TaxTMI 
TaxTMI 
2013 (2) TMI 835
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....rder. Some of the facts emerging from the pleadings filed in ARBP No. 1321/2012 are as under: By orders dated 24th February, 2012 and 12th March, 2012, this court accorded sanction to the scheme of arrangement filed by Tata Capital Limited (TCL) and Tata Capital Financial Services Limited (TCFSL) by virtue of which, the securities and/or benefits, rights and obligations under any security arrangements, collaterals, agreements, instruments of whatsoever nature in connection with or pertaining to or relatable to the transferred financial services activity of TCL stood transferred to TCFSL. On 13th April, 2011, the petitioner sanctioned grant of working capital term loan facility in favour of respondent no. 1 for meeting the working capital requirement of the company of an amount of ` 100,00,00,000 (100 crores) on the terms and conditions recorded therein. The respondents executed various documents in favour of the petitioner to secure the repayment of loan amount. By letter dated 5th April, 2012, the petitioner communicated about the amended fixed rate of interest to the respondents. By letter dated 15th April, 2011, the first respondent requested the petitioner to disbur....
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....ed 22nd August, 2012 (received by petitioner's advocate on 31st August, 2012), informed the petitioner that they were in the process of a strategic transaction which shall significantly mitigate the present risk profile of the first respondent and any precipitate action at that stage, would be value destroyer for one and all. The petitioner was informed that the respondents were nearing a permanent resolution along with the prospective investor which shall give detailed presentation to the CEOs of all their key lenders within the next 15 days including the petitioner. The respondents informed that due to global recession and economic slowdown, the inflow of commercial advertisement revenue got hampered and the revenues fell drastically which was a temporary phenomena. The respondents alleged that temporary slack in business resulted in downgrading by CARE. The market share and the reputation of respondents' clients was still intact and the respondents' clients would strictly adhere to its commitments and assured the petitioner of its amounts as per the agreed terms. The respondents alleged that they had not defaulted to that extent which warranted issuance of the subjec....
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....tion till next date of hearing. The second respondent was directed to maintain status quo in respect of the investments in other entities reflected at page 98 of the petition and continued the ad interim order passed by this court earlier. This court also directed the respondents to comply with ad interim order earlier passed and to file affidavit disclosing the assets within two weeks from the date of the said order. The matter was adjourned to 21st November, 2012 for hearing and final disposal. 8. The respondents have filed affidavit opposing the reliefs claimed by the petitioner however, without disclosing assets and properties owned by the respondents on oath though directed by this court. Facts of ARBP No. 1095 of 2012 9. On 13th May, 2011, the petitioner and the first respondent executed facility agreement by which the petitioner advanced a term loan facility to the tune of ` 25,00,00,000 (25 crores) repayable with interest @ 12% per annum within the period of two years from the elate of execution of the said agreement. On 13th May, 2011, the second respondent executed demand promissory note in favour of the petitioner guaranteeing the repayment of the loan instalmen....
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....r in both these matters and the securities in favour of the petitioner were inadequate and, therefore, with a view to protect such huge claims, directed the respondents to maintain status quo in respect of investments in other entities as reflected in net worth certificate at page no. 98 of ARBP No. 1321/2012 and continued the ad interim order passed by this court earlier. According to the petitioner, they have to recover ` 25,02,61,350 with further interest @ 15% per annum on the said amount from 21st July, 2012 till payment in this petition. 12. Mr. Gaurav Joshi, the learned counsel appearing for the respondents in ARBP No. 1321/2012, submits that the petitioner in the said petition is seeking interim orders in respect to the immovable properties purportedly mortgaged in its favour by the respondents. It is submitted that enforcement of mortgage of immovable property is a claim which is not arbitrable in nature. It is submitted that petitioner cannot invoke arbitration agreement for enforcement of mortgage. The learned counsel placed reliance upon the provisions of Transfer of Property Act, 1882 read with Order 34 of the Code of Civil Procedure, 1908 ('CPC') relating t....
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....dicial authority, in the absence of any restriction in the Act, has necessarily to decide whether, in fact, there is in existence a valid arbitration agreement and whether the dispute that is sought to be raised before it, is covered by the arbitration clause. It is difficult to contemplate that the judicial authority has also to act mechanically or has merely to see the original arbitration agreement produced before it, and mechanically refer the parties to an arbitration. Similarly, Section 9 enables a court, obviously, as defined in the Act, when approached by a party before the commencement of an arbitral proceeding, to grant interim relief as contemplated by the section. When a party seeks an interim relief asserting that there was a dispute liable to be arbitrated upon in terms of the Act, and the opposite party disputes the existence of an arbitration agreement as defined in the Act or raises a plea that the dispute involved was not covered by the arbitration clause, or that the court which was approached had no jurisdiction to pass any order in terms of Section 9 of the Act, that court has necessarily to decide whether it has jurisdiction, whether there is an arbitration ag....
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....ing, will refuse an application under Section 8 of the Act, to refer the parties to arbitration, if the subject matter of the suit is capable of adjudication only by a public forum or the relief claimed can only be granted by a special court or tribunal. 34. The term 'arbitrability' has different meanings in different contexts. The three facets of arbitrability, relating to the jurisdiction of the arbitral tribunal, are as under: (i) Whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes, having regard to their nature could be resolved by a private forum chosen by the parties (the arbitral tribunal) or whether they would exclusively fall within the domain of public fora (courts). (ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes fall under the 'excepted matters' excluded from the purview of the arbitration agreement. (iii) Whether the parties have referred the disputes to arbitration? That is, whether the dispu....
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....the cases referred to above relate to actions in rem. A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. Actions in personam refer to actions determining the rights and interests of the parties themselves in the subject matter of the case, whereas actions in rem refer to actions determining the title to property and the rights of the parties, not merely among themselves but also against all persons at any time claiming an interest in that property. Correspondingly, judgment in personam refers to a judgment against a person as distinguished from a judgment against a thing, right or status and judgment in rem refers to a judgment that determines the status or condition of property which operates directly on the property itself. [Vide Black's Law Dictionary.] 38. Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration; and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or....
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....omatic that 'real' rights, that is rights which are valid as against the whole world, cannot be the subject of private arbitration, although some acknowledge that subordinate rights in personam derived from the real rights may be ruled upon by arbitrators. The conventional view is thus that, for example, rights under a patent licence may be arbitrated, but the validity of the underlying patent may not.....An arbitrator whose powers are derived from a private agreement between A and B plainly has no jurisdiction to bind anyone else by a decision on whether a patent is valid, for no one else has mandated him to make such a decision, and a decision which attempted to do so would be useless. (Emphasis supplied) 45. In Chiranjilal Srilal Goenka vs. Jasjit Singh and others, (1993) 2 SCC 507 : 1993 (1) Arb. LR 443 (SC) this court held that grant of probate is a judgment in rem and is conclusive and binding not only on the parties but also the entire world; and therefore, courts alone will have exclusive jurisdiction to grant probate and an arbitral tribunal will not have jurisdiction even if consented by the parties to adjudicate upon the proof or validity of the....
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....n interest in the mortgage security or right or redemption can, therefore, make an application for being impleaded in a mortgage suit, and is entitled to be made a party. But if a mortgage suit is referred to arbitration, a person who is not a party to the arbitration agreement, but having an interest in the mortgaged property or right of redemption, cannot get himself impleaded as a party to the arbitration proceedings, nor get his claim dealt with in the arbitration proceedings relating to a dispute between the parties to the arbitration, thereby defeating the scheme relating to mortgages in the Transfer of Property Act and the Code. It will also lead to multiplicity of proceedings with likelihood of divergent results. 48.2. In passing a preliminary decree and final decree, the court adjudicates, adjusts and safeguards the interests not only of the mortgagor and mortgagee but also puisne/mesne mortgagees, persons entitled to equity of redemption, persons having an interest in the mortgaged property, auction purchasers, persons in possession. An arbitral tribunal will not be able to do so. 48.3. The court can direct that an account be taken of what is due to the ....
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....ourt to entertain and adjudicate upon rights and liabilities of third parries (other than those who are parties to the arbitration agreement). Therefore, a suit for sale, foreclosure or redemption of a mortgaged property, should only be tried by a public forum, and not by an arbitral tribunal. Consequently, it follows that the court where the mortgage suit is pending, should not refer the parties to arbitration. 50. The appellant contended that the suit ultimately raises the following core issues, which can be decided by a private forum--(i) Whether there is a valid mortgage or charge in favour of SBI? (ii) What is the amount due to SBI? and (iii) Whether SBI could seek eviction of appellant from the flat, even if it is entitled to enforce the mortgage/charge? It was submitted that merely because mortgage suits involve passing of preliminary decrees and final decrees, they do not get excluded from arbitrable disputes. It is pointed out that the arbitral tribunals can also make interim awards deciding certain aspects of the disputes finally which can be equated to preliminary decrees granted by courts, and the final award made by the arbitrator, after detailed accounting, e....
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....ifferent reasons. 14. Relying upon the judgment of Supreme Court in case of Booz Allen, the learned counsel for the respondents submits that reliefs claimed in the petition filed under Section 9 are for protection of mortgaged properties and thus, in view of the aforesaid judgment, rights claimed by the petitioner are rights in rem which can be decided only by a civil court and not by an arbitral forum and thus, no relief under Section 9 of the Act can be granted by this court 15. Mr. Joshi, the learned counsel then submits that even notice of demand and invoking arbitration clause issued by the petitioner was also for enforcement of mortgage along with other claims. It is submitted that if part of the claim cannot be referred to arbitration and such claim cannot be segregated from other claims, no part of dispute can be referred to arbitration and the same can be decided only by a civil court. It is submitted that jurisdiction of this court invoked, is based on mortgage. It is submitted that if claim for enforcement of mortgaged properties is given up, this court will have no territorial jurisdiction as the instalments were payable at Hyderabad. Respondents are carrying on b....
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.... aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the court to be just and convenient, and the court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. 17. The provision enunciates that the court shall have the same power for making orders as it has for the purpose of and in relation to any proceedings before it. Now it is in this background, that it would be necessary to consider the basic issue raised. The submission of the first respondent is that when a court passes an order providing for an interim measure of protection for securing the amount in dispute in arbitration, the power can be exercised only subject to the restrictions which are spelt out in Order 38 Rule 5 of the Code of Civil Procedure 1908. Order 38 Rule 5 a....
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....een made subject to the stringent provisions of Order 38 Rule 5, the exercise of the power is guided by the paramount consideration that the claimant who obtains an award in his favour before the arbitrator ultimately is able to derive the fruits of the adjudication in executing the award. The Division Bench held as follows (para 10, pages 417-418 of Arb. LR): The order under Section 9(ii)(b) is in the nature of interim protection order. In a special provision of the nature like Section 9(ii)(b), we are afraid, exercise of power cannot be restricted by importing the provisions of Order 38 Rule 5 of the Code of Civil Procedure as it is. The legislature while enacting Section 9(ii)(b) does not seem to us to have intended to read into it the provisions of Order 38 Rule 5 of the Code of Civil Procedure as it is. XXX XXX XXX The provisions of Order 38 Rule 5, CPC cannot be read into the said provision as it is nor can power of the court in passing an order of interim measure under Section 9(ii)(b) be made subject to the stringent provision of Order 38 Rule 5. The power of the court in passing the protection order to secure the amount in dispute in the ar....
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....relevant considerations. In our view, this is the proper approach for consideration of the application for interim relief under Section 9(ii)(b) and we hold that the provisions of Order 38 Rule 5 of the Code of Civil Procedure cannot be read as it is and imported in Section 9 of the Act of 1996. We also hold without hesitation that the court is competent to pass an appropriate protection order of interim measure as provided under Section 9(ii)(b) outside the provisions of Order 38 Rule 5, Code of Civil Procedure. Each case under Section 9(ii)(b) of the Act of 1996 has to be considered in its own facts and circumstances and on the principles of equity, fair play and good conscience. 18. In a subsequent decision of the Supreme Court in Arvind Constructions Co. (P) Ltd. vs. Kalinga Mining Corporation, (2007) 6 SCC 798 : 2007 SCACTC 321 (SC) : 2007 (2) Arb. LR 279 (SC) the Supreme Court held that the power under Section 9 cannot be read as independent of the Specific Relief Act and it could not be contended that the restrictions placed by the Specific Relief Act cannot control the exercise of the power under Section 9. The court observed that while entertaining an application ....
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....on or an interim mandatory injunction are governed by well-known rules and it is difficult to imagine that the legislature while enacting Section 9 of the Act intended to make a provision which was dc hors the accepted principles that governed the grant of an interim injunction. Same is the position regarding the appointment of a receiver since the section itself brings in, the concept of 'just and convenient' while speaking of passing any interim measure of protection. The concluding words of the section, "and the court shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it" also suggest that the normal rules that govern the court in the grant of interim orders is not sought to be jettisoned by the provision. Moreover, when a party is given a right to approach an ordinary court of the country without providing a special procedure or a special set of rules in that behalf, the ordinary rules followed by that court would govern the exercise of power conferred by the Act. 20. The Supreme Court noted that the power to grant injunction by way of specific relief is covered by the Specific Relief Act, 1963, injun....
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....underlying object of Order 38 Rule 5 is to confer upon the court an enabling power to require a defendant to provide security of an extent and value as may be sufficient to satisfy the decree that may be passed in favour of the plaintiff. The exercise of the power to order that security should be furnished is, however, preconditioned by the requirement of the satisfaction of the court that the defendant is about to alienate the property or remove it beyond the limits of the court with an intent to obstruct or delay execution of the decree that may be passed against him. In view of the decisions of the Supreme Court both in Arvind Constructions and Adhunik Steels, it would not be possible to subscribe to the position that the power to grant an interim measure of protection under Section 9(ii)(b) is completely independent of the provisions of the Code of Civil Procedure, 1908 or that the exercise of that power is untrammeled by the Code. The basic principle which emerges from both the judgments of the Supreme Court is that though the Arbitration and Conciliation Act, 1996 is a special statute, Section 9 does not either attach a special condition for the exercise of the power nor does....
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....at while the court held that the basic principles governing the grant of interim injunction would stand attracted to a petition under Section 9, the court was of the view that the power under Section 9 is not totally independent of those principles. In other words, the power which is exercised by the court under Section 9 is guided by the underlying principles which govern the exercise of an analogous power in the Code of Civil Procedure, 1908. The exercise of the power under Section 9 cannot be totally independent of those principles. At the same time, the court when it decides a petition under Section 9 must have due regard to the underlying purpose of the conferment of the power upon the court which is to promote the efficacy of arbitration as a form of dispute resolution. Just as on the one hand the exercise of the power under Section 9 cannot be carried out in an uncharted territory ignoring the basic principles of procedural law contained in the Code of Civil Procedure, 1908, the rigors of every procedural provision in the Code of Civil Procedure, 1908 cannot be put into place to defeat the grant of relief which would sub-serve the paramount interests of justice. A balance ha....
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....a prima facie case. 5. The power under Order 38 Rule 5, CPC is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilise the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs, by obtaining orders of attachment before judgment and forcing the defendants for out of court settlements, under threat of attachment. 6. A defendant is not debarred from dealing with his property merely because a suit is filed or is about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment. A plaintiff should show, prima facie, that his claim is bona fide and valid and also satisfy the court that the defendant is about to remove or dispose of ....
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....rup had received acknowledgement of the representation addressed to the President of India wherein it was also noted that the same had been forwarded to the Secretary to the Government of India, Ministry of Law, Justice and Company Affairs (Department of Legal Affairs) for appropriate action. But no action was taken to look into the allegations. It is not clear from the writ petition as to whether the petitioner had sent any representation to the President and other constitutional functionaries as the enclosures to the writ petition show that aforesaid Ram Sarup had sent representations to the President with copies to the other functionaries. The copy of the representation dated 18.10.2003 shows that it was sent by Ram Sarup. The second representation is dated 13.12.2003 in which reference has been made to a representation purported to be dated 28.11.2003. In the representation dated 13.12.2003 reference is made to the acknowledgement dated 12.11.2003. This creates an impression that the acknowledgement dated 12.11.2003, of the President's Secretariat relates to the representations sent by Ram Sarup. But the copy of purported acknowledgement filed as Annexure P2 shows as if it ....
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....ore the arbitral tribunal. The learned senior counsel submits that it is always open to the petitioner to make a claim either for enforcement of mortgage or for recovery of money simpliciter based on other securities furnished by the respondents. It is submitted that the respondents have presumed that the petitioner would file a claim for enforcement of mortgage before the arbitral tribunal. It is submitted that as statement of claim, which would be filed by the petitioner at appropriate stage before the arbitral tribunal, is not before this court, court cannot refuse to grant interim reliefs based on presumption of the respondents that petitioner would apply for enforcement of mortgage against the respondents before the arbitral tribunal. The learned senior counsel invited my attention to paragraph 12 of the judgment of Supreme Court in case of Booz Allen to demonstrate that the Supreme Court was considering the scope of Section 8 of the Act made in a pending suit. Paragraph 12 (paragraph 7 of Arb. LR) of the said judgment extracts the reliefs claimed in suit filed in the Bombay High Court, which reads thus (at page 168 of Arb. LR): 12. As the loan amount due by RV Applia....
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....rt, such court which is seized of the suit has to decide all aspects of arbitrability and the same cannot be left to the decision of the arbitrator. In that context, it has been held by the Supreme Court that if the subject matter of the suit is capable of adjudication only by a public fora or the relief claimed can only be granted by a special court or tribunal, such court would refuse an application under Section 8 to refer the parties to arbitration. The learned senior counsel submits that the petitioner would not claim for enforcement of mortgaged properties in arbitration. It is submitted that money claim thus, would not be a claim in rem but would be an action in personam which has to be a subject matter of arbitration. The learned senior counsel placed reliance on paragraph 38 of the said judgment and submits that all disputes relating to rights in personam are considered to be amenable to arbitration. The learned senior counsel then submits that a mortgage suit for sale of mortgage property is an action in rem and a suit of mortgage is not a mere suit for money. The learned senior counsel placed reliance upon paragraph 48.1 to paragraph 48.5 of the said judgment and submits....
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....before the arbitral tribunal, it is always open to the claimant to withdraw that claim voluntarily or on an objection, if any, raised by the opponent under Section 16 of the Act. It is submitted that money claim does not come under the purview of judgment of Supreme Court in case of Booz Allen. Submissions of the Petitioners on Interim Measures as Prayed 24. Mr. Tulzapurkar, the learned senior counsel then submits that under Section 9(ii)(b) of the Act, the petitioner is entitled to apply for reliefs securing the amount in dispute in the arbitration irrespective of the property having been mortgaged in favour of the petitioner by the respondent. The learned senior counsel placed reliance upon Section 9(ii)(d) and (e) of the Act in support of his plea that petitioner is entitled to apply for interim injunction or appointment of receiver or such other interim measures or protection as may appear to the court to be just and convenient even if such properties are not subject matter of the dispute in arbitration. It is submitted that for the purposes of interim relief under Section 9(ii)(d) and (e), it is not necessary that such properties shall be subject matter of dispute in arb....
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....o interim measures can be refused by this court based on the submissions made by the respondents that there could not be any split of claim and the entire demand notice and the petition filed under Section 9 was on the premise that the same was for enforcement of mortgaged properties. The learned counsel submits that in addition to the property mortgaged in favour of the petitioner, the respondents have also executed promissory note and the second respondent has given personal guarantee in favour of the petitioner. Petitioner can always apply for enforcement of such security which are not in the nature of mortgage. The learned counsel invited my attention to Prayer Clause (f) of the petition by which, the petitioner prayed for direction against the respondents to furnish the security of whatsoever nature to secure the claim of the petitioner. The learned counsel submits that such relief cannot be refused on the ground that petitioner has also applied for appointment of court receiver in respect of the mortgaged property or that in the notice of demand, the petitioner had called upon the respondents to redeem the mortgage. 28. Insofar as issue of jurisdiction raised by the respon....
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....eged that the claim amount of ` 101 crores was incorrect and such allegation was totally vague and false. It is also contended by the respondents that as the court receiver is already appointed in respect of the properties and an injunction order has already been passed by this court, apprehension of the petitioner is baseless. In paragraph 21 of the said affidavit, it is alleged by the respondents that the first respondent was in process of restructuring its outstanding to various banks and financial institutions. The respondents also pleaded that there is already an injunction against the respondents from withdrawing any amount in cash in the aggregate of ` 5 crores from the bank accounts. The learned counsel invited my attention to paragraph 25 of the said affidavit in which, it is pleaded by the respondents that four bank accounts of the first respondent are already attached. The respondents have admitted that they have other creditors too and the respondents need some means available to them to discharge the dues of such other creditors and to deprive them of such rights, would be highly oppressive and unwarranted. The learned counsel also invited my attention to the averments....
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.... As suit for enforcement of a mortgage being the enforcement of a right in rem, will have to be decided by courts of law and not by arbitral tribunals. Supreme Court, however, after considering Order 34 of CPC held that rights of mortgagees and mortgagors in a mortgage suit are intended to be decided by public fora and, therefore, impliedly barred from being referred to or decided by private fora, i.e. arbitral tribunals. Supreme Court held that while deciding a mortgage suit, court decides and adjudicates not only the interest of the mortgagor and mortgagee but also puisne/mesne mortgagees, persons entitled to equity of redemption, persons having an interest in the mortgaged property, auction purchasers, persons in possession and an arbitral tribunal will not be able to do so. 33. On perusal of judgment of Supreme Court in case of Booz Allen, it is clear that Supreme Court, after considering the prayers in the plaint in a mortgage suit, has held that as the suit was for enforcement of mortgage and was a suit in rem, issue of arbitrability having been raised by the defendant in such suit in the application filed under Section 8 of the Act, such issue of arbitrability has to be d....
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....ide whether to withdraw such claims and/or seek amendment for moulding its reliefs, which would be within the jurisdiction of the arbitral tribunal. In my view, if any such reliefs are claimed which are beyond the jurisdiction of the arbitral tribunal and cannot be adjudicated upon, mechanism under Section 16 is provided by the legislature to raise issue of jurisdiction by the respondents before the arbitral tribunal. On hearing such application under Section 16, an arbitral tribunal can always decide whether any of the claims made by the claimants were within its jurisdiction to adjudicate upon. In my view, proceedings under Section 9 filed in this court by the petitioner for interim measures, cannot be equated with the proceedings filed in a pending suit for referring the parties to arbitration under Section 8 of the Act of 1996. Thus, in my view, reliance placed by the respondents on the judgment of Supreme Court in case of Booz Allen is of no assistance to the respondents while opposing application under Section 9 of the Act of 1996. 34. Perusal of Order 34 Rule 1 of the CPC, 1908 provides that all persons, having an interest either in the mortgaged security or in the right ....
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.... respondents are carrying on business at Hyderabad, this court has no jurisdiction to entertain, try and dispose of the present petition in view of Section 2(1)(e) of the Act of 1996. 38. On perusal of the documents annexed by the petitioner in both the petitions and the averments made in the petitions, it is clear that the loan was advanced from Mumbai, payments of some of the instalments were made by the respondents to the petitioner at Mumbai, promissory notes were executed at Mumbai. Material cause of action, thus, has arisen within the jurisdiction of this court. In my view, this court has thus, jurisdiction to entertain, try and dispose of the present petitions. I am not inclined to accept the submission made by the respondents that if relief in respect of enforcement of mortgage is not pressed, in respect of remaining reliefs, this court does not have jurisdiction to consider such reliefs. 39. The next issue raised by the respondents is that the petitioners have not made out any case for grant of reliefs as claimed in the petitions which are in the nature of attachment before judgment akin to the principles of Order 38 Rule 5 of the CPC of 1908 in the facts of this cas....
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....tioner calling upon the respondents to cure the material adverse effect and the said notice was followed by notice dated 17th August, 2012, by which the respondents were called upon to pay ` 100 crores plus interest. There was no response to the said notices till the said petition was filed by the petitioner. The respondents gave evasive reply to the said notices after filing of this petition and requested the petitioner to continue with the terms of agreement without recalling the loan facility and agreed to honour the commitments as agreed: The respondents, however, contended that it was due to global recession and economic slowdown that the inflow of commercial advertisement revenue got hampered and the revenues fell drastically, which was a temporary phenomena. The respondents informed that they were in process of a strategic transaction which shall significantly mitigate the present risk profile of the respondents and would get-permanent resolution. The respondents requested the petitioner not to initiate precipitate action at that stage. Even in the affidavit-in-reply filed by the respondents, there is no specific denial to the claims made by the petitioner. The respondents h....
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....ppeal. In my view, the petitioner in that arbitration petition also is entitled to reliefs as claimed and satisfies the criteria laid down by the Division Bench of this court in the case of Nimbus Communications. 45. As far as submissions made by the respondents in ARBP No. 1321 of 2012 that the entire proceedings filed by the petitioner are based on newspaper reports, which are not conclusive and no reliance thereon can be placed is concerned, in my view, the record indicates that the proceedings are not filed on the basis of any newspaper reports, but are filed independently and such averments are not disputed by the respondents. *For the reasons recorded aforesaid, I pass the following order: Arbitration Petition No. 1321 of 2012 (a) Respondent no. 1 is directed to furnish security in favour of the petitioner in the sum of ` 101,71,03,644 as on 23rd August, 2012 with further interest at the rate of 3% p.a. over and above the agreed rate from 24th August, 2012 and other expenses, costs and charges, etc. to the satisfaction of the Court Receiver, High Court, Bombay, within four weeks from today, failing which, (b) the Court Receiver, High Court, Bomba....