Madras High Court
M/S.Electronica Finance Ltd vs Hi-Esteem Auto Komponents Private ... on 7 October, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Arbitration Application No.907 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 07.10.2025
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
Arbitration Application No.907 of 2025
M/s.Electronica Finance Ltd.,
represented by its Deputy Manager
and Power Agent - Karthik.E,
Registered office at Audumbar,
101/1, De.Ketkar Road,
Erandwane, Pune,
Maharashtra - 411 004.
Having branch office at
No.1167, T.V.S.Colony,
Anna Nagar, West Extension,
Chennai - 600 101. .... Applicant
Vs.
1.Hi-Esteem Auto Komponents Private Limtied,
Survey No.88/1, 88/2,
Mettupalayam Main Road, Panruti Village,
Sriperumbulur Taluk,
Kanchipuram, Tamil Nadu,
North Arcot 631 604.
2.Revathy Vuppuluri Sivanandan
3.Janakiraman Krishnamoorthy
4.Ramanathan Venkataramani
5.V Saraswathi Raghavan
6.Nitharshan Janakiraman .... Respondents
PRAYER
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Arbitration Application No.907 of 2025
Arbitration Application filed under Order XIV Rule 8
O.S.Rules r/w Section 9(1)(ii)(a)(d) of the Arbitration and Conciliation
Act, 1996, praying to pass an order of appointment of an Advocate
Commissioner to seize and deliver the machineries morefully described
in the schedule herein available at the respondent premises or wherever
found and with whomsoever it is found and entrust the custody of the
same to the applicant and permit the Advocate Commissioner to obtain
police aid and to break open the premises.
For Applicant : Mr.Adeesh.C.P.
for Mr.R.Rajesh
For Respondent : Mr.S.M.Deenadayalan [R1]
*****
ORDER
This application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity 'the Act') for appointment of an Advocate Commissioner to seize and deliver the machineries from the respondents, if required with police aid.
2. This application came up for hearing on 14.07.2025 and this Court passed the following order:
"This application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking for appointment of an Advocate Commissioner to seize and deliver the machineries more fully described in the schedule to the judges summons or wherever they are available.2/10
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2. The applicant is a Non Banking Financial Institution. The applicant has lent money to the respondents under the Loan-cum-Hypothecation Agreement, dated 06.02.2023. The respondents had availed loan from the applicant for the purchase of machineries morefully described in the schedule to the Judges Summons.
3. The respondents are defaulters in the repayment of the loan to the applicant. Supporting documents have been filed by the applicant to substantiate the same. As on date, the respondents are in arrears of six(6) installments, which works out to Rs.13,81,616/-. The applicant has also recalled the loan granted to the respondents through their loan recall notice dated 26.12.2023. As seen from the Statement of Account, a sum of Rs.44,66,743/- is due and payable by the respondents to the applicant, which includes future installments, arrears of installments, penal interest and other charges payable as per the terms and conditions of the contract. The applicant is empowered to repossess the machineries from the respondents, as per the terms of the said loan agreement, in case, they commit default in the repayment of the loan. The applicant claims that they are having difficulty in repossessing the machineries on their own. Only under those circumstances, they have filed this application seeking for appointment of an Advocate Commissioner to repossess the machineries from the respondents or wherever available. The Loan-cum-Hypothecation Agreement, dated 06.02.2023 contains an arbitration clause. The applicant has expressed its willingness to go for arbitration in accordance with the arbitration clause.
4. This Court is of the considered view that a prima facie case has been made out by the applicant for appointment of an Advocate Commissioner. Once the machineries are repossessed by the Advocate Commissioner, to enable the respondents to use the machineries once again, they must be put on terms for getting back the machineries from the applicant after re-possession. In order to strike a balance, the following order is passed by this Court:
a) Mr.B.Santhosh Raj, Advocate, having office at New No.336, Old No.166, 3rd Floor, Thambu Chetty Street, Chennai-600001, Mobile No.8667344799/ 9710232663, is appointed as the Advocate Commissioner to re-posses the machineries morefully described in the schedule to the 3/10 https://www.mhc.tn.gov.in/judis ( Uploaded on: 09/10/2025 12:35:21 pm ) Arbitration Application No.907 of 2025 Judges Summons from the respondents or wherever they are available;
b) The Advocate Commissioner is permitted to obtain the police aid whenever required and he/she is also permitted to break open the premises in case the machineries are kept in a locked premises in the presence of the police after taking proper inventory.
c) On repossession of the subject machineries, the Advocate Commissioner shall send a Communication to the respondents intimating that a sum of Rs.13,81,616/- is due and payable by the respondents to the applicant in respect of the aforesaid loan agreement.
d) On receipt of such intimation, the respondents shall pay the aforesaid amount within a period of three days from the date of receipt of the communication from the Advocate Commissioner and on payment of such sum, the applicant shall hand over the machineries back to the respondents and the Advocate Commissioner shall co- operate with the applicant for the same.
e) The applicant shall initiate arbitration in accordance with the arbitration agreement contained in the contract within a period of 90 days from the date of receipt of a copy of this order. In case, the applicant fails to initiate arbitration within the stipulated time, the order passed by this Court today shall stand automatically vacated and the re-
possessed machineries shall also be redelivered back to the respondents by the applicant unconditionally;
f) The Advocate Commissioner shall be paid an initial remuneration of Rs.25,000/- by the applicant, within a period of one week from the date of receipt of a copy of this order. All the boarding, lodging and travelling expenses for the Advocate Commissioner shall be borne by the applicant.
5. Notice to the respondents, returnable by 07.08.2025. Private notice is also permitted.
Post the matter on 07.08.2025."
3. Pursuant to the above order, the Advocate Commissioner appointed by this Court was able to seize three machineries, which were 4/10 https://www.mhc.tn.gov.in/judis ( Uploaded on: 09/10/2025 12:35:21 pm ) Arbitration Application No.907 of 2025 also handed over to the applicant. Recording the same, the following order came to be passed by this Court on 03.09.2025:
"When the matter was taken up for hearing today, the learned Advocate Commissioner filed the report. On going through the same, it is seen that three machineries have been seized and handed over to the applicant. It is further stated that the condition imposed by this Court in Paragraph No.4 (c) was complied with by the respondent by sending a demand draft for a sum of Rs.13,81,616/-. The copy of the same has also been annexed along with the report of the Advocate Commissioner.
2. The learned counsel for Applicant seeks for some time to take instructions and to ascertain as to whether the amount of Rs.13,81,616/- has been paid. The learned counsel also wants to take instructions as to the total amount that is due and payable by the respondent as on today.
3. The learned counsel for applicant shall also take instructions from their client to ensure that if the machineries are returned back to the respondents, the same will be kept intact without being encumbered / alienated.
4. A memo has been filed by the Advocate Commissioner seeking for additional remuneration. Considering the memo, there shall be a direction to the applicant to pay additional remuneration of Rs.15,000/- to the Advocate Commissioner.
5. Post this case under the caption for orders on 10.09.2025."
4. The matter was once again taken up for hearing on 10.09.2025 and after hearing both sides, this Court passed the following order:
5/10https://www.mhc.tn.gov.in/judis ( Uploaded on: 09/10/2025 12:35:21 pm ) Arbitration Application No.907 of 2025 "When the matter was taken up for hearing today, the learned counsel appearing for the applicant confirmed the fact that the respondents had sent a Demand Draft for a sum of Rs.13,81,616/- and the said Demand Draft is yet to be encashed. The learned counsel appearing for the applicant further submitted that only three machineries were able to be seized by the Advocate Commissioner. The applicant is not aware as to number of the machineries that are now available with the respondents. Therefore, the learned counsel requested this Court to direct the respondents to file an affidavit by giving the particulars of the machineries available and its location and also to undertake not to alienate/encumber those machineries. The learned counsel further submitted that if in the event of this Court directing the applicant to return back the three machineries that have been seized, the respondents may be directed to give a similar undertaking that they will not alienate or encumber the machineries.
2. The learned counsel appearing for the first respondent submitted that an affidavit of undertaking will be filed before this Court during the next date of hearing.
3. There shall be a direction to the respondents to file an affidavit of undertaking to the following effect:
(a) the particulars of machineries that are available with the respondents and the location in which it is available;
(b) an undertaking that those machineries will not be sold/alienated/encumbered till the dispute between the applicant and the respondents is resolved either amicably or through arbitration process;
(c) if in the event of this Court directing the return of three machineries that have been seized, the location in which those three machineries will be kept by the respondents;
(d) an undertaking that those three machineries will not be sold/alienated/encumbered till the dispute between the applicant and the respondents is resolved either amicably or through arbitration process.
4. The undertaking affidavit shall be filed before the next date of hearing and if the undertaking affidavit fulfills all the above requirements, final orders will be passed in this application.
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5. Post this application under the same caption on 22.09.2025."
5. When the matter was taken up for hearing today, as per the directions issued by this Court, the respondents have filed an affidavit and the relevant portions are extracted hereunder:
"3. I state that vide Order dated 10/09/2025 in Arbitration Application No.907 of 2025 this Hon'ble Court was pleased to direct the first respondent to file an affidavit of undertaking before this Hon'ble Court to the following effect:-
(a) the particulars of machineries that are available with the respondents and the location in which it is available"-
i. 1 No. of Used 250 Tonne Cross Shaft Press in dismantled condition;
ii. 1 No. of Used 300 Tonne Cross Shaft Press in dismantled condition;
iii. 1 No. of Used 200 Tonne Cross Shaft Press in dismantled condition;
iv. Used 250 Tonne Cross Shaft Press in dismantled condition; v. Used 250 Tonne Cross Shaft Press in dismantled condition; I state that the above machineries are available in dismantled condition in a rented premises situated at GD Tech, PVJ Nagar, Vanagaram Road, Ambattur, Chennai - 600 058.
(b) I undertake that the above mentioned machineries which are in dismantled condition will not be sold/alienated/encumbered till the dispute between the applicant and the respondents is resolved either amicably or through arbitration process;
(c) I state that if in the event of this Court directing the return of three machineries that have been seized, the said three machineries will be kept by the respondents GD Tech, PVJ Nagar, Vanagaram Road, Ambattur, Chennai - 600 058;
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(d) I also undertake that those three machineries also will not be sold/ alienated/encumbered till the dispute between the applicant and the respondents is resolved either amicably or through arbitration process."
6. Learned counsel for the applicant submitted that during the pendency of this application, the trigger notice dated 20.09.2025 under Section 21 of the Act was issued to the respondent and the copy of the same was also placed before this Court.
7. This Court carefully considered the submissions made on either side and the materials available on record.
8. The entire dispute between the parties narrows down to the total amount that is due and payable by the respondents to the applicant.
As per the claim made by the applicant, the total amount that is due and payable by the respondents is to the tune of Rs.19,40,741/- as on 05.03.2025. On the other hand, the respondents are making a counter claim against the applicant to the tune of Rs.21,66,280/-. The same has been explained in the affidavit filed by the respondents at paragraph No.4.
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9. This Court is inclined to accept the undertaking given by the respondents and record the same in this application. Now that the trigger notice has been issued under Section 21 of the Act, this Court sought for the consent of both sides in order to appoint an Arbitrator to resolve the dispute between the parties. Both sides agreed for appointment of an Arbitrator by this Court.
10. In the light of the above discussion, the undertaking given by the respondents in the affidavit dated 03.10.2025 is recorded and there shall be a direction to the respondents to strictly comply with the undertaking till the end of the arbitration proceedings.
11. This Court appoints Mr.T.S.Baskaran, Advocate, No.14/1, Kamatchipuram, 1st Street, West Mambalam, Chennai - 600 033 [Mobile No.94442 06622] as the sole Arbitrator and the sole Arbitrator is N.ANAND VENKATESH, J.
gm requested to adjudicate the arbitral disputes that had arisen between the parties and render arbitral award by holding sittings in the 'Madras High Court Arbitration Centre under the aegis of this Court' (MHCAC) as per 9/10 https://www.mhc.tn.gov.in/judis ( Uploaded on: 09/10/2025 12:35:21 pm ) Arbitration Application No.907 of 2025 Madras High Court Arbitration Proceedings Rules 2017 and fee of Hon'ble sole Arbitrator shall be in accordance with the Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.
Accordingly, this application is disposed of.
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