Judgment:
The Court :- There will be an order in terms of prayer (a) of the petition.
The petitioner filed an application under section 9 of the Arbitration & Conciliation Act, 1996 before the Trial Court and prayed for the following orders:-
(a) Leave under Clause 12 of the Letters Patent be granted;
(b) A fit and proper person be appointed Receiver over and in respect of the said asset being one No. VOLVO. EC 290 Excavator, MSL No. 10467058 Chassis No. 15531 with the direction to take possesion thereof personally and/or through his authorized agents and the said Receiver and/or his agent be empowered to take police help, from the local police authorities within whose jurisdiction the said assets may be found lying for taking possession and bringing the same to Kolkata Injunction restraining the respondents, their servants and/or agents for representatives and/or assigns from disposing of and/or transferring and/or in any way dealing with or changing the identity of assets being one no. VOLVO EC 290 Excavator, MS. No. 10467058 Chasis No. 15531 thereof until further order.
(d) Upon taking possession of the asset the Receiver be directed to hand over possession thereof.
(e) Directions upon the said Receiver to sell the asset in satisfaction of the claim of the petitioner and thereafter the said Receiver be discharged.
(f) An-interim order in terms of prayers (b),(c) and (d) above.
(g) The costs of and incidental to this application be costs in the ensuing arbitration proceedings;
(h) Such further or other order or orders be made and direction be given as this Honble Court may deed fit and proper.
The Honble First Court passed an order appointing a Receiver over the assets mentioned in the prayer and further recorded the fact that there is an amount in excess of Rs.8 lacs which was due on account of the defaulted instalments and the petitioner will be entitled to a payment in excess of Rs.48 lacs in terms of the agreement. In view of that an injunction order was passed by the Honble First Court and further the Honble First Court pleased to appoint Mr. Bijit Basu, Advocate as Receiver for the purpose of making an inventory in respect of the Excavator which is stated to be situated in or around Bangalore.
The Receiver duly completed the inventory and filed its report before the Court. In these circumstances the matter came before the Honble First Court and the Honble First Court passed an order refusing the prayer of the petitioner to allow the Receiver to take possession of the property in question and further was pleased to discharge him from acting further as Receiver.
Being aggrieved this appeal has been filed. Despite service on a number of occasions none appears on behalf of the respondent to oppose the prayer of the petitioner.
The matter appeared before us on a number of occasions. We granted time to the respondent so that they can appear before us but inspite of such service or time granted none appears when the matter is taken up to-day. A case has been made in the petition by the appellant that the respondents are using the property of the petitioner in such a manner that said Excavator will be damaged and the security of the appellant may be lost.
Our attention has been drawn by the learned Counsel appearing in support of this appeal to Article IV of the agreement which deals with security and hypothecation. In Clause 4.1 it is provided that in consideration of the grant of facility by the Company (petitioner/appellant) to the Customer (respondent) and as security for the payment, repayment, reimbursement, as the case may be, of the secured obligations, the Customer (respondent) hereby hypothecates and charges unto and in favour of the Company (appellant/petitioner) as and by way of first exclusive charge the Asset in a form satisfactory to the Company (appellant) upon the terms and conditions specified in the said agreement. Our attention has been drawn to Clause 7.2 which deals with the consequences of default which is set out hereunder:
7.2 Consequences of Default If one or more of the events specified as Events of Default occur(s), the Company shall have the right to terminate the Agreement, accelerate the payment, repayment or reimbursement, as the case may be, of the Secured Obligations, and in the event of foreign currency Facility, to convert the outstanding amount of foreign currency Facility and all other outstanding amounts into Rupees at the Exchange rate quoted by; any authorized dealer or banker of the company as sale quote on the date of such conversion) whereupon the Company may by; a notice in writing to the Customer, declare all the outstanding Secured Obligations and all other monies due here under to be payable forthwith. Upon such acceleration, the Security Interest created in terms of this Agreement shall become enforceable and without prejudice to the other rights of the Company available in Law the Company shall have the following rights namely;
7.2.1 Take Over In any event of default by the Customer in repayment of the Secured Obligations in terms of the Agreement, or in the event of the Customer committing a breach of any of the terms and conditions under these present, the Company and its authorized officers and agents at its discretion shall be entitled at any time, acting as absolute owners thereof and without any notice to the Customer, and entirely at the Customers risk and expense, and if so required acting in its capacity as the attorney for and in the name of the Customer to (a) enter and remain in any place where the Asset or any of them shall be and to take possession thereof, recover and receive the same and/or appoint any officer or officers of the Company as the Receiver(s) of the assets and/or sell by public auction or private contract or otherwise dispose of or deal with all or any of them or any part of the asset and enforce realise, settle, compromise and deal with any of the rights aforesaid, without being bound to exercise any of these power or been liable for any loss against the Customers and apply the net proceeds of such sale in or towards liquidation of the balance outstanding and the Customer hereunder agrees to accept such Companys account of realization as final and binding.
If the amount recovered or realized by the Company pursuant to exercise of its powers as aforesaid, is less than the amount due to it from the Customers, the Customer irrevocably and unconditionally undertakes to pay and make good any short fall or deficiency claimed by the Company. (b) To collect, recover, compromise and give a good discharge for all claim an amounts then outstanding or thereafter arising under or in respect of the Secured Obligations or any part thereof and to take over or institute (if necessary using the names of the Customers ) all such proceedings in connection therewith as the Company in its absolute discretion thinks fit; and (c) To recover from the customer on demand or expenses incurred or paid by the Company in connection with the exercise of the power( or any of them) referred to in this Section 7.2.1. and to exercise any of these powers or being liable for any loss against the Customer and apply the net proceeds thereof in or towards liquidation of all the amounts due and owing by the Customer to the company under the Agreement.
A certificate of the accounts as presented by the Company setting out the amount of balance outstanding to them by the Customer shall be conclusive and binding against the Customer, in the absence of any manifest or proven error. In these circumstances Mr. Saha submitted that there is no other assets or security of the respondent to meet the claim of the petitioner and if the respondents are allowed to use the said Excavator in such a manner which would be prejudicial in nature and to the detriment of the security of the appellant herein.
He further submitted it is just and convenient to appoint a Receiver on the said Excavator otherwise the appellant will suffer prejudice. In these circumstances, it is submitted that a Receiver should be appointed with a direction to take possession of the said property in question and thereafter shall take necessary steps in accordance with Clause 7.2.1 to sell the said assets in question. Since inventory has already been done in this matter as has been pointed out by Mr. Saha, the property of the appellant-petitioner should be taken possession immediately by the Receiver and shall be at liberty to remove the said asset at a place to be provided by the appellant herein.
Having heard the learnd Counsel for the appellant we find that a case has been made out by; the petitioner/appellant that it is just and convenient that a Receiver should be appointed in the given facts.
Hence, Mr Mritunjoy Dey an Advocate of this Court is appointed Receiver in this matter at an initial remuneration of 600 G.M.s. and shall take formal possession of the said Excavator. Returnable 3 weeks hence.
All parties concerned are to act on a Xerox signed copy of this order on the usual undertakings.
Urgent Xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.