Delhi District Court
Citifinancial Consumer Finance India ... vs Mrs. N.Tulsi on 21 August, 2008
//1//
IN THE COURT OF SH. DAYA PRAKASH
ADDITIONAL DISTRICT JUDGE: DELHI
Suit No. : 148/06
Citifinancial Consumer Finance India Ltd.
Registered office at :
3, Local Shopping Centre
Pushp Vihar
New Delhi-110 062.
...Petitioner
VERSUS
1. Mrs. N.Tulsi
W/o. Mr.B.G.Dwarka Nath
No.37/B, 6th Temple Road
15th Cross Malleswaram
Bangalore-560 003.
Alternate Address :
C/o. National Sample Survey Organisation
Kendriya Sadan, Kormangla
Bangalore-560 003.
2. Mr.B.G.Dwarka Nath
S/o. Late B.R.Gopinath Rao
No.37/B, 6th Temple Road
15th Cross Malleswaram
Bangalore-560 003.
Alternate Address :
C/o. BEML
Bangalore Complex
New Tippasandra Post
Bangalore.
...Respondents
Date of Institution of the Petition: 10.10.2006
Date on which the judgment has been reserved: 21.08.08
Date of delivery of judgment: 21.08.08
PETITION U/S.9 OF THE ARBITRATION
& CONCILLIATION ACT, 1996 R/W.SECTION 151 CPC
1/8
//2//
JUDGMENT
1. By this judgment I shall dispose of the petition filed by the petitioner company u/s.9 of the Arbitration & Conciliation Act, 1996.
2. In the petition it is stated that petitioner company was originally incorporated under the name of M/s.Avco Financial Services India Pvt. Ltd. and was then changed to M/s.Associates India Financial Services Limited and now it has been changed to M/s. Citifinancial Consumer Finance India Ltd. w.e.f. 15.03.2004. It is submitted that the petitioner company is engaged in the business of providing loans. It is further submitted that the present petition is filed by duly authorised officer Sh.Kabir Sharma who is fully conversant with the facts of the case and is authorised vide Power of Attorney dt.01.08.2006. It is stated that the respondents approached petitioner company for obtaining loan and at the instance and request of respondents the petitioner sanctioned a Term Loan of Rs.6 Lacs to the respondents and accordingly a written Loan Agreement dt.20.06.2002 was executed between the petitioner and the respondents. It is submitted that in consideration of the grant of Term Loan Facility and with a 2/8 //3// view to secure the repayment thereof the respondents created an equitable mortgage of their immovable property i.e. no.37/3, Old No.11/5, Malikajunapura, 6th Temple Road, 15th Cross, Malleswaram, Bangalore by deposit of the original title deeds of the said property. It is submitted that the respondents had also executed a Memorandum of Entry, Irrevocable Power of Attorney authorising the petitioner to sell, transfer and/or alienate the mortgaged property, Deed of Declaration, Deed of Undertaking and Demand Promissory Note dt.20.06.2002 for a sum of Rs.6 Lacs with interest thereon @15% per annum or at the rate which may from time to time be assigned by the petitioner to secure the repayment of the Term Loan Facility. It is submitted that all the documents were duly filled up when they were signed by the respondents who had read and understood the same before the same were signed and copy of the documents were given to the respondents. It is submitted that as per the agreement, the respondents were liable to pay 96 monthly installments of Rs.10,768/-each. It is submitted that the respondents failed to maintain the financial discipline under the said agreement and have defaulted in the payment of monthly installments. Petitioner vide legal notice bearing reference no.N-3328 dt.18.10.2005 and terminated the 3/8 //4// said agreement and recalled the entire loan amount and called upon the respondents to pay a sum of Rs.5,18,453.41 as on 14.10.2005 alongwith interest thereon. However, the respondents despite receipt of the notice failed to comply with the same.
It is submitted that respondents failed to clear the outstanding amount despite repeated requests and reminders and as per clause XXVI of the agreement any controversy or dispute arises between the parties shall refer to arbitration and accordingly the matter was referred to arbitration, Ld. Arbitrator was appointed and arbitration proceedings have been commenced and now pending adjudication before the Ld.Sole Arbitrator. It is submitted that now the petitioner company has come to know through reliable sources that the respondents are dishonestly trying to sell, transfer, dispose off, create third party interest in the mortgaged property with a view to frustrate the claim of the petitioner and also to defraud and cheat the petitioner company and frustrate the Award that may eventually be passed. It is submitted that petitioner would suffer irreparable loss and injury in case the respondents succeed in selling, transferring, disposing or creating third party interest in the mortgaged property. 4/8
//5// It is submitted that the cause of action arose in favour of the petitioner and against the respondents and the Courts at Delhi have jurisdiction to adjudicate the present matter as per the terms and conditions of the said agreement.
Accordingly petitioner seeks the following relief's:
a) restraining the respondents from selling, transferring, disposing, letting out, hypothecating, alienating, creating any third party interest or otherwise parting with the possession of the mortgaged property bearing no. 37/3, Old No.11/5, Malikajunapura, 6th Temple Road, 15th Cross, Malleswaram, Bangalore;
b) attaching the mortgaged property bearing no.
37/3, Old No.11/5, Malikajunapura, 6th Temple Road, 15th Cross, Malleswaram, Bangalore;
c) directing the respondents to deposit a sum of Rs.5,18,153.41 with the Hon'ble Court or furnish a bank guarantee for the said amount to secure the amount in dispute in the arbitration;
d) appointing Sh.Manpreet Singh, the officer of the petitioner company as a Receiver to take possession of the mortgaged property i.e.no. 37/3, Old No.11/5, Malikajunapura, 6th Temple Road, 15th Cross, Malleswaram, Bangalore for the protection and preservation of the mortgaged property.
3. Notice of the petition was served on both the respondents but despite the service of the notice respondents failed to appear before this court.
4. Arguments heard. Advocate of petitioner also filed 5/8 //6// written submissions wherein it is stated that it would cause irretrievable loss, injustice and damage to the petitioner if the respondents are allowed to sell, transfer, alienate, hypothecate or otherwise dispose off the mortgaged property. It is further stated that petitioner company has a strong prima facie case in its favour as the respondents have violated the terms and conditions of the said agreement. It is further stated that the balance of convenience is also heavily in favour of the petitioner and against the respondents as the respondents have neglected and failed to clear their outstanding towards the petitioner. Accordingly, it is prayed by the petitioner that the present petition be allowed.
5. Keeping in view the petition, written arguments and documents on record, I feel that petition of the petitioner u/s.9 of Arbitration & Conciliation Act, 1996 be partly allowed on the following grounds:-
firstly, it is a fact that at the time of filing of the petition, arbitration proceedings were not completed. However, during the pendency of the petition, it is informed that Ld.Arbitrator has given his Award dt.20.10.2006 allowing the claim of the petitioner against the respondents. 6/8
//7// Secondly, it is a fact that suit property is situated outside Delhi i.e. in Bangalore. U/s.16 CPC usually the judicial proceedings should be started at the place where immovable property is situated. However position with respect to Arbitration & Conciliation Act, 1996 is different where it is law that once the arbitration proceedings have been started at a jurisdiction, the Courts at that jurisdiction alone shall have power to deal all aspects and disputes between the parties. In the present case arbitration proceedings were started at Delhi and concluded at Delhi. Hence, Courts at Delhi will have jurisdiction to pas interim order.
Thirdly, in interim order which is an order after passing of the Award, has been sought in two forms, one to restrain the defendant from creating third party interest and second for direction of deposit of amount.
So far as deposit of amount is concerned, the Award is decree of a Court and can be enforced by the petitioner. Hence, to that extent the prayer has become infructuous.
Fourthly, so far as prayer for injunction is 7/8 //8// concerned, I feel that same be allowed to protect the interest of the petitioner who has granted loan on security of immovable property to the respondents.
6. In view of above, the petition of the petitioner u/s.9 of Arbitration & Conciliation Act, 1996 partly allowed. The prayer of deposit of amount become infructuous. The prayer of injunction is allowed. The respondents are restrained from selling, transferring, disposing, letting out, hypothecating, alienating, creating any third party interest or otherwise parting with the possession of the mortgaged property bearing no. 37/3, Old No.11/5, Malikajunapura, 6th Temple Road, 15th Cross, Malleswaram, Bangalore.
7. File be consigned to record room.
Announced in open Court DAYA PRAKASH today on dated 21.08.2008 ADDITIONAL DISTRICT JUDGE DELHI 8/8