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Tata Capital Financial Services ... vs M/S Airen Metals Pvt. Ltd & Ors on 13 August, 2021

Author: Sanjeev Narula

Bench: Sanjeev Narula

$~16
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      O.M.P.(I) (COMM.) 28/2021 & I.A. 9565/2021 & 9566/2021.
       TATA CAPITAL FINANCIAL SERVICES LIMITED
                                                          ..... Petitioner
                      Through: Mr. Sudhinder, Ms. Ekta Bhasin and
                                  Mr. Sanidhya Sonthalia, Advocates.

                            versus

       M/S AIREN METALS PVT. LTD & ORS.
                                                              ..... Respondent
                            Through:      Mr. Rajesh Gautam, Advocate.

       CORAM:
       HON'BLE MR. JUSTICE SANJEEV NARULA
               ORDER

%              13.08.2021

[VIA VIDEO CONFERENCING]

1. The Petitioner, a non- Banking Financial Company, has filed the present petition seeking urgent interim reliefs on account of disputes having arisen under Loan Cum Guarantee (Channel Finance) Agreement dated 15th January, 2020 whereunder a loan of Rs. 7,50,00,000/- was extended by the Petitioner to Respondent No. 1, for which Respondent Nos. 2 to 5 stood as guarantors.

2. On 4th February, 2021, this Court at an interim stage granted an ex-parte order in favour of the Petitioner to the following effect:

"2. Vide a Channel Finance Agreement, dated 15th January, 2020, a loan of Rs. 7.50 crores was extended by the petitioner to Respondent No. 1, for which Respondent Nos. 2 to 5 stood guarantors for a term of 12 months. Respondent Nos. 2 to 5 undertook jointly and severally to repay the loan amount on demand, consequent on any default or delay in repayment of the O.M.P.(I) (COMM.) 28/2021 Page 1 of 8 loan amount by Respondent No. 1.

3. Affidavits of Net Worth dated 11th January, 2020 were also executed by Respondent Nos. 2 to 5.

4. Respondent No. 1 further executed a Deed of Hypothecation dated 18th January, 2020, creating a first and exclusive charge over the inventory of Respondent No. 1, both present and future, funded by the petitioner towards security for availing of the said Channel Finance Facility. Affidavits were also executed by Respondent Nos. 2 to 5 on 17th January, 2020 and 21st January, 2020, indemnifying the petitioner against all losses, damages, claims and expenses owing to mismatch in signatures.

5. Subsequently, requests, by the Respondent No. 1 for deferment of repayment of the loan were acceded to, by the petitioner, vide letters dated 22nd April, 2020 and 24th July, 2020.

6. The petitioner alleges that the Respondent No. 1 continued to make defaults in repayment of the loan amount, resulting in A Loan Recall Notice, dated, 30th November, 2020 being issued by the petitioner to the respondents for immediate repayment of dues outstanding of the aforesaid Channel Finance Agreement.

7. The respondents, in the response dated 8th December, 2020, pleaded thus:

"4. Contents of para No. 4 of your Notice are not admitted as stated. Though it is not disputed that my clients had requested your client for deferment of repayment falling due for the month of April and May 2020 by 90 days which was because of breakdown of unprecedented pandemic due to Covid-19 on account of which all the business activities of my clients stopped and even complete Lock Down had been imposed in the country on account of which the business activities came to a stand still and no manufacturing activity could take place in their works office and consequently no flow of funds had been there. The request so made by my clients was in terms of the moratorium policy of RBI under which repayments were relaxed during pandemic period. Hence, the acceptance of request of my clients by your client was under the said policy."

(Emphasis supplied)

8. The petition further avers that the Respondent Nos. 2 and 3, consequent to entering into the aforesaid Channel Finance Agreement, alienated their four properties, owned by them, and situated at Jaipur, by relinquishing all rights and shares in the said properties to their mother, vide Release Deed O.M.P.(I) (COMM.) 28/2021 Page 2 of 8 dated 4th March, 2020. This, submits, the petitioner, has resulted in a legitimate apprehension, in the petitioner's mind, that the respondents would, any which way, attempt to defeat the right of the petitioner to repayment of the loan extended by the petitioner to Respondent No. 1 under the aforesaid Channel Finance Agreement, for which Respondent Nos. 2 to 5 have stood guarantors.

9. Para 18 of the petition submits that as per the Affidavits of Net Worth filed by the Respondent Nos. 2 to 5, they are owners of the following properties:

"(i) Flat No. 406, Rama Heritage, V.D. Nagar, Jaipur (in the networth affidavit of Respondent No.2).

(ii) T-39, Raisar Plaza, Indra Bazaar, Jaipur (in the networth affidavit of Respondent No. 2).

(iii) Flat No. B-138, Tower -1 Sahyog Apartment, V.D. Nagar, Jaipur (in the networth affidavit of Respondent No. 3).

(iv) Flat No. B-56, Tower -1 Sahyog Apartment, V.D. Nagar, Jaipur (in the networth affidavit of Respondent No. 3).

(v) Flat No. B-117, Tower -1 Sahyog Apartment, V.D. Nagar, Jaipur (in the networth affidavit of Respondent No.4).

(vi) Flat No. Q-111/8, Jeevan Chhaya, Sector -6, VD Nagar, Jaipur (in the networth affidavit of Respondent No.4).

(vii) Flat No. 304, Ganapti Tower, VD Nagar, Jaipur (in the networth affidavit of Respondent No.4).

(viii) Flat No. M-109, Ashiana Utsav, Manjari 2, Kalwar Road, Jaipur (in the networth affidavit of Respondent No. 5)."

10. The petitioner, in the petition, prays, inter alia, for an ad interim restraint against Respondent Nos. 2 to 5 from alienating or creating any third party interest in respect of the aforesaid properties.

11. In view of the facts as recited hereinabove and especially in view of the above averment, contained in para 18 of the petition that after having entered into the Channel Finance Agreement, the Respondent Nos. 2 to 5 relinquished their rights in respect of four of the properties in favour of their mother, the petitioner is, in the interests of justice, entitled to an ad interim direction for restraint as sought. Were the respondents to alienate all their assets, the petitioner would unquestionably be subjected to irreparable prejudice. The balance of convenience would also, therefore, justify grant of an ad interim injunction at present, awaiting the response of the respondents."

12. Accordingly, issue notice, returnable on 7th May, 2021.

13. Counter affidavit, if any, be filed within a period of four weeks from O.M.P.(I) (COMM.) 28/2021 Page 3 of 8 today with advance copy to learned counsel for the petitioner, who may file rejoinder thereto, if any, within a period of two weeks thereof.

14. Till the next date of hearing, there shall be restraint on creation of any third party interests in respect of the eight properties, enumerated in para 9 (supra)."

3. Respondent in its reply contends that properties listed in para 9 of the order extracted above, had been mortgaged in favour of Union Bank of India ('UBI'), much before the order of injunction. The details as given in the reply are as follows:

It is also contended that the afore-noted fact was in the knowledge of the Petitioner, yet a disclosure thereof was not made before this Court at the time of the filing of the petition. Counsel for the Petitioner controverts the said allegation and submits that in the affidavit of assets filed at the time of sanction of the loan, Respondent did not give any such information. Be that as it may, the Court need not delve into this question. Nevertheless, taking note of the fact that the properties referred above have been given as securities to UBI, it is clarified that the injunction order dated 4th February, 2021 will only bind the Respondents. The said order would however not affect the rights, if any, of the mortgagee i.e., UBI. It would not preclude UBI from taking recourse to the said properties in exercise of their right, if any, in accordance with law.

4. Counsel for the Petitioner argues that as on date the Petitioner has an exposure of more than Rs. 6.5 crores. Taking into consideration that the assets of the Respondent are mortgaged with UBI, the Petitioner would have no means to recover the amount due from the Respondents under the loan agreement in case they were to succeed in arbitration.

5. Today, vide separate order passed in Arb. P. 540/2021, this Court has appointed a Sole Arbitrator to adjudicate the disputes between the parties arising under the Loan Agreement.

6. Now that the Arbitral Tribunal stands constituted, in the opinion of the Court, parties should take recourse to Section 17 of the Act for interim reliefs/measures.

7. In view of the above, at this stage, the Court considers it appropriate to direct the Respondent to file within four weeks, affidavits disclosing their movable and immovable assets. The said affidavits shall be placed on record before the learned Arbitrator. Further, the order dated 4th February, 2021 as modified hereinabove is confirmed and shall continue to operate till such time the learned Arbitrator enters upon reference and decides the application under Section 17 of the Act, if so filed. In case such an application is not filed within two weeks from the date the learned Arbitrator enters upon reference, the order passed today shall cease to operate. It is also clarified that observations made by this Court in the order passed today as well as in the order dated 4th February, 2021 are prima facie in nature and shall not influence the learned Arbitrator.

8. All the rights and contentions of the parties are left open.

9. Accordingly, the petition and the pending applications stand disposed of.

SANJEEV NARULA, J AUGUST 13, 2021 v O.M.P.(I) (COMM.) 28/2021 Page 7 of 8 O.M.P.(I) (COMM.) 28/2021 Page 8 of 8