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Sarika Chaturvedi vs Agarwal Auto Traders & Ors on 8 July, 2022

Author: Anup Jairam Bhambhani

Bench: Anup Jairam Bhambhani

                          $~6
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     O.M.P. (T) (COMM.) 47/2020
                                SARIKA CHATURVEDI                                   ..... Petitioner
                                                      Through:     Mr. Natwar Rai, Advocate.

                                                      versus

                                AGARWAL AUTO TRADERS & ORS.                         ..... Respondents
                                                      Through:     Ms. Vipin Gupta and Mr. Krishna
                                                                   Kumar, Advocates.

                                CORAM:
                                HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
                                                      ORDER

% 08.07.2022 By way of the present petition filed under section 15(2) of the Arbitration & Conciliation Act 1996 ('A&C Act' for short), the petitioner seeks substitution of the arbitrator, by reason of the circumstance that vidé communication dated 30.08.2019, the learned Sole Arbitrator who was appointed in the matter under clause 5 of loan agreement dated 09.12.2016 between the parties, has recused from the proceedings.

2. Notice on this petition was issued on 08.09.2020; but despite lapse of almost 02 years, no reply is forthcoming on record. It appears however, that a copy of a reply has been furnished to learned counsel for the petitioner.

3. Mr. Natwar Rai, learned counsel for the petitioner submits that there is admittedly an arbitration agreement between the parties as Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:12.07.2022 O.M.P. (T) (COMM.) 47/2020 Page 1 of 4 15:01:39 comprised in clause 5 of the loan agreement; and had it not been for the learned Sole Arbitrator named therein having recused from the matter, the respondents would have participated in the arbitral proceedings before him.

4. Ms. Vipin Gupta, learned counsel for the respondents submits that their principal objection is to the existence of the loan agreement itself. In fact, Ms. Gupta goes a step further, to state that there was no transaction of loan between the parties at all.

5. Be that as it may, Mr. Rai points-out that as a matter of fact, there is documentary basis to the transaction and the dispute between the parties; and that the quantum of the dispute is about Rs. 10 lacs.

6. The petitioner has filed on record a copy of loan agreement dated 09.12.2016 which prima-facie appears to have been signed between the parties. Clause 5 of the loan agreement contemplates resolution of disputes by arbitration under the A&C Act and names a Sole Arbitrator for the purpose. It also appears from the record that a notice dated 19.12.2018 invoking arbitration was issued by the petitioner, which though addressed to the named arbitrator, was copied to the respondents; and that pleadings in the arbitral proceedings were completed and the respondents even filed a counter-claim before the learned Sole Arbitrator.

7. It was in this backdrop that the respondents made a written request vidé communication dated 29.08.2019 to the learned Sole Arbitrator to recuse from the proceedings, which the learned Sole Arbitrator did vidé communication dated 30.08.2019.

8. Upon a conspectus of the foregoing, in the opinion of this court, there is no merit in the objections raised by the respondents and the present petition requires to be allowed.

9. The petition is accordingly allowed.

10. At this stage, Ms. Gupta, learned counsel for the respondents submits that the court may appoint a substitute arbitrator, leaving open the rights and contentions of the parties to be raised before such arbitrator.

11. Accordingly, recording the recusal of the learned Sole Arbitrator appointed earlier, this court appoints Ms. Warisha Farasat, Advocate (Ph. No. 9953825580) as the learned Sole Arbitrator to adjudicate upon the disputes that have arisen between the parties.

12. The learned Sole Arbitrator shall proceed with the matter from the stage at which the earlier arbitrator left the proceedings, subject to furnishing to the parties requisite disclosures under section 12 of the A&C Act; and in the event there is any impediment on that count, the parties are given liberty to file before this court an appropriate application for that purpose.

13. The learned Sole Arbitrator shall be entitled to arbitrator's fee as per the Fourth Schedule to the A&C Act; or as may otherwise be agreed to between the parties and the learned Sole Arbitrator.

14. Parties are directed to approach the learned Sole Arbitrator within 10 days.

15. All rights and contentions of the parties in relation to their inter-se disputes are left open, to be decided by the learned Sole Arbitrator, in accordance with law.

16. The petition stands disposed of in the above terms.

17. Pending applications, if any, also stand disposed of.

ANUP JAIRAM BHAMBHANI, J JULY 8, 2022 ds Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:12.07.2022 O.M.P. (T) (COMM.) 47/2020 Page 4 of 4 15:01:39