Interim Order 1

Order Details: COPY OF ORDER
Pdf Text: Arbitration No. 4674/2025
M/s DANDONA FINANCE LTD. VS. KHALID
11.09.2025
Fresh petition u/s 9 of Arbitration & Conciliation
Act, 1996, received by way of assignment. It be checked and
registered.
Present: Ld. Counsel for the petitioner.
Heard. Perused.
The petitioner has mentioned in legal notice that the
advance copy of the petition has been sent to the respondent via
courier receipt. The courier receipt is on record. The petitioner
has complied with order of the High Court dated 20.06.2025
passed in “Surender Kumar Vs. Kotak Mahindra Bank Ltd.”
FAO (Comm ) 161/25.
Ld. Counsel for the petitioner submits that as far as
the territorial jurisdiction is concerned since the seat of the
arbitrator is in North Delhi, therefore, the present application i.e.
u/s 9 of Arbitration & Conciliation Act, 1996, is maintainable
before this Court. Ld. Counsel further submits that the
outstanding amount is Rs.1,80,000/- only i.e. below Rs. 3 lacs.
Hence, the matter cannot be entertained by the Commercial
Courts in view of Section 2, 6, 10 (2) and 12 (b) of the
Commercial Courts Act 2018. It is further stated that since the
matter has to be decided by the Ld. Principal Civil Court in view
of Section 2 (e) (i) of the Arbitration and Conciliation Act 1996,
this court has pecuniary jurisdiction to entertain and try the
present matter.
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On merits, Ld. Counsel for the petitioner submits
that the present application under Section 9 of the Arbitration &
Conciliation Act, 1996 has been filed for interim relief of
appointment of receiver with a direction to take possession of the
vehicle i.e. E RICKSHAW bearing Regn. No. DL7ER6127
Chasis No. 15383 Engine No. 15383 (herein after referred as
'
subject vehicle'). Petitioner has also filed an application for grant
of ex-parte ad-interim orders for appointment of court receiver
and direction to take possession of the subject vehicle. It is the
case of the petitioner that it is a non- banking finance company
duly registered with the Reserve Bank of India and is
inter alia
engaged in the business of providing finance for various
purposes. The petitioner and respondent executed a Loan
Agreement, whereby the petitioner advanced a loan of
Rs. 1,50,000/- to the respondent for purchase of subject vehicle
which was hypothecated under the agreement. In terms of
agreement, the loan was to be repaid by way of 18 monthly
installments for Rs.11,225/- each starting from 03.01.2024 to
30.06.2025. It is the case of the petitioner that after availing the
loan facility and enjoying the possession of the vehicle, the
respondent failed to adhere to financial discipline and committed
willful defaults in payment of the monthly installments. It is
stated that there is an outstanding payment against 2 EMIs. It is
further stated that parties are bound by the Arbitration
Agreement in event any dispute arises between the parties. It is
stated that the matter has not been referred any arbitrator for
the purpose of Arbitration proceedings by the petitioner
company and will be referred soon in the event of non disposal of
dispute after due process of law. It is stated that as of now re-
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possession of vehicle is the sole way before the petitioner to
secure his/her present default and the future pending amount. It
is therefore, humbly prayed that the executive of the petitioner
company be appointed as a receiver so as to secure the vehicle,
repossessing the same for the proper and just trial for the
arbitrator.
After considering the submissions of the petitioner,
this court is of the considered view that the present application is
maintainable before this Court.
Having perused the petition, the application and the
documents filed therewith as well as having heard to submissions
of Ld. Counsel for the petitioner, this court is of the opinion that
in the present case, the petitioner has made out a
prima faice case
for appointment of receiver, since the respondent has failed to
fulfill his/her financial obligation under the Loan cum
Hypothecation Agreement to pay the monthly installment in
terms of the agreement. There is a bonafide apprehension that the
respondent may sell or dispose the subject vehicle. The balance
of convenience also appears to be in favour of the petitioner in
as much as there is Loan cum Hypothecation agreement between
the parties whereby the subject vehicle has been hypothecated as
security for the loan. Further, the petitioner may suffer
irreparable damage as there is every possibility of harm being
caused to the interest of the petitioner in case in the
interregnum,
the respondent sells or disposes of the above said vehicle.
Accordingly, Sh. Anil Jha is appointed as receiver in
this case to take custody of the vehicle i.e. E RICKSHAW
bearing Regn. No. DL7ER6127 Chasis No. 15383 Engine No.
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15383 from the respondent or his/her agent. The following
direction are accordingly issued to the receiver:-
That Receiver shall first try to take over the
possession of the aforesaid vehicle from the house of the
Respondent or the address(es) mentioned by him in his
application seeking loan, but if vehicle is not found at the
aforesaid places, the Receiver may recover it from any place
wherever it is found or stationed with or without the assistance of
police but without breach of peace.
1. That Receiver shall not stop the aforesaid vehicle if it is
plying or running on road, to forcibly take out the driver,
to take the possession of the aforesaid vehicle and the
Receiver shall not attempt to block the passage of the
aforesaid vehicle too, to bring it to halt to take its
possession.
2. That the Receiver shall not take the possession of the
aforesaid vehicle, if the vehicle is on road and is occupied
by any physically or mentally challenged person, ill or
infirm person, senior citizen or a woman unaccompanied
by any man. In such cases, the Receiver shall repossess
the aforesaid vehicle from the house of the Respondent or
house of such occupier or any such other place wherever
vehicle is found to be stationed.
3. That Receiver shall immediately show some proof of his
identity and attested copy of this order to the Respondent,
his agent or any other person found to be in possession of
the aforesaid vehicle and handover to him a photocopy of
this order against due acknowledgment.
4. The respondent, after receiving copy of this order may
raise objections against the Receiver for non-compliance
of any of the terms stated in this order by moving
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appropriate application before the Arbitrator who shall
decide the same as per law.
5. The Receiver shall permit the Respondent, his agent or
person found to be in possession of the aforesaid vehicle
to take the photographs of the aforesaid vehicle, if he so
desires.
6. That Receiver shall immediately record the condition of
the recovered vehicle separately and supply the copy of
that record to Petitioner and Respondent on the spot
against due acknowledgment.
7. That after repossession of the vehicle, Receiver or
Petitioner shall not dismantle or damage the vehicle and
keep the same in safe custody and in case of any damage
to the vehicle, the Petitioner shall be responsible and it
will duly compensate the respondent.
8. An inventory in respect of the attachments in the vehicle
in question shall be made by the Receiver and copy of the
same be given to the person from whose possession the
vehicle is possessed and the petitioner shall file the same
in Court alongwith the report of the Receiver.
9. The condition of vehicle shall be noted and the Receiver
shall take photograph of the repossessed vehicle from all
sides and shall ensure that vehicle is kept in the same
condition in which it was repossessed.
10. An appropriate receipt shall be given to the person from
whose custody the vehicle is taken. The vehicle in
question shall not be sold or dispossessed of or parted
without the permission of the court.
11. That if the Respondent, his agent or any person found to
be in possession of the aforesaid vehicle pays the pending
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EMIs up to the date of repossession, on the date of
repossession itself by any mode of payment, the Receiver
shall accept the same and issue proper receipt to
respondent and will not repossess the aforesaid vehicle
and release the same on execution of proper
Superdarinama by the respondent in the name of
receiver to the effect that respondent will pay all the
future installments regularly within time as per aforesaid
agreement and will not dispose of the aforesaid vehicle
without prior permission of the Arbitrator.
12. Petitioner shall file the affidavit indicating repossession
of vehicle within three days of its repossession alongwith
its photograph and inventory.
13. That if the Respondent does not make the payment of the
outstanding amount to the Petitioner on the date of
repossession, but makes the payment of outstanding dues
within thirty days from the date of repossession, the
Receiver shall release the aforesaid vehicle on furnishing
of Superdarinama on the aforesaid terms and conditions.
14. The Receiver will not seize the aforesaid vehicle, if an
independent third party interest is involved into it,
without seeking prior permission of the Court.
15. The Receiver shall take the police aid, if required. The
concerned SHO of the area where the vehicle is found
shall render all possible assistance to the Receiver for
taking possession of the vehicle.
16. In case the vehicle is not repossessed within a period of
two months from the date of this order, the present order
shall cease to be in operation, since the present
proceedings are only interim measures with the dispute
being required to be resolved by the arbitrator.
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17. Arbitral proceedings shall commence within 90 days of
this order in terms of amended Section 9 (2) of
Arbitration and Conciliation Act, 1996. For all further
reliefs petitioner would be at liberty to approach Ld.
Arbitrator u/s 17 of the Act.
Issue notice of the present petition to respondent on filing
of PF/RC/Speed Post/Courier, returnable on 13.01.2026.
(Sidharth Mathur)
DJ-1(North)/Rohini Courts
Delhi/11.09.2025
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