Ugro Capital Limited vs Trucap Finance Limited & Anr.

Court
Delhi High Court

$~52
* IN THE HIGH COURT OF DELHI AT NEW DELHI
# CNR No. DLHC010403312026
+ O.M.P.(I) (COMM.) 371/2026 & I.A. 23494/2026
UGRO CAPITAL LIMITED .....Petitioner
Through: Mr. Jayant Mehta, Ms. Monisha
Handa, Mr. Mohit D. Ram, Ms.
Mansvini Jain, Mr. Arnav
Chaudhary, Advs.

versus

TRUCAP FINANCE LIMITED & ANR. .....Respondents
Through: Mr. Utkarsh Joshi, Mr. Sharian
Mukherji, Mr. Vinay Thakur
and Ms. Sudarshana
Bandyopadhyay, Advs.
CORAM:
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT(ORAL)
% 01.09.2026

1. This petition has been filed under Section 9 of the Arbitration
1
and Conciliation Act, 1996 , seeking interim measures of protection
via direction to Respondent No. 1 to furnish security that it has failed
to furnish as per the terms of the Business Partnership Agreement
2
dated 20.10.2022 executed between the Petitioner and Respondent
No. 1, and to furnish replacement security in place of the security
which has been furnished but cannot be encashed by the Petitioner,
pending constitution of the Arbitral Tribunal.


1
“the Act” hereinafter
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 1 of 6

2. The Petitioner and Respondent No. 1 are both non-banking
financial Companies. By the subject agreement, the Petitioner and
Respondent No. 1 entered into a co-lending arrangement to jointly
grant loans to borrowers in the agreed ratio. Respondent No. 2 is the
Bank with which Respondent No. 1 furnished a lien-marked fixed
deposit in favour of the Petitioner. No substantive relief being claimed
against Respondent No. 2.

3. Under Clause 5.4 of the Agreement read with Schedule X
thereto, Respondent No. 1 was obliged to furnish a First Loss Default
3
Guarantee to the Petitioner, in two components, namely a lien-
4
marked fixed deposit to the extent of 5% of the monthly portfolio
5
outstanding, and a Corporate Guarantee to the extent of 5% of the
quarterly portfolio outstanding.

4. Against the FD required under the Agreement, Respondent No.
1 furnished an FD of only Rs.1,75,00,000/-, leaving a shortfall in the
FD component, and failed to furnish any CG except a part payment of
Rs.1,27,00,000/- paid in January 2024, leaving a shortfall of
Rs.1,09,00,000/- in the CG component.

5. The aggregate FLDG shortfall of Rs.1,70,00,000/- was
communicated by the Petitioner to Respondent No. 1 on 30.01.2025.
Respondent No. 1 on 31.01.2025, without disputing its obligation of
furnishing the FLDG, sought the updated calculation of FLDG from

2
“the agreement” hereinafter
3
“FLDG” hereinafter
4
“FD” hereinafter
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 2 of 6

the Petitioner and undertook to escalate the matter to its Management
but has till date not made good the shortfall.

6. When the Petitioner sought to invoke the FD component of the
FLDG vide its letter dated 16.07.2025, it was informed by Respondent
No. 2 that such FD can’t be encashed on account of an alleged order
of stay passed by another Court in other proceedings restraining the
encashment of securities furnished on behalf of Respondent No. 1.

7. The Petitioner is not a party to such proceedings and has no
direct knowledge regarding any alleged stay order. The security
furnished by Respondent No. 1 has there been rendered incapable of
invocation by the Petitioner.

8. The submission of the learned Senior Counsel for the Petitioner
is that the financial condition of Respondent No. 1 has, in the
meanwhile, deteriorated. Respondent No. 1 has defaulted in the
servicing of its own borrowings, its credit rating is lowering and it has
reported mounting losses.

9. The obligation of Respondent No. 1 towards FLDG being an
admitted and undisputed obligation, the Petitioner apprehends, on
reasonable grounds that unless Respondent No. 1 is directed to secure
the amounts in question, any award that the Petitioner may obtain in
the intended arbitration will be reduced to a paper decree.


5
“CG” hereinafter
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 3 of 6

10. Disputes and differences within the meaning of Clause 21 of the
agreement have arisen between the parties, the seat, place and venue
of arbitration being at Delhi. The Petitioner intends to invoke
arbitration and has approached this Court, in the meanwhile, under
Section 9 of the Act.

11. Having heard learned Senior counsel for the Petitioner and
perused the petition along with the documents annexed thereto, this
Court is satisfied that the balance of convenience lies in favour of the
Petitioner, and that unless the Petitioner is protected by way of interim
measures, the Petitioner would be exposed to irreparable harm
inasmuch as any Award that may be passed in the intended arbitration
would be reduced to a paper decree.

12. At this stage, learned Counsel appearing for the Respondent has
submitted that he has no objection that dispute can be referred to
arbitration.

13. Accordingly, Ms. Manisha Suri, Advocate (Mob. No.
9810075174) is appointed as a learned Sole Arbitrator to adjudicate
the disputes arisen between the parties. The learned Sole Arbitrator
shall enter upon the reference within three weeks from today.

14. The learned Sole Arbitrator will proceed to the arbitration
proceedings subject to furnishing requisite disclosures as required
under Section 12(2) of the Act within three weeks of entering
reference.
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 4 of 6

15. The arbitration shall be carried under the rules and aegis of
Delhi International Arbitration Centre (“DIAC”). The learned
Arbitrator shall be entitled to fees as per the Schedule of Fees
maintained by the DIAC.

16. It shall be open to the parties to raise all pleas, including
objection as to arbitrability and jurisdiction, before the learned Sole
Arbitrator who shall decide the same in accordance with law.

17. It is clarified that the observations made herein are only for the
purpose of deciding the present petition. The learned Sole Arbitrator
shall adjudicate the disputes with claims and counter claims
independently and on their own merits, uninfluenced by any
observations contained in the present order.

18. The Registry is directed to send a receipt of this order to Ms.
Manisha Suri, learned Arbitrator through all permissible modes
including email.

19. Lastly, in view thereof, Respondent, whether by itself, its
Directors, officers, servants or agents are restrained from creating any
third party right or encumbrance over or otherwise for disposing of
assets to the extent of Rs.1.70 crores.

20. Upon constitution of the Arbitral Tribunal, the present petition
shall be treated as an application under Section 17 of the Arbitration
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 5 of 6

and Conciliation Act, 1996 and shall be placed before the learned sole
arbitrator for consideration in accordance with law.


21. The interim arrangement directed by this Court shall continue
until the learned sole arbitrator considers the matter and passes
appropriate orders thereon.

22. It shall be open to the learned Arbitral Tribunal, upon
consideration of the matter on its own merits, to continue, modify,
vary or vacate the aforesaid interim arrangement.

23. All rights and contentions of the parties are left open and
nothing contained in this order shall be construed as an expression of
opinion on the merits of the disputes.

24. The petition, along with the pending application(s), is disposed
of in the aforesaid terms.

OM PRAKASH SHUKLA, J
SEPTEMBER 1, 2026/at


Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:05.09.2026
18:59:35
O.M.P.(I) (COMM.) 371/2026 Page 6 of 6