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New Morning Star Travels vs Volkswagen Finance Private


New Morning Star Travels v. Volkswagen Finance Private  [i]



 The facts of this case date back to 28th November 2018 when the petitioner is a company that runs a bus service. Under loan-cum-hypothecation agreement the company purchased 16 vehicles and entered into an agreement with the respondent on 28th November 2018. The loan was repayable in 54 months. The agreement the parties entered contained an arbitration clause. The petitioner defaulted in payment of a certain installment of the loan. The petitioner then came to know that the respondent filed 16 petitions under section 9 of the arbitration and conciliation act in which the impugned order has been passed. The 16 petitions filed by the Respondent under Section 9 of the Arbitration and Conciliation Act, 1996 in which impugned orders were passed are identical in almost all respects. The said 16 petitions have been disposed of on the very first day of the hearing, without issuing notice in the petitions to the Petitioner. Further, coercive orders have also been passed, permitting the Respondent to take possession of the vehicles of the Petitioner.

The Petitioner’s total dues are to the tune of Rs. 87 lakhs. The petitioner’s grievance is that the Section 9 petitions have been disposed of without notice and coercive orders of possession have been passed, without even hearing the Petitioner.


The issue, in this case, is that petitions under section 9 passed coercive orders without even hearing the petitioner.



The judgment of this case says that an examination of the impugned orders showed that the said orders have been passed in almost identical terms. As per the said orders, the petitions under Section 9 of the Act were accompanied by an application for interim ex-parte relief till the arbitration proceedings are concluded. The orders record that the loan-cum-hypothecation agreement was executed. Loan recall notices were issued by the Respondent and the Petitioner was called upon to pay the balance amount of Rs. 71,39,808. On the bottom that the Petitioner didn't pay the said amount.

Thus, while handling the appliance for ad-interim ex-parte relief, most petition under Section 9 of the Act was disposed of, without calling upon the Petitioner to even file a reply. No hearing was afforded to the Petitioner.

Section 9 of the arbitration and conciliation act petitions cannot be disposed of ex-parte, without giving notice to the respondent therein, especially when coercive orders are being passed. The court needs to have issued notice to the Petitioner, afforded a hearing, then passed appropriate orders in accordance with the law.

Thus, the court inclined to set aside the impugned orders and remand the matter back to the Commercial Court. The Petitioner undertakes to pay to the Respondent a sum of Rs.25 lakhs within one week. The payment to be made shall be made through a regular channel.

The court thus held that the present petition, along with all pending applications, was disposed of.


This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. 

  • Case Analysis on New Morning Star Travels vs Volkswagen Finance Private
  • Section 9 of the Arbitration and Conciliation Act
  • coercive orders passed without even hearing the petitioner.

BY : Anupama. P

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