Authority: High Court of Judicature at Bombay, Commercial Division
Order Date: 08 October 2026
Case Overview
- Petitioner: IIFL Finance Ltd.
- Respondents: M/s Nannumal Mahesh Chand and Others.
- Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim protection pending arbitration.
- Business Loan Agreement executed on 23 December 2023 for Rs 15,00,000.
- Respondents defaulted on instalments; Loan Recall Notice dated 02 May 2025 demanded repayment of the entire outstanding amount.
- Outstanding amount claimed: Rs 14,57,079.78 plus interest at 19% per annum from 01 April 2025.
- Respondents neither replied to the recall notice nor repaid the dues, and failed to comply with the Court’s earlier order to disclose movable and immovable assets.
- Petitioner alleged respondents were attempting to dispose of assets to defeat recovery.
Reasoning
- Court noted absence of respondents and lack of any reply or asset disclosure, establishing a prima facie case.
- Cited Supreme Court judgment in Essar House (P) Ltd. v. Arcelor Mittal Nippon Steel (India) Ltd. (2022) emphasizing that interim relief under Section 9 may be granted without proof of actual asset transfer if there is a reasonable apprehension of dissipation.
- Determined that balance of convenience favours petitioner and that without interim protection the arbitral award could become unenforceable.
Final Outcome
- Petition partially allowed.
- Order directing debit freeze of all bank accounts of the respondents, including those linked with PAN No. ALNPA0269R (Respondent No.2) and PAN No. DUNPA8895R (Respondent No.3).
- Observation that the order is prima facie and limited to Section 9 proceedings; arbitral tribunal to decide merits independently.
- Petitioner directed to constitute the arbitral tribunal within 90 days from the order date.
- Petition disposed of; no order as to costs.
Topics: Interim Arbitration Relief, Loan Default, Asset Preservation