In so far as issue of territorial jurisdiction raised by the respondents is concerned, a perusal of clause 5 of the loan agreement indicates that the amount disbursed by the petitioner was to be paid by the respondents at Mumbai or at such place as required by the lender. Clause 19 of the agreement provides that all the matters shall be decided by a court or referable to a court shall be referred to the exclusive jurisdiction of court at Mumbai. Clause 17 of the loan agreement provides for arbitration for dispute resolution. It is stated in the petition that the facilities was sanctioned at Mumbai and the amount was disbursed and repayable at Mumbai. In my view since part of the cause of action has arisen at Mumbai, this court has territorial jurisdiction to entertain this petition under section 9 of the Arbitration and Conciliation Act, 1996. Be that as it may, it is not in dispute that the petitioner had obtained leave under Clause 12 of the Letters Patent though not required. Respondents have not applied for revocation of the leave granted by this court. In my view thus there is no substance in the objection raised in the affidavit in reply filed by the respondents about the territorial jurisdiction of this court and the said objection is accordingly rejected. 6. Respondents have not applied for revocation of the leave granted by this court. In my view thus there is no substance in the objection raised in the affidavit in reply filed by the respondents about the territorial jurisdiction of this court and the said objection is accordingly rejected. 6. In so far as issue of jurisdiction raised in respect of this petition on the ground that the respondents have already filed an application under section 11 of the Arbitration and Conciliation Act before the High Court of Orrisa at Cuttack and it is prior in point of time and in view of section 42 of the Arbitration and Conciliation Act, all proceedings arising out of the same agreement has to be filed in the same court is concerned, I am of the view that application filed under section 11 of the Arbitration and Conciliation Act, 1996 is not a proceedings before the court. Without going into the issue whether application filed by the respondent before Chief Justice of High Court of Orissa is proper or not, since application filed under section 11 is not before court, in my view under section 42 there is no bar in entertaining this petition filed under section 9 which is before court. There is no substance in the objection thus raised by the respondent nos. 1 and 2 in the affidavit in reply. 7. Since there is no reply on merits of the application under section 9, the averments made in the petition are deemed to have been admitted. 8. Even otherwise on perusal of the petition, it is clear that agreement entered into between the parties provided for event of default and consequences thereof. Respondents in my prima facie view have committed default in making repayment of the installments. There was no response to the demand notice. Claim of the petitioner is thus required to be protected. Since there is no other security given to the petitioner and since according to the petitioners, they have to recover Rs.89,35,829.52 with further interest thereof, case is made out for injunction in respect of the properties described in Ex.J to the petition. I am of the view that petitioners have good chances of arbitration proceedings. Case is made out for attachment before judgment. 9. I am of the view that petitioners have good chances of arbitration proceedings. Case is made out for attachment before judgment. 9. Till the arbitration proceedings are disposed of and for a period of four weeks thereof, there shall be interim injunction in respect of the properties described at Ex.J in terms of prayers (C). Respondents are also directed to file affidavit disclosing the details within three weeks from today. 10. Petitioner is directed to convey this order to the respondents. No order as to costs.