Bombay High Court
Iifl Finance Ltd. (Erstwhile India ... vs Shrenik Dhirajmal Siroya on 18 February, 2021
Author: G. S. Patel
Bench: G.S. Patel
20-CARBPL8385-2020.DOC
Atul
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO. 8385 OF 2020
IIFL Finance Ltd (erstwhile India Infoline ...Petitioner
Finance Ltd)
Versus
Shrenik Dhirajmal Siroya ...Respondent
Dr Birendra Saraf,Senior Advocate, with Sidharth Ratho & Vinamra Kopariha, i/b Cyril Amarchand Mangaldas, for the Petitioner.
Ms Prachi K, i/b MP Vashi & Associates, for the Respondent.
CORAM: G.S. PATEL, J
DATED: 18th February 2021
PC:-
Digitally signed
by Atul G.
Atul G. Kulkarni
Kulkarni Date:
1. Respondent in Commercial Arbitration Petition (L) No. 8385 2021.02.20 10:45:26 +0530 of 2020 is taking this litigation altogether too casually. It seems to think that Court litigation will dance attendance on his personal preferences, travel plans and other unrelated matters. He is entirely wrong. These are commercial disputes and they will be attended to in a commercially efcient manner.
2. On 11th December 2020 I directed the fling of replies and rejoinders. A reply was to be fled by 8th January 2021.
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3. It was not.
4. The matter was to be listed on 20th January 2021. For some reason, perhaps inadvertent, it was not listed on that day. It was then listed on 11th February 2021. By now, over a month had passed since the original deadline for fling the reply and two months since the Petition was frst moved. Yet there was no reply. Mr Vashi appeared on that day and sought an adjournment. I granted it until today. I know the reason that was given to me on that day, but since it is not noted in the order of 11th February 2021, I will not state it here.
5. What I am told now is that an Afdavit in Reply is 'ready', but has not been afrmed. How this constitutes an Afdavit 'being ready' is incomprehensible. Unless permitted by a Court an un- afrmed Afdavit is worthless. Even if it is or was ready, a minimal courtesy would have been to send at least an unafrmed advance copy to the Advocate for the Petitioners. Even that has not been done. The attempt is clearly to delay the matter by any means possible. For, I am told that Siroya is 'out of town'. He has chosen to travel to Rajasthan for reasons or purposes unspecifed. I could not care less why he has chosen to be away and has not found time to afrm an Afdavit. That is his lookout. He must now face the consequences of this approach. Just to recap: it is now over two months since the Petition was frst moved and a month and half after the initial time of four weeks given to him to fle a reply. If this is Mr Siroya's approach, then he must take the consequences.
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6. Dr Saraf presses his application. I see no reason to adjourn the matter. The Petitioner is a NBFC. It sanctioned a term loan of Rs.45 crores to a partnership frm called M/s Siroya Developers under an agreement of 27th September 2017. The present Respondent, Shrenik Siroya, executed a deed of personal guarantee of the same date. A copy of this guarantee is at page 243. Clause XIV provides a reference to arbitration in Delhi or such other place as may be decided by the Petitioner, but the same clause also says that this will not prejudice the Petitioner's right to have recourse to any Court with jurisdiction to obtain an interim order. The Respondent is very much in Mumbai and the Petition says that the frm carries on business in Mumbai. Further the loan itself was secured by mortgages of land and fats, all in Mumbai.
7. There is no substance to the jurisdictional objection in this view of the matter.
8. The next submission taken is that the guarantee is signed by the Respondent only "for Siroya Developers" and has not been signed by Siroya personally. Siroya has only signed as the borrower not as a co-borrower. It is true that there is a rubber stamp on every page, including the last page, of Siroya Developers. Shrenik Siroya is described on the rubber stamp as a partner. Prima facie, this is of no avail to the Respondent. It is impossible to accept the submission that the borrower Siroya Developers would have been its own guarantor in this fashion. In fact, at page 251 is the schedule to the deed of guarantee. In a handwritten endorsement, this only mentions Shrenik Siroya, not the frm. Below that, under the caption or heading "constitution", there is a description of Siroya as Page 3 of 5 18th February 2021 20-CARBPL8385-2020.DOC "proprietor/individual". This is "the party" referred to at the head of the document at page 243. In fact, the opening line of guarantee makes a specifc reference to the schedule at page 251. The fact that Siroya has at the foot of each page put a rubber stamp is, therefore, prima facie of total irrelevance. The same stamp seems to appear throughout. At no point in the correspondence prior to the Petition has Siroya denied the personal guarantee.
9. The Petition proceeds on the footing that the loan to Siroya Developers was inter alia secured by the personal guarantee. The Petitioner invoked it on 6th October 2020 to pay within three days the amount outstanding. The other details are not necessary at this stage and will be examined once Mr Siroya has found the time, energy and inclination to show some deference to this Court's orders and to fle and serve a properly afrmed Afdavit. Until then, there is no escaping the prima facie view that there is a liability of the principal borrower and that Siroya has stood personal guarantee for it.
10. A limited ad-interim order is thus now necessary. There is a sufcient prima facie case and the balance of convenience is with the Petitioners. The debt can hardly be disputed. There is no question of a Section 9 order being fettered by the provisions of Order 38 Rule 5 of the Code of Civil Procedure, 1908. This law is now too well-settled to admit of any dispute.1 1 See: Essar House Pvt Ltd v Arcellor Mittal Nippon Steel India Ltd, 2021 SCC OnLine Bom 149; Valentine Maritime Ltd v Kreuz Subsea Pte Ltd & Anr, 2021 SCC OnLine Bom 75; Jagdish Ahuja & Anr v Cupino Ltd, 2020 SCC OnLine Bom 849.
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11. Mr Shrenik Siroya will make a disclosure of all his assets, properties and bank accounts as required in prayer clause (b). He is to do so before 8th March 2021. Whether he wants to include this in his 'ready' -- but unready -- Afdavit is up to him. He may fle an additional afdavit if he so chooses.
12. There will also be an ad-interim injunction in terms of prayer clause (c) restraining the Respondent from directly or indirectly alienating, transferring or creating any third party rights or encumbrances in respect of any of his assets or properties including his bank accounts, except in the ordinary and usual course of business; and if sought to be done otherwise, without prior leave of the Court obtained after at least four days' prior written notice to the Advocates for the Petitioners. It is clarifed that this is not an absolute injunction but is restricted in the manner indicated above.
13. This order will continue until the next date or the fling of the Afdavits whichever is later.
14. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on production of a digitally signed copy of this order.
(G. S. PATEL, J) Page 5 of 5 18th February 2021