A lender’s employee may be appointed as party receiver to repossess a hypothecated vehicle.

Tata Capital Limited applied under Section 9 of the Arbitration and Conciliation Act, 1996, seeking appointment of its employee as Party Receiver to repossess a Ford Figo Aspire hypothecated by borrower Noushad Areekan.

The Court recorded that the loan agreement, dated 25 November 2022, contained an arbitration clause; the lender claimed ₹1,94,615 was due and alleged the borrower was not clearing the dues or permitting peaceful repossession.

Despite service of private notice, the respondent did not appear.

Whether, in the circumstances presented, a Party Receiver should be appointed under Section 9 to repossess the hypothecated vehicle.

Whether the Receiver could be authorised to seek police assistance and, where necessary, open locked premises or arrange access to the vehicle for repossession.

The Court acted under Section 9(1)(ii)(b), (d) and (e) of the Arbitration and Conciliation Act, 1996, which empowers a court to grant interim measures, including securing the amount in dispute, appointing a receiver, and granting other measures it considers just and convenient.

The application also invoked Order XIV Rule 8 of the Original Side Rules. The order cites no precedent.

The Court recorded the loan agreement’s arbitration clause, the claimed default and the lender’s apprehension that the vehicle could not be repossessed peacefully; it considered that apprehension reasonable.

In light of those circumstances and the respondent’s non-appearance, the Court found it just and necessary to appoint the lender’s employee as Party Receiver.

To facilitate repossession, it authorised the Receiver to seek police assistance if faced with resistance and to open locked premises or arrange towing or mechanical assistance where required.

The order also provided for police assistance, access to locked premises, and an opportunity for the parties to settle.

The application was disposed of on those terms, with the Receiver’s mandate continuing until further orders.