Tata Capital Limited v. Jay Enterprises

Shephali

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION INTERIM APPLICATION NO. 1032 OF 2024 IN COMMERCIAL ARBITRATION PETITION NO. 604 OF 2021 Tata Capital Financial Services Limited ...Applicant

IN THE MATTER BETWEEN

Tata Capital Financial Services Limited

...Petitioner

Versus

Jay Enterprises & Ors

...Respondents

SHEPHALI SANJAY MORMARE SHEPHALI SANJAY MORMARE Date: 2024.10.09 09:30:33 +0530 Mr Ziyad Madon, with Pooja Jhaveri, i/b Katariya & Associates, for the Applicant/Petitioner.

Mr ES D'Souza, Senior Officer, Court Officer, present.

CORAM:

ARIF S. DOCTOR, J DATED:

1st October 2024 PC:- 1.

The present Interim Application has been filed seeking the following reliefs:

"(a) that this Hon'ble Court be pleased to permit the Petitioner to conduct a sale of the movable assets of Respondent No. 1 as set out at Exhibit "L" hereto by way of private treaty or a public auction, and deposit the sale

proceeds thereof with the Prothonotary and Senior Master of this Hon'ble Court."

2.

Mr Madon, Learned Counsel appearing on behalf of the Applicant/Petitioner tenders a draft amendment, which is formal in nature. It is taken on record and marked "X" for identification with today's date.

3.

Amendment to be carried out on or before 14th October 2024 without need of reverification.

4.

Mr Madon, Learned Counsel appearing on behalf of the Applicant/Petitioner submits that the Applicant/Petitioner is a Non Banking Financial Institution had lent in advance certain sums to the Respondent. He points out that Respondent No. 1 is a partnership firm of whom Respondents No. 3 are the partners who had also guaranteed repayment of the loan in their personal and individual capacity. He submits that Respondent No. 4 is the Court Receiver, who had appointed in respect of the various movable assets which had been hypothecated to the Petitioner in view of the said facility is granted and who was appointed as a Receiver in respect of the same under an order dated 6th June 2022.

5.

Mr Madon invites my attention to the order dated 6th June 2022 and points out that the same granted interim relief to the Petitioner by appointing the Court Receiver in respect of the hypothecated assets which were more particularly set out in the Hypothecation Agreement. Mr Madon points out that pursuant to the said order, the Court Receiver has taken symbolic possession of the said hypothecated assets

but has since called upon the Petitioners to make the necessary arrangements for storing and guarding the said hypothecated assets. Mr Madon points out that given the value of the hypothecated assets was only in the region of Rs. 7 lakhs, the Petitioners on enquiry learnt that it would costs approximately Rs. 80,000/- to Rs. 1 lakh for the initial transportation cost etc. and further Rs. 15,000/- to Rs. 20,000/- per month for storing of the same. it was thus he submitted that the Petitioners had filed the present Interim Application seeking the aforesaid relief. He then submitted that the Respondents though served were not today appearing.

He then submitted that the Respondents could not have any objection to the Petitioner selling the hypothecated assets since the said hypothecated assets would have been sold by the Respondents in their usual course of business. He also pointed out that there was no dispute that there were defaults on the part of the Respondents and under the Agreements entered into between the parties. The Petitioner had right to sale the hypothecated assets. It was thus that he submitted that no useful purpose would be served in storing the said hypothecated assets.

He submitted that if the same were permitted to be sold, the sale proceeds would be deposited with the Prothonotary & Senior Master of this Court and would be subject to adjustments pending the final hearing and disposal of the arbitration proceedings which had now commenced between the parties. 6.

Having heard Learned Counsel, I find that there is merit in the submission of Mr Madon. Today, there is no dispute that the Applicant/Petitioner is entitled to proceed against the hypothecated assets in view of the Agreements executed between the parties.

7.

In any view of he matter, the Respondents though served have not appeared I find that it would be of no use to incur costs of assets which would deteriorated/decreased in value. No prejudice can be also caused to the Respondents in the event the said assets are sole and the money is deposited with the Prothonotary & Senior Master and, thereafter, invested by the Prothonotary & Senior Master as per the usual practice of that office 8.

Hence, for the aforesaid reasons, I allow the present Interim Application in terms of prayer clause (a), already extracted above. 9.

The Applicant/Petitioner to file Affidavit of Service on or before 14th October 2024.

(ARIF S. DOCTOR, J)