KARVY FINANCIAL SERVICES LTD Vs. PROGRESSIVE CONSTRUCTION LTD

JUDGEMENT

(1.) BY this Arbitration Petition, the Petitioner is inter alia seeking appointment of Court Receiver, High Court, Bombay, in relation to the properties as more particularly described as "mortgaged properties" in paragraph 6 of the Arbitration Petition. The Petitioner has also prayed for an order and direction against the Respondents for disclosure of their movable as well as immovable properties/assets.

(2.) THE Respondents had approached the Petitioner for availing loan facilities for business purpose to the extent of Rs. 26,42,50,000/ -which were sanctioned by the Petitioner vide its sanction letter dated 5th December, 2012. Admittedly, the Respondents executed a Business Loan Agreement dated 4th December, 2012, and also created a mortgage by deposit of original title deeds in respect of the three immovable properties in relation thereto. The Respondents committed default in relation to the aforesaid credit facilities. Since the Respondents failed and neglected to make payments despite being called upon to do so by the Petitioner, the Petitioner by its letter dated 15th July, 2013, invoked arbitration.

(3.) DURING the pendency of the arbitral proceedings, the Petitioner initially filed Arbitration Petition No. 887 of 2013 before this Court seeking various interim reliefs including appointment of Receiver in relation to the mortgaged properties. An ad -interim order dated 8th October, 2013, was passed in the said Petition and the Court Receiver, High court, Bombay, was appointed as Receiver in respect of the mortgaged properties. The Respondents were also directed to file their affidavits disclosing their movable and immovable assets. Since the Respondents approached the Petitioner for settlement, the Petitioner for a period of 9 months did not approach the Receiver for implementation of the order dated 8th October, 2013. It is only when the said Arbitration Petition No. 887 of 2013 came up for final hearing that the Court was informed that the settlement had failed. The Court therefore passed an order dated 10th July, 2014, directing the Court Receiver to implement the ad -interim order by taking symbolic possession of the mortgaged properties on 18th July, 2014. Thereafter again the parties held settlement talks and a consent award dated 17th July, 2014, was obtained in terms of the consent terms filed by both the parties before the learned Arbitrator. However, the cheques issued by the Respondents to the Petitioner were dishonoured upon presentment and returned with the remark "insufficient funds".