Authority: High Court of Judicature at Bombay, Commercial Division

Order Date: 23 September 2026

Case Overview

  • Parties: IIFL Finance Limited (Petitioner) vs. Alagu Meenakshi Agencies (Respondent). Petition filed as Arbitration Petition No. 707 of 2025 under Section 9 of the Arbitration and Conciliation Act, 1996.
  • Loan Details: On 13 June 2024, a Term Loan Facility of Rs 16,69,883.00 was sanctioned and disbursed to the Respondent under a Business Loan Agreement containing an arbitration clause (Clause 26).
  • Default: Respondent failed to make instalment payments as agreed. A Loan Recall Notice dated 2 May 2025 demanded repayment of the entire outstanding amount.
  • Claimed Outstanding: Petitioner claimed Rs 18,85,552.66 together with interest and additional interest until payment or realisation, as per the Loan Agreement.
  • Non‑Compliance: Respondent neither replied to the recall notice nor repaid the dues. The Court previously directed the Respondent to disclose movable and immovable assets; this order remains unfulfilled.
  • Allegations of Asset Disposition: Petitioner alleges that Respondent is attempting to sell or transfer assets to defeat recovery, though no direct evidence of alienation was produced.
  • Procedural Posture: Respondent was properly served but failed to appear before the Court or file any reply.
  • Legal Basis: The Court applied principles from Supreme Court judgment in Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel (India) Ltd. (2022) regarding interim relief under Section 9, emphasizing prima facie case, balance of convenience, and the need to protect the subject matter of arbitration.

Final Outcome

  • The Court partially allowed the petition and issued the following orders:

1. Debit Freeze: All bank accounts of the Respondents are to be marked for debit freeze, specifically those linked with PAN ALXPA3825F (Respondent No. 2) and PAN AKMPM4177E (Respondent No. 3).

2. Scope of Observation: The observations are prima facie and confined to the Section 9 application; the arbitral tribunal will decide the dispute on its merits.

3. Arbitral Tribunal Constitution: Petitioner must initiate steps to constitute the arbitral tribunal within 90 days from the order date.

4. Disposition: The petition is disposed of with no order as to costs.

Topics: Arbitration, Banking Loan Default