Tarun Krishan Aggarwal & Anr. v. SHO, P.S. Hauz Qazi & Ors.

1. This hearing has been done through hybrid mode (physical and virtual hearing).

2. The Petitioners are stated to have availed of a loan facility with Kotak Mahindra Bank (hereinafter, ‘Bank’). The total loan disbursed to the Petitioners was Rs.15,00,000/-. A total amount of Rs.12,88,555.20/- is outstanding, though, the Petitioners have made several representations to the Bank for restructuring of the loan.

3. Various emails were sent by the Petitioners to the Bank for restructuring of the loan, which are annexed along with the petition. However, on 21st November, 2020, the Petitioners received notice dated 4th November, 2020, along with appointment letter dated 2nd November, 2020 by which an arbitrator was appointed by the Bank. The said arbitrator is an advocate based in Chennai. Suddenly, on 21st December, 2020, i.e. within a few weeks of the Petitioners receiving the notice, they received an order 2021:DHC:626 dated 7th December, 2020, purportedly passed by the arbitrator.

4. There are two versions of this order dated 7th December, 2020 which are placed on record. In the first version, one Mr. Shorya Verma, has been appointed as the receiver to take possession and custody of the movable properties of the Petitioners mentioned in the schedule. The operative portion of the order reads as under: “Accordingly, Order is passed directing the appointment of Mr. Shorya Verma as the receiver for taking possession and custody of the moveable properties of respondent, mentioned in the schedule hereunder and for which purpose the said receiver is hereby authorized to take necessary aid from police, in whose jurisdiction the properties are found. And further the respondents are directed to disclose their other assets as mentioned in para 2 above, to the receiver appointed.”

5. In the second version of the order, four persons have been appointed as the receivers. The operative portion of the order is as under: “Accordingly, Order is passed directing the appointment of Mr. Sanjeev Jain or Ravi Bansal or Ashok Kumar as the receiver for taking possession and custody of the moveable properties of respondent, mentioned in the schedule hereunder and for which purpose the said receiver is hereby authorized to take necessary aid from police, in whose jurisdiction the properties are found. And further the respondents are directed to disclose their other assets as mentioned in para 2 above, to the receiver appointed.”

6. Ld. counsel for the Petitioners submits that Respondent No. 4, i.e., Mr. Ramashankar, an officer of the Bank, along with the Delhi Police, reached the residence of the Petitioners at about 1:00 pm on 30th December, 2020 and forcibly entered the premises. There are allegations that an amount of Rs. 20,000/- was taken by the constable, however, this is disputed by the police. It is further alleged that the Petitioners were forced to make an NEFT transfer of Rs.59,205/- to the Bank and also give the Bank a cheque of Rs.1,18,410/-. Further, on 1st January, 2021, Respondent No.4 is stated to have visited the Petitioners and threatened them into depositing a further sum of Rs.59,205/- into the account of the Bank. Subsequently, Petitioner No.1 visited Respondent No.3 in the police station. Attempts are stated to have been made to meet Respondent No.1, however, Respondent No.1 refused to meet Petitioner No.1. On 6th January, 2021, a complaint was filed by the Petitioners with Respondent No.1 against police officials who had accompanied Respondent No.4 to threaten the Petitioners. A further complaint was made against Respondent No.3 being appointed as the Investigation Officer, on the ground that the Petitioners’ complaint was also against him. The Investigating Officer was subsequently changed, however, the Petitioners’ submission is that they continue to be harassed by the Respondents. Accordingly, the Petitioners pray for the following: “(a) direct the respondent No.2 to take appropriate action on the complaint of the petitioners and be further pleased to direct respondent No.3 to issue receipt of having received Rs.20,000/- in cash which till date has not been given by him towards his expenses in giving police protection to respondent No.4; (b) direct respondent No.2 to take appropriate action against respondent No.4 for misusing the police as representative of respondent No.5 to extract money without following due process of law;

(c) restrain the Respondent No.6 from proceeding further as his appointment is contrary to the law settled by the Hon’ble Apex Court and is not in accordance with due procedures of law as laid down under Arbitration and Conciliation Act, 1996;

(d) pass any other writ, order and direction that this Hon’ble Court may deem fit and proper in the facts and circumstances of the case and in the larger public interest.”

7. After perusal of the record, this Court is of the opinion that the manner in which the order under Section 17 of the Arbitration & Conciliation Act, 1996 (hereinafter, ‘Act’) is sought to be enforced through the police and the receiver would be contrary to law. Section 17 of the Act reads as under:

17. Interim measures ordered by arbitral tribunal. -- (1) A party may, during the arbitral proceedings, apply to the arbitral tribunal--

(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely: - (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the 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 arbitral tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it. (2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the Court.]”