Bombay High Court
IIFL FINANCE LTDversusMUKESH KUMAR AND COMPANY
- Decided
- Disposal
- DISPOSED OFF
Holding
The court held that interim protection under Section 9 should be granted given the respondents' non‑compliance and the risk of asset dissipation.
Summary
The Bombay High Court considered IIFL Finance Limited's petition for interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, after the respondents failed to appear, did not file a reply, and ignored a court order to disclose their assets. The petitioner produced the loan agreement, recall notice and a statement of outstanding dues, which the respondents did not dispute. Relying on the Supreme Court’s decision in Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel (India) Ltd., the court examined whether the respondents' conduct could justify interim relief despite the lack of direct proof of asset alienation. The court held that the respondents' non‑compliance created a reasonable apprehension that assets might become unavailable, warranting protection of the subject matter of arbitration. Consequently, the court modified its earlier order to grant the interim protection sought.
Issues considered
- Whether interim protection under Section 9 of the Arbitration and Conciliation Act, 1996 can be granted when respondents are absent and have not disclosed assets.
- Whether the respondents' non‑compliance and conduct can be considered in lieu of direct evidence of asset transfer for granting interim relief.
- Whether strict compliance with procedural requirements of the Code of Civil Procedure is necessary for granting interim protection.
Legislation cited
Subjects
- Arbitration
- Section 9
- interim relief
- asset disclosure
- non‑compliance
- enforcement of award
- Supreme Court precedent
- Code of Civil Procedure
Judgment
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION NO. 918 OF 2025
ATUL IIFL Finance Limited … Petitioner
GANESH V/s.
KULKARNI
Digitally signed by
Maa Vaishno Mobile Centre & Ors. … Respondents
ATUL GANESH
KULKARNI
Date: 2026.09.09 WITH
16:23:48 +0530
COMM ARBITRATION PETITION NO.718 OF 2025
IIFL Finance Limited … Petitioner
V/s.
M.M. Metal & Others … Respondents
WITH
COMM ARBITRATION PETITION NO.842 OF 2025
IIFL Finance Limited … Petitioner
V/s.
Tez Cargo Logistics & Ors. … Respondents
WITH
COMM ARBITRATION PETITION NO.358 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Jai Bhawani Steel Agency & Ors. … Respondents
WITH
COMM ARBITRATION PETITION NO.294 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Kutumbh HR Care Pvt. Ltd. & Ors. … Respondents
WITH
COMM ARBITRATION PETITION NO.846 OF 2025
IIFL Finance Limited … Petitioner
V/s.
Ankit Choudhary& Anr. … Respondents
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WITH
COMM ARBITRATION PETITION NO.408 OF 2026
IIFL Finance Limited … Petitioner
V/s.
India Metal Crop & Ors. … Respondents
WITH
COMM ARBITRATION PETITION NO.415 OF 2026
IIFL Finance Limited … Petitioner
V/s.
T.M. Enterprises & Ors. … Respondents
WITH
COMM ARBITRATION PETITION NO.164 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Jyotirling Kirana Stores … Respondent
WITH
COMM ARBITRATION PETITION NO.238 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Deevena Enterprises & Anr. … Respondents
WITH
COMM ARBITRATION PETITION NO.293 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Siddharth Trading & Another … Respondents
WITH
COMM ARBITRATION PETITION NO.263 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Surya Narayan Filling Station & Anr. … Respondents
WITH
COMM ARBITRATION PETITION NO.533 OF 2026
IIFL Finance Limited … Petitioner
2
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V/s.
Soham Engineering & Anr. … Respondents
WITH
COMM ARBITRATION PETITION NO.534 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Opel Industries & Another … Respondents
WITH
COMM ARBITRATION PETITION NO.363 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Jay Shree Shakti Ma Precast & Anr. … Respondents
WITH
COMM ARBITRATION PETITION NO.264 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Mukesh Kumar & Co. & Another … Respondents
WITH
COMM ARBITRATION PETITION NO.265 OF 2026
IIFL Finance Limited … Petitioner
V/s.
Singla CCTV & Security System & Anr. … Respondents
Mr. Vyapak Desai with Mr. Jitesh Mundhwa, Ms. Shital
Londhe and Ms. Varsha Singh for the Petitioner-IIFL.
CORAM : AMIT BORKAR, J.
DATED : SEPTEMBER 9, 2026
P.C.:
1. Suo motto taken on board for speaking to the minutes of the
order dated 27 August 2026.
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2. Substitute paragraph 13 of the order dated 27 August 2026
with the following paragraphs:
“13. Learned Advocate for the Petitioner has also relied
upon the conduct of the Respondents after filing of the
present Petition. It is submitted that though the Respondents
were served, they have not remained present before this
Court. More importantly, this Court had directed the
Respondents to disclose details of their movable and
immovable properties and other financial particulars. That
direction was issued so that this Court could see whether any
interim protection was necessary. Even that order has not
been complied with.
14. When this Court passes an order, parties are expected
to follow the same unless there is some legal reason. If one
party remains absent and also does not disclose its assets
despite direction of the Court, such conduct can be taken
into consideration while deciding an application under
Section 9. This conduct alone may not prove dishonest
intention. Even then, it creates a reasonable apprehension
that if no interim protection is granted now, then even if the
Petitioner succeeds in arbitration, enforcement of the award
may become difficult later.
15. The judgment of the Supreme Court in Essar House (P)
Ltd. v. Arcellor Mittal Nippon Steel (India) Ltd ., (2022) 20
SCC 178 holds that while deciding a petition under Section
9, the Court has to keep in mind the basic principles of the
Code of Civil Procedure. At the same time, every technical
provision of the Code need not be applied strictly. The object
of Section 9 is to protect the subject matter of arbitration and
to ensure that justice is not defeated. The Supreme Court has
further held that Section 9 gives wide powers to the Court
for securing the amount in dispute. While considering such
application, the Court has to see whether the applicant has
made out a good prima facie case, whether the balance of
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convenience is in favour of interim protection and whether
the applicant has approached the Court without unnecessary
delay. The Supreme Court has also clarified that interim
relief cannot be refused only because the pleadings do not
satisfy every technical requirement relating to attachment
before judgment under the Code of Civil Procedure. The
Supreme Court has also observed that in every case the
applicant is not required to prove actual transfer or disposal
of assets. If the material before the Court shows a strong
possibility that the assets may become unavailable or that the
arbitral award may become difficult to enforce, appropriate
interim protection can still be granted. Therefore, the Court
has to see the overall circumstances of the matter and need
not insist upon direct proof of every intended transfer.
16. Keeping these principles in mind, this Court finds that
the Petitioner has produced the Loan Agreement, the Loan
Recall Notice and the statement showing the outstanding
dues. No reply has been filed disputing these documents. The
Respondents have not denied the transaction or their liability
before this Court. More importantly, after service of the
Petition, they remained absent and also failed to comply with
the order directing disclosure of their assets. This conduct
makes the present matter different from an ordinary money
recovery case where the defendant appears and contests the
claim.
17. It is true that the Petitioner has not produced direct
evidence showing that the Respondents have transferred
their properties. If this circumstance is considered, the
material may appear insufficient. However, the law declared
by the Supreme Court holds that proof of completed
alienation is not necessary in every matter. This Court has to
see all surrounding circumstances together. Continuous
default in repayment, absence before this Court, failure to
file reply and non-compliance with the order directing
disclosure of assets together create a reasonable
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apprehension that if interim protection is not granted, the
Petitioner's claim may finally remain unsecured.”
3. Paragraphs 14 and 15 be renumbered.
4. Original order dated 27 August 2026 be corrected
accordingly and upload the same as order No.2 in this group of
matters.
(AMIT BORKAR, J.)
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