M/S V AND L DIAGNOSTICS CENTRE LLP v. M/S CLIX CAPITAL SERVICES PVT LTD

1. O.M.P.(I) (COMM.) 62/2024 is preferred on behalf of M/s V and L Diagnostics Centre LLP (hereinafter referred to as “V&L”) under Section 9 of the Arbitration and Conciliation Act, 1996 (‘1996 Act’) for restraining M/s Clix Capital Services Pvt Ltd (hereinafter referred to as “Clix Capital”) from taking possession of the hypothecated assets and/or any coercive steps with respect to the said assets such as sale/auction.

2. Case of V&L as set up in the petition is that V&L is a Limited Liability Partnership engaged in the business of running a medical diagnostic centre providing services such as MRI scan, CT scan etc. V&L approached Clix Capital to avail loan facility and seek financial assistance for purchase and procurement of medical equipments used for endoscopy, laparoscopy and ventilators, monitors, etc. for its Diagnostic Centre and accordingly, a Facility-cum-Hypothecation Agreement (‘Agreement’) was executed and signed between the parties on 28.06.2022.

3. It is averred that prior to the execution of the Agreement, Clix Capital issued sanction letter dated 22.06.2022 enumerating the terms and conditions for disbursal of the loan, which included the payment schedule. Clix Capital vide letter dated 29.06.2022 issued delivery order for medical equipments for V&L in favour of Wipro GE Healthcare mentioning therein that the money was to be paid on receipt of delivery order. V&L states that it started making payments of EMIs towards the loan availed bonafidely as per the schedule, however, despite the execution of the Agreement in June, 2022, it was only in March, 2023 that V&L was able to procure the machines from Clix Capital and the machines were installed only on 27.11.2023. In view of this, V&L requested Clix Capital to reconcile the account statements, but instead of doing so, Clix Capital coerced V&L to issue 03 post-dated cheques. Apprehending that Clix Capital would sell the machines hypothecated to it, which were the backbone of the Diagnostic Centre, in the interest of the patient care, V&L filed the present petition when Clix Capital illegally vide letter dated 05.01.2024 terminated the Agreement.

4. Be it mentioned that by order dated 23.02.2024, this Court restrained Clix Capital from seizing, possessing or auctioning the equipments/assets noting the submission of V&L that the equipments were required at the Diagnostic Centre to subserve the interest of the patients and stayed the arbitral proceedings commenced by Clix Capital, on a prima facie opinion that unilateral appointment of a sole Arbitrator was hit by the judgment of the Supreme Court in Perkins Eastman Architects DPC and Another v. HSCC (India) Ltd., (2020) 20 SCC 760. By the same order, V&L was restrained from creating third party rights or interest in or in any manner dissipating or alienating the hypothecated equipments and assets. Parties were referred for mediation on their request before the Delhi High Court Mediation and Conciliation Centre.

5. As the chronology goes, parties settled their disputes before the Mediation Centre and a Settlement Agreement was executed and signed on 25.04.2024. V&L agreed to pay the overdue amount till 25.04.2024 in 04 equal installments subject to the disputed interest amount. It was also undertaken that monthly installments from May, 2024 will be paid as per the re-payment schedule. One of the terms of the settlement was that in case V&L defaulted in the agreed payment including regular monthly installments, it shall surrender peaceful possession of the medical equipments hypothecated under the loan facility agreement. Certain other terms were also incorporated in the Settlement Agreement.

6. Clix Capital thereafter filed an application being I.A. 10075/2025 for vacation of interim order dated 23.02.2024 on the ground that having failed to make payments as per the Settlement Agreement, V&L became liable to surrender possession of the equipments in terms of paragraph 6 of the Settlement Agreement, which was the default clause. It was brought forth in the application that Clix Capital had extended the credit facility vide two separate sanction letters dated 22.06.2022 and 25.08.2022 for a sum of Rs.3,73,30,107/- and Rs.1,40,18,342/- respectively and that default had increased manifolds. It was stated that as on 13.04.2025, defaulted receivable was to the tune of Rs.2,94,82,598/- and foreclosure amount was Rs.6,21,91,889.80 for the five loans. It was also stated in the application that despite the interim order having been passed on 23.02.2024 and making repeated assertions that a petition under Section 11(6) of 1996 Act was being filed by V&L seeking appointment of an Arbitrator, the petition had not seen the light of the day and V&L had no intent to commence the arbitral proceedings.

7. Subsequently, Clix Capital also filed two petitions under Section 9 of the 1996 Act, being O.M.P.(I) (COMM.) 406/2024 and O.M.P.(I) (COMM.) 407/2024 for appointment of Receivers to re-possess the following medical equipments hypothecated against the loan amount of Rs.3,73,30,107/-, sanctioned vide letter dated 22.06.2022, disbursed in Tranche-I, Tranche-II and Tranche-III on 28.06.2022:-

8. Learned counsel for V&L submits, on instructions, that V&L is ready and willing to appoint an Arbitrator to adjudicate the inter se disputes between the parties and till such time the Arbitral Tribunal is constituted and enters upon reference, interim order dated 23.02.2024 be continued considering that the hypothecated medical equipments are being used in a diagnostic lab and if Clix Capital is permitted to re-possess the equipments, it will cause irreparable harm to patient care. On the offer to pay the outstanding dues, it is asserted that V&L is willing to pay a sum of Rs.10 lacs and that too, within two months.

9. Learned Senior counsel for Clix Capital per contra vehemently opposes the continuation of interim order on multiple grounds. It is contended that Section 9(2) of the 1996 Act requires that where Court passes an order for any interim measure or protection, the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such time as the Court may determine. It is a settled law that if the party having an interim order in his favour does not initiate steps to resort to arbitration, the interim order must be vacated and in this context, reliance is placed on the judgment of Division Bench of this Court in Ezen Aviation Pty Limited and Another v. Big Charter Private Limited, 2021 SCC OnLine Del 5369. The argument is that over a year has passed since the interim order was passed on 23.02.2024 and apart from making statements before the Court that petition under Section 11(6) of 1996 Act will be listed in near future, no concrete steps have been taken towards commencement of the arbitral proceedings and till date no such petition is listed.

10. It is further argued that cross collateral of the medical equipments was provided under Clause 3.[1] of the Agreement and consequences of event of default were provided in Clause 7.3, which provides that notwithstanding any other right that may be available to the Lender or anything contrary contained in any of the Transaction Documents, on the happening of an Event of Default, the Lender may by a notice to the Borrower terminate either whole or part of the facility and re-possess the hypothecated assets apart from other options. It is submitted that loan recall notice was issued to V&L and as on 13.04.2025 in respect of all 05 loan accounts, default receivables have risen to Rs.2,94,82,598/- and foreclosure amounts are Rs.6,21,91,889.80. The borrower DPD has passed 600 days and in this backdrop, Clix Capital has become entitled to re-possess the equipments hypothecated for the loans taken in three tranches under sanction letter dated 22.06.2022, which is the subject matter of these petitions and thus a Receiver be appointed to take possession. In support, reliance is placed on the judgment of Co-ordinate Bench of this Court in GE Capital Services India v. Vasan Health Care Pvt. Ltd., 2016 SCC OnLine Del 1547, wherein Court had permitted the Respondent/Borrower to clear the outstanding dues within four weeks failing which the Receiver appointed by the Court was to take possession of the hypothecated machines and medical equipments financed by the Petitioner/Lender to the Respondent. Report was to be filed by the Receiver before the Arbitrator, which the Petitioner was proposing to appoint. It was further directed that in case Respondent failed to clear the amount, Petitioner could sell the machinery in the open market after giving the first choice to the Respondent to exercise the option of purchasing. This judgment was taken up in appeal by the Borrower and the Division Bench disposed of the appeals by order dated 08.04.2016 appointing two Receivers, one of the Lender and one of the Borrower. Division Bench was of the opinion that permitting the Receiver to take charge of the machines used for diagnostic purposes would mean that warehouse charges would have to be incurred by the Lender and machinery would lie idle till sold. In these circumstances, direction of the learned Single Judge was modified to the extent that hypothecated property would be in deemed possession of joint receivership but under physical possession of Borrower’s Receiver who would be responsible for its custody, subject to payment of Rs.[5] lacs per week by the Borrower. Subsequently, on reviews being filed by the Lenders on the ground that there was non-cooperation from the Borrowers and lot of hypothecated machinery was not found at the places it was installed, order dated 08.04.2016 was recalled and appeals were dismissed and as a result the Receiver appointed by the learned Single Judge was to act as a sole Receiver and take charge of the hypothecated machinery. SLPs No.15717-15724/2016 filed against order dated 24.05.2016 in review petitions were dismissed by the Supreme Court on 12.07.2016.

11. Reliance is also placed by learned Senior Counsel on an order dated 25.04.2025 passed by the Co-ordinate Bench in O.M.P.(I) (COMM.) 97/2025 in Clix Capital Services Pvt Ltd v. Uhealth India Private Limited & Ors., where in similar circumstances and considering the same Clause 7.3(c) of the Agreement, Court appointed a Receiver to take possession of financed hypothecated medical equipments as the borrower had defaulted to repay the loan amount and the loan facility was terminated.

12. Heard learned counsel for V&L and learned Senior counsel for Clix Capital.

13. It is not dispute that a Facility-cum-Hypothecation Agreement was entered into between the parties on 28.06.2022 and cross collateral of the equipments in question was provided by virtue of Clause 3.[1] of the Agreement. Consequences of Event of Default are provided in Clause 7.[3] and relevant sub-Clause (c) reads as follows:- “7.[3] Consequences of Events of Default:

(c) declare the Security created, if any, pursuant to the terms of the

Transaction Documents to be enforceable, and the Lender or such other person in favour of whom such security or any part thereof is created shall have, inter alia, the following rights: i. to enter upon and take possession of the assets comprised within the Security (Including the Hypothecated Assets), if any, and/or to transfer the assets comprised within the Security created, if any, to any person including the Lender, by way of lease, leave and license, sale or otherwise; ii. seize, recover, receive, appoint receivers or remove, or take possession of all or any part of the said assets comprised within the Security and also of the books of accounts, papers, documents and vouchers and other records relating thereto; iii. remove and/or sell the Hypothecated Assets or any of them by public auction or private contract with or without intervention of the court and subject to such terms and conditions as the Lender may think fit, and to give valid and effectual receipt(s) and discharge(s) for the same transfer, deliver or otherwise deal with or dispose of the Hypothecated Assets or any rights or claims relating thereto In any manner whatsoever and upon such terms and conditions as the Lender may think fit, but without being bound to exercise any of these rights or powers or be liable for any loss or shortfall or consequence in the exercise thereof, save and except for the loss Se negligence or wilful misconduct of the shortfall caused due to or the gross Lender, and notwithstanding that there pay be any pending suit or other proceedings, and iv. exercise any right, power or remedy permitted to it by law, including by suit, in equity, or by action at law, or both, or otherwise, whether for specific performance of any covenant, condition or term contained in this Agreement or other Transaction Documents or for an injunction against a violation of any of the terms and conditions of this Agreement or other Transaction Documents, or in aid of the exercise of any power or right granted in this Agreement or other Transaction Documents and/or as a creditor.”