Authority: High Court of Judicature at Bombay

Order Date: September 9, 2026

Case Overview

  • Petitioner: IIFL Finance Limited; Respondents: SM Traders & Others.
  • Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, invoking Clause 20 of the SNE Business Loan Facility Agreement which contains an arbitration clause.
  • On 16 August 2023, respondents applied for a business loan; petitioner sanctioned Rs 30,00,000 and both parties executed the Loan Agreement on the same day, disbursing the amount to respondents.
  • Respondents defaulted on instalment payments; petitioner issued a Loan Recall Notice on 22 April 2025 demanding repayment of the entire outstanding amount within seven days.
  • Outstanding amount claimed: Rs 32,39,795.73, inclusive of interest accrued from 14 April 2025 until payment or realisation, as per the loan agreement.
  • Respondents neither replied to the recall notice nor cleared the dues, and have not appeared before the Court despite proper service.
  • The Court previously directed respondents to disclose details of movable and immovable assets; this order remains uncomplied.
  • Petitioner alleges respondents are attempting to dispose of or transfer assets to defeat recovery, though no direct evidence of asset alienation is produced.
  • The Court considered the Supreme Court judgment in Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel (India) Ltd. (2022) 20 SCC 178, emphasizing that interim relief under Section 9 does not require proof of actual asset transfer, only a reasonable apprehension of asset unavailability.

Final Outcome

  • The Court finds a prima facie case in favour of the petitioner, noting continuous default, non‑appearance, and non‑compliance with asset‑disclosure.
  • Interim protection is granted: attachment and freezing of the respondents' bank account(s) up to Rs 32,39,795.73.
  • Specific account frozen:

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

| SM Traders | 1990515034 | ICICI Bank Ltd | ICICI Bank Ltd., Bheskar Tower, 201/1/15, Mahavir Chowk, Civil Lines, Solapur, 413 003 (IFSC: ICIC0000199) |

  • Respondents are restrained from withdrawing or transferring funds from the above account.
  • The observations made are prima facie and confined to the Section 9 application; the arbitral tribunal will decide the dispute on its merits.
  • Petition is disposed of with no order as to costs.

Topics: Arbitration, Interim Relief, Loan Default