ADITYA BIRLA HOUSING FINANCE LIMITED Vs. AXIS BANK LIMITED

JUDGEMENT

(1.) This is a petition filed under Sec. 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) seeking interim measures before commencement of arbitral proceedings. Petitioner seeks a direction against Respondent No.1-Axis Bank to handover title deeds of the subject property to it during pendency of hearing and final disposal of arbitral proceedings between the parties.

(2.) Petitioner is a private limited company engaged in the business of housing finance. Respondent No.1 is a banking company doing business under the Banking Regulation Act, 1949. Respondent Nos. 2 to 5 are the borrowers, who had availed credit facilities in the form of cash credit (CC) and overdraft (OD) facility from Respondent No.1. The borrowers approached the Petitioner on 17/7/2023 for sanction of credit facilities of 4,70,05,000/- against security. The loan was applied for the purpose of taking over the CC and OD facilities sanctioned by Respondent No.1. to the borrowers. In furtherance of their application, the borrowers submitted copies of foreclosure letters and statement of accounts issued by Respondent No.1 relating to CC and OD facilities. Petitioner sanctioned loan of Rs.4,70,00,000.00 in favour of the borrowers on 31/8/2023. According to the Petitioner, the loan was sanctioned against mortgage of the property bearing Plot No. 25, Survey No.20, Dwarka Service Centre Marble Market, South West Delhi, Delhi owned by Mr. Surendra Kumar Agarwal (subject property). It appears that the subject property was also mortgaged with Respondent No.1 for CC and OD facilities and accordingly, title deeds of the property were in possession of Respondent No.1-Bank.

(3.) On 4/9/2023, Petitioner and borrowers entered into loan agreement, which contained arbitration clause. On 12/9/2023, the borrowers also executed irrevocable Power of Attorney in favour of Petitioner which, inter alia authorized the Petitioner to collect the title documents of subject property from Respondent No.1. At the request of the borrowers, Petitioner transferred amount of Rs.17,05,144.00 in CC account of Axis Bank of Respondent No.1 and Rs.96,25,003.00 in OD account of Respondent No.5. On 13/9/2023, Respondent No.5 issued request for debit freeze in respect of the OD facilities. According to the Petitioner, despite disbursal of the aforesaid amounts, Respondent No.1 failed to release the title deeds. Petitioner therefore requested Respondent No.1 by letter dtd. 10/1/2024 to hand over the title deeds of the subject property. On 8/2/2024, the borrowers' accounts were classified into Non- Performing Assets (NPA) as per the RBI guidelines. On 19/6/2024, Petitioner issued notice to Respondent No.1 for handing over title deeds of the subject property. On 15/7/2024, Respondent No.1 replied to the Petitioner inter alia contending that sum of Rs.88,90,126.00 was pending in relation to OD facility in the accounts of the borrowers. Petitioner sent letter dtd. 27/8/2024 to Respondent No.1 contending that all the outstanding dues in CC and OD facility were duly paid by the Petitioner.