Final Order 8

Order Details: COPY OF ORDER
Pdf Text: DLND010095512025
IN THE COURT OF MS. DEEPALI SHARMA,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
PATIALA HOUSE COURTS, NEW DELHI
OMP (I) (COMM) No. 253/25
CNR No. DLND01-009551-2025
In the matter of:
Aditya Birla Capital LTD.
(Aditya Birla Finance Limited merged with
Aditya Birla Capital Limited)
Having its branch office at :
Plot No. 17, 1st Floor, Vijaya Building,
Barakhamba Road, New Delhi-110001,
Through its Authorised Officer
Mr. Ayush Jhingran,
Email : ayush.jhingran@adityabirlacapital.com
…..... Petitioner
Versus
1. Anil Sharma (“Borrower”),
H.No. 444, Near Kamal Dhaba,
Sector-16B, Vasundhra, Ghaziabad,
Uttar Pradesh-201012.
2. Mrs. Agrata Sharma ("Co-Borrower").
315, Block-E, Inland Everglades,
Apartment, Dasarahalli Main Road,
Kempapura Hebbal, Bangalore,
Karnataka-560024.
3. Mrs. Pushpa Sharma ("Co-Borrower"),
H.No. 444, Near Kamal Dhaba,
Sec-16B, Vasundhra, Ghaziabad,
OMP(I)(COMM.) 253/25 PAGE 1 of 10
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Uttar Pradesh-201012.
4. Mr. Nishant Sharma ("Co-Borrower"),
H.No. 444, Near Kamal Dhaba,
Sec-16B, Vasundhra, Ghaziabad,
Uttar Pradesh-201012.
......Respondents
29.07.2026
Present: Sh. Akshat Nayyak, ld. counsel for petitioner (VC).
Sh. Abhishek, ld. counsel for the respondent nos. 1
to 4 (VC).
Ms. Vanshika Sharma, ld. counsel for proposed
respondent no. 5 (VC).
ORDER
1) Vide this order I shall dispose of the petition under
Section 9 of the Arbitration and Conciliation Act filed by the
petitioner
inter alia seeking ad-interim relief restraining the
respondents from creating third party rights in respect of the
mortgage property or any other assets / properties of the
respondents and also seeking freezing of the bank accounts of
respondent no. 1 to 4 etc.
2) It is stated that the petitioner is an Non-Banking
Financial Company and it is a financial services provider
company in India. It is stated that in pursuance to the order dated
24.03.2025 passed by Hon’ble National Company Lal Tribunal,
Ahmedabad Branch, in CP (CAA)/6(AHM) 2025, Aditya Birla
Finance Ltd. has been amalgamated with Aditya Birla Capital
Ltd. in accordance with scheme of amalgamation dated
OMP(I)(COMM.) 253/25 PAGE 2 of 10
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11.03.2024. It is stated that respondent no. 1 as borrower
alongwith respondent no. 2, 3 & 4 as co-borrowers approached
the petitioner in July 2024 for availing financial facilities in the
nature of loan against property and applied for loan. Upon their
representations, the petitioner sanctioned the loan amount of Rs.
1,01,00,000/- vide sanction letter dated 16.07.2024 which
included an assurance of Rs. 1 Lakh, to the respondents subject
to the terms and conditions mentioned in the facility agreement
dated 25.07.2024. The petitioner also executed the necessary
documents at the time of grant of financial facility, which
included Demand Promissory Note, Letter of Continuity or
Demand Promissory Note, Letter from Borrower Forwarding
Security Cheques, End Use Declaration Format, Cheque
Submission Form and Request Disbursal Letter Dated
25.07.2024.
3) It is stated that for the purpose of securing due
repayment of the financial facilities availed by the respondents,
respondent nos. 3 & 4 created equitable mortgage by way of
deposit of title deeds of immovable property vide a
Memorandum of Entry in favour of petitioner on 28.08.2024 for
the purpose of creating an exclusive mortgage by deposit of title
deeds over the property bearing plot no. 5/797, Ground Floor,
HIG-Double Story, Rachna, Sector-5, Vaishali, Ghaziabad, Uttar
Pradesh-201010 (hereinafter referred to as the “subject
property”).
4) In terms of the financial facility, the petitioner was
required to adhere to the repayment schedule jointly and severely
as agreed to between the parties at the time of sanction of facility.
It is stated that the respondents in violation of the terms and
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condition of the loan agreement and without the knowledge or
consent of the petitioner have illegally transferred the
mortgaged/subject property in favour of on Mrs. Nandani
Sharma, daughter-in-law of respondent no. 1, by way of a gift
deed executed by respondent no. 3. It is stated that it has come to
the knowledge of the petitioner that the tenants in the said
property have started paying rent to Mrs. Nandani Sharma.
5) It is urged that by transferring the mortgaged/subject
property in favour of a third party, without consent or knowledge
of the petitioner, the respondents have frustrated the security
interested created in favour of the petitioner.
6) It is stated that owing to the default and breach of
terms and conditions of the loan agreement by defaulting in
payment of overdue amount, the petitioner was constrained to
issue loan recall notice dated 16.06.2025, however, no response
was received from the respondents. It is stated that the
respondents have no intention to repay the loan facilities and are
avoiding any form of communication with the petitioner. It is
accordingly stated that the respondents are liable to repay the
outstanding dues to the tune of Rs. 1,00,27,569/- as on
05.08.2025 to the petitioner. It is stated that the transfer of the
mortgaged property by the respondents to a third party
demonstrates malafide on the part of respondents to frustrate the
rights of the petitioner. It is urged that the subject property is the
only security against the loan taken by the respondents and
therefore, balance of convenience is in favour of the petitioner
and irreparable loss and injury has been caused to the petitioner
if the interim relief, as prayed, is not granted.
OMP(I)(COMM.) 253/25 PAGE 4 of 10
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7) Subsequently, an application was filed on behalf of
the petitioner under Order I Rule 10 CPC seeking impleadment
of Mrs. Nandani Sharma as respondent no. 5 in the matter as the
subject property had been gifted to her vide a Gift Deed executed
by respondent no. 3 in her favour.
8) Reply has been filed on behalf of Mrs. Nandani
Sharma stating therein that the loan transaction was entered into
between the petitioner and respondent nos. 1 to 4. She was not a
signatory, guarantor, borrower or beneficiary under the loan
agreement, sanction letter, mortgage deed etc. It is urged that no
arbitration agreement exists between the petitioner and Mrs.
Nandani Sharma and therefore, she cannot be made a party to the
present proceedings.
9) It is further stated that she has acquired rights in the
subject property by virtue of a duly executed registered gift deed
dated 27.12.2024 executed by respondent no. 3 Mrs. Pushpa
Sharma in her favour and thereafter she had been regularly
paying the monthly installments/EMIs towards the loan account
maintained with the petitioner, which have been duly accepted by
the petitioner. It is stated that despite accepting the payments
from her, the petitioner has suppressed a material fact and has
failed to show that the respondents had any fraudulent intentions
towards the loan account.
10) Reply to the petition filed by respondents 1 to 4,
wherein it is stated that respondent no. 3 had never transferred
the mortgaged property by way of Gift Deed in favour of Mrs.
Nandani Sharma. It is stated that respondent no. 3 was mislead
by Mrs. Nandani Sharma into signing certain documents under a
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bonafide belief that the said documents pertained to other routine
formalities . It is stated that since Mrs. Nandani Sharma was
daughter-in-law of respondent no. 1 and respondent no. 3,
respondent no. 3 believed her words and signed the documents
without reading them. Subsequently, the said Gift Deed was
unlawfully used by Mrs. Nandani Sharma to declare herself to be
the owner of said property and collect rent and other benefits. It
is accordingly stated that the respondents have not illegally
transferred the said property to Mrs. Nandani Sharma and the
said averment is false and incorrect.
11) I have heard ld. Counsel for the parties and perused
the record.
12) Perusal of the record reveals that though the
respondents have stated that Mrs. Nandani Sharma had got the
Gift Deed executed from respondent no. 3 fraudulently, however,
they have not denied execution of the Gift Deed qua the
mortgaged property. Moreover, Mrs. Nandani Sharma has also
stated that a registered Gift Deed dated 27.12.2024 had been
executed by respondent no. 3 in her favour.
13) Perusal of the sanction letter dated 16.07.2024
reflects that security by way of equitable mortgage over property
being Plot No. 5/797, Ground Floor, HIG-Double Story, Rachna,
Sector-5, Vaishali, Ghaziabad, UP, i.e. the subject property was
created. The terms and conditions of the sanction letter
specifically mentions in Clause-14(n) that if the property is
destroyed/sold/disposed off/alienated etc. in any manner, it will
amount to an event of default.
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14) The mortgage deed of the subject property reveals
that it was entered into between respondents and the petitioner.
The respondents were referred to as the mortgagor/s, which
expression included its/his/her respective heirs, executors,
administrators and permitted assigns, surviving partners,
successors, members and all persons deriving /claiming title
thereunder, as the case may be. Mrs. Nandani Sharma had
derived her title from respondent no. 3 vide the Gift Deed dated
27.12.2024 and hence, since the right in the subject property
were derived by her from respondent no. 3, therefore, she would
also be liable under the mortgage deed executed between the
parties.
15) In
Devtree Corporation LLP vs. Bhumika North
Gardenia, AIR 2024 Kant 264, the Hon’ble Karnataka High
Court after discussing the law laid down by the Hon’ble Supreme
Court in the matter of
Cox and Kings Ltd. vs. Sap India Pvt. Ltd.
& Anr.,2024 (4) SCC 1, observed as under :
“16. The agreement dated 16.10.2020 contains a binding
arbitration clause. The appellant/ purchaser being the
assignee, steps into the shoes of the vendors of the
agreement dated 16.10.2020, and takes the properties
from vendors with all rights and obligations attached to
them. The transferee is not bound by the obligations only
if the person in whose favour the obligations exist, agrees
to waive such obligations. No such waiver is claimed or
asserted by the appellant.
17. During the course of the hearing, an important
question was posed by my esteemed sister as to what
would be the consequence in case, the proceeding to
enforce the obligations under the agreement dated
16.10.2020 against the vendors, ends in an award in
favour of the respondent. The learned Senior counsel for
the appellant submitted that such an award does not bind
the appellant. Said contention is not tenable. Since the sale
transaction in favour of the appellant during the pendency
of Section 9 proceeding is subject to the outcome of
Section 9 proceeding, and said proceeding being a step-
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in-aid to the proceeding to be initiated before the Arbitral
Tribunal, the appellant who is a pendente lite purchaser
during Section 9 proceeding cannot be permitted to say
the award does not bind him. Accepting such contention
in effect amounts to unilateral termination of the
'arbitration agreement' and consequently renders the
award of the Tribunal as unenforceable. It will also defeat
the very object behind Section 8 of the Act of 1996.
16) In
Chloro Controls (I) Pvt. Ltd. vs. Seven Trent
Water Purification Inc. and Ors., MANU/SC/0803/2012, the
Hon’ble Supreme Court held as under :
“65. Normally, arbitration takes place between the
persons who have, from the outset, been parties to
both the arbitration agreement as well as the
substantive contract underlining that agreement. But,
it does occasionally happen that the claim is made
against or by someone who is not originally named as
a party. These may create some difficult situations,
but certainly, they are not absolute
obstructions to law/the arbitration agreement.
Arbitration, thus, could be possible between a
signatory to an arbitration agreement and a third party.
Of course, heavy onus lies on that party to show that, in
fact and in law, it is claiming ‘through’ or ‘under’ the
signatory party as contemplated under Section 45 of
the 1996 Act. Just to deal with such situations
illustratively, reference can be made to the
following examples in Law and Practice of
Commercial Arbitration in England (Second Edn.) by
Sir Michael J. Mustill:
1. The claimant was in reality always a party to the
contract, although not named in it.
2. The claimant has succeeded by operation of law to
the rights of the named party.
3. The claimant has become a part to the contract in
substitution for the named party by virtue of a
statutory or consensual novation.
4. The original party has assigned to the claimant
either the underlying contract, together with the
agreement to arbitrate which it incorporates, or the
benefit of a claim which has already come into
existence.”
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17) It is contended on behalf of Mrs. Nandani Sharma
that since she was not a party to the agreement for loan against
property or the mortgage deed, therefore, she is not bound by the
arbitration clause contained therein. In light of the law discussed
hereinabove, Mrs. Nandani Sharma, who had succeeded to the
rights of respondent no. 3 in the said property is a veritable party
being the assignee, who had stepped into the shoes of respondent
no. 3 and took the property from respondent no. 3 with all its
rights and obligations. No waiver of the obligations has been
claimed by respondent no.3. Accordingly, application under
Order I Rule 10 CPC is allowed. Mrs. Nandani Sharma is
accordingly arrayed as respondent no. 5 in the present petition.
18) Pertinently, the financial facility in issue was a loan
against the subject property. Accordingly, the mortgaged/subject
property, which is the foundation of the financial facility granted
to respondents 1 to 4, has been gifted away to respondent no. 5
and thereby as per the petitioner, the respondents committed an
event of default of the financial facility. In these circumstances,
the respondents are restrained from transferring, disposing off,
alienating, hypothecating, charging or parting with possession of
or transferring or creating any right, title or interest in favour of
anyone else in respect of the mortgaged property, to secure the
rights and interest of the petitioner.
19) The grant of ad interim urgent relief in favour of
petitioner shall, however, be subject to the following conditions:-
(i) The petitioner shall take requisite steps for
appointment of an arbitrator in terms of loan
agreement;
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(ii) Petitioner is directed to initiate arbitration
proceedings against respondents within the period of
90 days from today in terms of Section 9(2) of the
Arbitration & Conciliation Act, as amended till date;
(iii) In case of failure to do so on the part of the
petitioner, the aforesaid order shall be deemed to be
vacated;
(iv) This order shall remain valid for three months
from today.
20) Petition under Section 9 of the Arbitration and
Conciliation Act seeking ad interim relief filed on behalf of
petitioner is disposed off accordingly.
21) File be consigned to Record Room.
Announced in the open Court
on 29th July, 2026
( Deepali Sharma )
District Judge (Commercial Court)-03
Patiala House, New Delhi.
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