Authority: High Court of Judicature at Bombay

Order Date: September 9, 2026

Case Overview

  • Petitioner: IIFL Finance Limited (filed Arbitration Petition No. 470 of 2025).
  • Respondents: Krishna Yarn & Others.
  • Counsel for Petitioner: Ms. Pooja Singh a/w Ms. Shrutika Patil.
  • Legal Basis: Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, invoking the arbitration clause (Clause 20) in the SNE Business Loan Facility Agreement.
  • Loan Details: On 29 October 2023, IIFL Finance sanctioned a business loan of Rs 30,00,000 to the respondents; the loan agreement was executed the same day and the amount was disbursed.
  • Default: Respondents failed to pay instalments as agreed, leading to continuous default.
  • Recall Notice: A Loan Recall Notice dated 22 April 2025 demanded repayment of the entire outstanding amount within seven days. The petitioner claimed outstanding dues of Rs 28,49,611.06 plus interest from 14 April 2025 until payment or realisation.
  • Non‑Compliance: Respondents neither replied to the recall notice nor cleared the dues. They also failed to appear before the Court despite proper service and did not comply with a prior Court order directing disclosure of their movable and immovable assets.
  • Alleged Asset Disposition: Petitioner alleges respondents are attempting to sell or transfer assets to defeat recovery, though no direct evidence of such transfers was produced.

Final Outcome

  • The Court held that the petitioner has made out a good prima facie case and that the balance of convenience favours granting interim protection under Section 9.
  • Interim Relief Granted: Attachment/Freeze of the following bank accounts of the respondents to the extent of Rs 28,49,611.06, restraining any withdrawal or transfer:

| Bank Account Holder | Bank Account No. | Bank Name | Branch Address |

| Krishna Yarn | 4191005014001017 | Yes Bank Limited | SHOP 3044-47, ABHISHEK MKT, RING ROAD, SURAT 395002 (IFSC: YESBOFINCO2) |

  • The observations in this order are prima facie and confined to the Section 9 application; the arbitral tribunal will decide the dispute on its merits without being influenced by this order.
  • The petition is disposed of with no order as to costs.

Topics: Arbitration, Loan Default, Interim Relief