Bombay High Court Appoints Receiver To Take Possession Of Medical Equipment Financed By Siemens
The Bombay High Court on 19 October appointed a Court Receiver to take physical possession of medical equipment financed by Siemens Financial Services Private Limited through a Rs. 1.05 crore loan, following repeated repayment defaults by borrower Nadeem Ahmad Khandey.
A Single Bench comprising Justice Amit Borkar directed the Receiver to hand over the equipment to Siemens for custody pending arbitration, while prohibiting its sale, auction, transfer or dismantling. He observed:
“The order is not being passed on the basis of any finding of fraud or a proved attempt to defeat the arbitration proceedings. It is being passed because of the contractual security, the continued defaults, the failure to hand over possession and the need to preserve the machinery until the dispute is decided.”
Siemens sanctioned and disbursed Rs. 1.05 crore to Khandey under a Finance Agreement dated 19 December 2023, to purchase a medical imaging system described as “Somatom Go Now Compact with accessories”. The loan was repayable over 72 months at an annual interest rate of 11.50%, with the equipment hypothecated to Siemens as security.
After repeated defaults, Siemens classified the loan account as a Non-Performing Asset on 27 November 2024. It issued a pre-litigation notice on 27 November 2025, claiming outstanding dues of Rs. 1,06,58,167.
On 23 February 2026, Khandey issued a surrender letter expressing his willingness to hand over the machinery because he could not regularise the loan account. However, he did not surrender the equipment.
Siemens recalled the loan and invoked arbitration on 13 May 2026. Claiming outstanding dues of Rs. 1,22,61,244 as of 2 June 2026, along with default interest at 36% per annum from 3 June, it approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, on 8 July 2026, seeking interim protection of the equipment.
It relied on Clause 8(b) of the Finance Agreement, which permitted it to take possession of the secured machinery following an unremedied default. It also cited communications acknowledging financial difficulties and Khandey's failure to surrender the equipment despite his undertaking.
Opposing the petition, Khandey argued that taking possession would bring the medical centre's operations to a standstill because the equipment was its principal source of income. He submitted that he had already repaid Rs. 24,96,328 and disputed the claimed default interest of 36% per annum.
He also relied on a 30 May 2026 order of the Kulgam Civil Court restraining the creation of third-party interests in the CT Scan Unit. Guarantor Dr. Manzoor Ahmad Dar supported the appointment of a Receiver.
The Bench held that financial difficulties alone did not justify appointing a Receiver. However, the repeated defaults, loan recall, surrender letter and failure to hand over possession provided sufficient grounds to preserve the secured machinery pending arbitration.
It clarified that taking possession would not determine the outstanding liability or the enforceability of the claimed default interest. It also held that the proceedings before the Kulgam Civil Court did not prevent Siemens from seeking interim protection.
Accordingly, the High Court appointed the Bombay High Court Receiver to take physical possession of the machinery, prepare an inventory and hand it over to Siemens solely as custodian on behalf of the Court, with police assistance if necessary.
It prohibited the sale, auction, transfer or dismantling of the equipment and directed Siemens to commence arbitration within the prescribed statutory period if proceedings had not already begun.
Appearances for Siemens Financial Services Private Limited: Advocates Anoshak Daver, Khushboo Rupani, Gaurav Jain and Sharan Shetty, instructed by India Law LLP.
Appearances for respondents (Nadeem Ahmad Khandey and Hameem Rashid): Advocates Aayushi Chauhan and Manindra Pandey.
Appearances for respondent (Dr. Manzoor Ahmad Dar): Advocate Sanjay Kumar Lalit.