Form-38. APPLICATION FOR GARNISHEE ORDER ( under Sec 9 of ARBITRATION AND CONCILATION ACT, 1996) ASSET CONFISCATED

Transcription

1 Form-38 APPLICATION FOR GARNISHEE ORDER ( under Sec 9 of ARBITRATION AND CONCILATION ACT, 1996) ASSET CONFISCATED BEFORE THE HON BLE DISTRICT COUR / HIGH COURT AT I.A.NO. / O.A. No.. / 20. IN THE MATTER OF ARBITRATION AND CONCILATION ACT, 1996 AND IN THE MATTER OF DISPUTES AND DIFFERENCES BETWEEN AND AND ANOTHER ARISING UNDER THE LOAN AGREEMENT. DATED. M/s. Hinduja Leyland Finance Ltd, No.1, Sardar Patel Road, Guindy, Chennai and its Corporate Office at No.27A, Developed Industrial Estate, Guindy, Chennai and Represented by its Power of Attorney, Shri. Applicant Vs 01.Respondent No Respondent No Garnishee/Respondent No. 3 AFFIDAVIT OF I, son of, aged about years, residing at and employed with the Applicant Company situated at,, do hereby solemnly affirm and sincerely state as follows: 1. I am the of the Applicant/Plaintiff Company and I am fully acquainted with the facts of the case. I am filing this affidavit on behalf of the Applicant/Plaintiff Company herein and I am duly authorised in this regard. 2. It is submitted that the Applicant is a Finance Company incorporated under the Companies Act, 1956 having branches all over India. The core business of the Company among others is providing loan facility

2 to the customers for the purchase of automobiles and machinery's etc., During the course of the business, the First respondent approached the Claimant s branch Office at in the month of 20_ and requested for grant of loan to purchase a Vehicle bearing Regn No., more fully described in the schedule hereunder (hereinafter referred as the Vehicle )" 3. I state that the 1 st respondent as a borrower and the 2 nd respondent as a guarantor have entered in to a loan agreement with the Applicant for the purchase of the schedule mentioned vehicle under agreement no., dated wherein a sum of Rs. /- was financed to the First respondent by the Applicant herein for the purchase of the said vehicle to the respondents. 4. I state that the 2 nd respondent, the Guarantor in the said Agreement, has assured and guaranteed the prompt payment of loan amount and due fulfillment of the obligations by the first Respondent as per the terms and conditions of Loan Agreement. The 2 nd Respondent undertook to indemnify the Applicant in case of any/all the defaults/breach of any terms and conditions committed by the 1 st respondent/borrower and also undertook to make payment when the Lender invokes his guarantee on the happening of any/all of the events of default. 5. I state further that the above said arrangement is also secured by a Demand Promissory Note dated. for a sum of Rs../- duly executed by the First and Second Respondent in favour of the Applicant as Borrower and guarantor respectively. 6. I state that in terms of the said Loan Agreement, the First Respondent herein is due and liable to repay a total sum of Rs../ which includes Loan finance charges in installments. The said monthly installments are repayable by the First Respondent at Rs./- for the first instalment and a sum of Rs /- from the second to the instalment. Further the said Loan Agreement also stipulates that the First Respondent herein will also liable to pay Additional Finance Charges at..% per annum in the event of default committed by him as per clause.. of the Loan Agreement. 7. I state that to the utter dismay of the Applicant/Plaintiff, the 1 st Respondent paid only no of installments and the cheques towards the installments that have fallen due have been returned dishonored by the 1 st Respondent s companyer. The Applicant/Plaintiff was appalled to learn that the 1 st Respondent has instructed his companyer to stop payment of the cheques tendered for payment of the installments payable as per the agreement. Proceedings have been initiated by the Applicant/Plaintiff herein under the Negotiable Instruments Act to prosecute the 1 st Respondent in this regard 8. I further state that when the First Respondent consecutively failed to make the payments towards two instalments, the Respondents were called upon to pay the overdues by this Applicant by notice dated But, the First and second respondents failed and neglected to pay the overdues. 9. I further state that in spite of the notice the first Respondent had again committed a default in the payment of the EMI for the subsequent month of The Applicant had then issued another notice dated calling upon the Respondents to pay the outstanding dues within 7 days or surrender the asset. The applicant duly informed them that in failure of which the entire sum of money advanced and all other charges which includes interests on account of default and such other charges that become payable on account of default will have to be paid by the Respondents jointly and severally by invoking the terms of the Agreement. 10. The Applicant states that even after the issuance of the above said two notices the Respondents neither paid the overdues nor surrendered the vehicle. The Applicant had by above second notice dated. called upon the Respondents to pay the entire dues within seven days of the notice. But the Respondents had grossly failed and neglected to repay the overdues and hence as per the terms of the Agreement, the Applicant is entitled to take possession of the vehicle. 11. I state that in terms of the said Loan agreement dated, any default would render the 1 st Respondent liable to pay the entire sums due under the agreement including additional finance charges. The

3 said Loan Agreement also stipulated that the First Respondent herein would also be liable to pay Additional Finance charges in the event of defaults as per the clause of the said Loan Agreement. 12. I state further that the First Respondent has paid only installment and has not made any further payment and the default continues till date. Since the First Respondent has not made the payments due under the Loan Agreement, the Applicant/Plaintiff has invoked the guarantee clause and hence the First and Second Respondents are jointly and severally liable to repay the amount due under the Loan Agreement. 13. I state that the following sums as on are due and payable by the First and Second Respondents : i) Rs./- - towards overdue instalments ii) Rs./- - towards Additional Finance charges iii) Rs./- - towards remaining (future) instalments iv) Rs. /- - towards other charges/expenses. in all aggregating to a total sum of Rs /- (Rupees..only). I state further that the statement of accounts is filed along with this application and the Applicant/Plaintiff herein craves leave of this Hon ble Court to refer to and rely upon the same. 14. As per Clause of the Loan agreement between the Applicant/Plaintiff and the Respondents the First Respondent is prevented from using the Vehicle for any illegal or unlawful purposes in contravention to the existing law in force in the Country. To the utter shock and surprise of the Applicant/Plaintiff a notice is received from Authorities that the subject financed vehicle bearing Registration No:. The act of the Ist Respondent amounts to criminal breach of trust punishable under Indian Penal Code. The Applicant/Plaintiff is absolutely deprived of the asset viz., vehicle and its interest is jeopardized and has no fall back on the vehicle financed by it due to the act of unauthorised illegal use of the vehicle in the commission of offence. 15. I state that the 1 st Respondent has the benefit of the asset financed to it by the Applicant/Plaintiff and has already derived enormous revenue from the same and has also appropriated such revenue and is bound to pay the agreed installments and discharge its liability under the said Loan agreement. The Applicant/Plaintiff understands that the 1 st Respondent is generating a revenue of well over.. a month using the.. financed by the Applicant/Plaintiff. 16. I state that the first and second respondents have failed to pay the installments regularly even though they were using the Schedule A assets and making profits therefrom. Inspite of several demands neither the amounts due have been paid nor the First Respondent has surrendered the vehicle, but used the vehicle for unlawful purposes resulting in confiscation of the vehicle. 17. As stated earlier, in terms of the Loan Agreement if the Borrower fails to pay the installment on the due date and/or commits default in payment of the installment charges, the Applicant/Plaintiff is empowered to take possession of the assets financed. The Applicant/Plaintiff is not in a position to act on its own to take possession of the vehicles as the same was confiscated by the Authorities. I state that the first respondent is not entitled to use the assets financed for any illegal or unauthorised purposes resulting in confiscation of the vehicle. 18. I state further that all the reasonable and bonafide attempts made by the Applicant calling upon the 1 st and 2 nd Respondents to pay have failed in view of the belligerent attitude of the 1 st and 2 nd respondents whose only motive appears to be to deceive the Applicant and deny the dues lawfully payable to them. The conduct of the Respondent is very clear as indicated in para 15 above that he deliberately hides the vehicle in order to deprive the Applicants lawful claims. The First and Second Respondents herein have miserably failed to take any steps to pay the dues. In view of such conduct of the 1 st and 2 nd Respondents the applicant

4 was constrained to initiate arbitration proceedings against the First and Second Respondents by their letter dated appointing the Arbitrator to decide the Applicant s claim and other disputes that have arisen under the above said Loan agreement. 19. I state that in terms of clause of the Loan Agreement all disputes and differences relating to the Loan agreement shall be referred to the Arbitration of sole Arbitrator appointed by the Applicant herein. In terms of the said clause, the Applicant herein had nominated an Arbitrator pertaining to the above agreement entered between the applicant and the First and Second Respondents herein to proceed with the arbitration. The arbitration proceedings have already commenced and the first date of hearing is fixed on the th 2 for the Applicant to file the claim statement. The Applicant has filed the claim statement and will file the documents before the third respondent. Thus the applicant has already commenced the Arbitration proceedings under the above agreement and the same is now pending before the third respondent. 20. I state further that the said assets are in grave danger of being wasted, damaged as it has been confiscated by the.. authorities and is not put to regular use. I state hereunder that in terms of the said Loan Agreement, the vehicle has been offered as security and hypothecated to the Applicant. The Applicant herein has the first charge over the asset. The Applicant/Plaintiff states that it is necessary and in the interests of justice that pending disposal of the Arbitration proceedings, temporary interim and ad interim injunctions as prayed for herein be granted failing which grave and irreparable harm, loss and injury would be caused to the Applicant/Plaintiff. The Applicant/Plaintiff is approaching this Hon ble Court for interlocutory reliefs with utmost diligence and I submit that this Hon ble Court may exercise its discretion in the Applicant/Plaintiffs favour in view of the fact that the balance of convenience favours the Applicant/Plaintiff who would lose its security and its lawful dues in the absence of such interim relief. 21. I state that the Applicant/Plaintiff is in terms of the said Loan Agreement entitled to the reliefs claimed herein and the Applicant/Plaintiff would be seriously prejudiced if the third Respondent (Garnishee) herein is not restrained by an injunction of this Hon ble Court from paying his dues to the First/Second Respondent On the contrary if such interim orders are not passed the Applicant/Plaintiff would suffer serious loss, damage and suffer grave prejudice. The Applicant/Plaintiff has also made out a prima facie case. 22. I state that the Applicant/Plaintiff herein apprehends that the Schedule A assets given hereunder has very much depreciated in values as it has been purchased in. On the contrary the amount financed under the Loan Agreement has grown and has been growing as the same carries additional finance charges for the defaulted instalments. Therefore the Applicant/Plaintiff apprehends that the said assets alone would not be sufficient to meet the claim amount of the Applicant/Plaintiff herein. In such circumstances, the Applicant/Plaintiff claim amount must be secured by the other assets of the company as well. 23. I state that the Applicant/Plaintiff reliably understands that the Respondent is highly indebted to various parties as a result of which, the Applicant/Plaintiff having advanced huge monies to the Respondent is constrained to approach this Hon ble Court for interim orders to safeguard their interest. I state that the Applicant/Plaintiff apprehends that the first respondent, who is enormously indebted to third parties may close down their business and flee and thereby deprive various creditors including the Applicant/Plaintiff herein. The Applicant/Plaintiff states that the amounts are imminently due to the first respondent/defendant from the 3 rd Respondent/Garnishee and unless suitable orders are passed, the first respondent would receive the amounts and deprive the Applicant/Plaintiff of their rightful dues. 24. The Applicant/Plaintiff understands that the 1 st Respondent is due payments from the Garnishee and that the 1 st Respondent is due payment from the Garnishee and that the 1 st Respondent is to receive the final payment for the contract which has been performed and such payment would be released upon award of a fresh contract. The 1 st Respondent is but a sole proprietary concern and would receive such payment due, through a different entity and the Applicant/Plaintiff would never realise its dues. It is therefore absolutely

5 necessary that an ex parte order prohibiting the garnishee from releasing monies payable to the 1 st Respondent. 25. I state that Balance of convenience favours the Applicant/Plaintiff for passing suitable prohibitory orders restraining the first and second respondents from receiving such monies from the 3 rd Respondent/Garnishee and also to pass suitable orders, restraining the 3 rd Respondent/Garnishee from paying the amounts mentioned in the Schedule B to the first and second respondents their servants, men, agents, or anyone else claiming through or under them. 26. I state that the monies due from the first respondent are unsecured and the monies payable by the garnishees are the only unencumbered assets/amounts of the first respondent. In the event of the first respondent receiving the monies from the Garnishee, the Applicant/Plaintiff will not be able to recover the monies and the Applicant/Plaintiff would be put to irreparable loss and hardship. It is therefore just and necessary that this Hon ble Court may be pleased to pass prohibitory orders, prohibiting the third Respondent/Garnishee from paying the monies mentioned in the Schedule hereunder to the first respondent and to direct the fourth respondent/garnishee to deposit the same into this Hon ble Court to the credit of the above suit. In the foregoing circumstances and in view of the alienation intended to be committed by the First Respondent, it is just, necessary and imperative in the interests of justice that this Hon ble Court may be pleased to: a. Pass suitable prohibitory orders restraining the 3 rd Respondent/Garnishee in Schedule B, from paying the first and second respondents or their men, agents, servants or anyone claiming under them the amounts mentioned in Schedule B hereunder and consequently restraining the first and second respondents from receiving any monies from the Garnishee and to deposit the same into this Hon ble Court to the credit of the above suit pending disposal of the above Suit proceedings. b. Grant an order of interim injunction restraining the First Respondent, or their agents or any one acting of them, or anyone claiming through them from alienating or in dealing with any manner the schedule mentioned assets, pending disposal of the Suit proceedings, without the prior written consent of the Applicant/Plaintiff herein. c. and pass such other orders that are just and necessary in this circumstances of the case and thus render justice. SCHEDULE A.VEHICLE BEARING ENGINE NO..., CHASSIS NO. MANUFACTURED IN THE YEAR.. SCHEDULE B Name & address of Garnishee.... Rs /- (Rupees. only)

6 Solemnly affirmed by the said at this the.. and signed his name in my presence. BEFORE ME