HC appoints court receiver for gym equipment of Talwalkars

The Bombay high court (HC) has appointed a court receiver for all equipment and machinery of fitness provider Talwalkars Health Club Limited after it defaulted on

The Bombay high court (HC) has appointed a court receiver for all equipment and machinery of fitness provider Talwalkars Health Club Limited after it defaulted on payments towards a loan of ₹36.85 crore from Tata Capital Financial Services Limited.

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Talwalkars had defaulted in making a payment of ₹2.64 crore following which Tata Capital approached the HC seeking directions to recover the outstanding dues through an arbitration petition. The financial firm also sought an injunction against Talwalkars from selling or alienating all lease goods/gym equipment, which the court allowed.

The bench of justice Gautam Patel, while hearing the petition filed by Tata Capital, was informed that the finance company had entered into lease agreements in 2014 and 2016, to enable Talwalkars to buy gym equipment. A master lease agreement was also entered into in 2018 for the same. Tata Capital had disbursed ₹36.85 crore towards these agreements. In 2018, Talwalkars demerged and Talwalkars Lifestyles took over the business from Talwalkars Better Value, along with its liabilities. An agreement with regards to the liabilities was made between Tata and Talwalkars in 2019.

However, as there was a default in repayment by Talwalkars to the extent of ₹2.64 crore, Tata issued them a notice in September, but the fitness company failed to respond. Tata then approached the HC invoking the arbitration clause of the lease agreement.

On its part, Talwalkars submitted that it was in some financial difficulties and was trying to resolve it with other creditors. In light of this, the company had no objection to the appointment of a court receiver for all items of machinery. Talwalkars also submitted a list of locations pan-India, with details of various items of gym equipment and machinery.

“The court receiver, high court, Bombay, therefore stands appointed of all the equipment, plant and machinery and all movables listed in the affidavit,” the court observed. It further restrained Talwalkars from selling, transferring, disposing of lease goods/gym equipment till the arbitral proceedings got underway. The matter has next been posted for hearing on January 13, 2020.