Madras High Court
Deepak V Lohia vs M/S.Daimler Financial Services India ... on 9 January, 2020
Author: P.T.Asha
Bench: P.T.Asha
O.P.No.5 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.01.2020
CORAM
THE HONOURABLE Ms.JUSTICE P.T.ASHA
O.P.No.5 of 2019
1.Deepak V Lohia
2.The Qualityiron & Steelworks Private Limited,
No.1132, E-Prabhu Chhaya, Sykes,
Extension Kolhapur,
Maharashtra - 416 001. ... Petitioners
-Vs.-
M/s.Daimler Financial Services India Private Limited,
rep.by its authorised representative
having its Registered Office at
Unit 202, Campus 3B,
RMZ Millennia Business Park,
No.143, Dr.MGR Road,
Perungudi,
Chennai - 600 096. ... Respondent
Prayer: Original Petition filed under Section 34 of the
Arbitration and Conciliation Act, 1996 praying to set aside the
Arbitration Award passed on 24.04.2018 by the learned
Arbitrator in A.C.P.No.10 of 2018.
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O.P.No.5 of 2019
For petitioner : Mr. H. Karthik Seshadri
For Respondents : Mr.D. Pradeep Kumar
ORDER
The respondents before the Arbitral Tribunal are the petitioners before this Court in the petition filed under Section 34 of the Arbitration and Conciliation Act (hereinafter referred to as the Act).
2.The brief facts preeceding the filing of the above petition are as follows:
The respondent herein is a non-banking Financial Company registered under the Companies Act, 1956. The petitioners herein had approached the respondent in the month of October 2015 with a request to provide financial assistance for the purchase of a new Mercedez Benz Vehicle.2/9
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3.Pursuant to the negotiations held between the petitioners and the respondent, a Loan-cum-hypothecation Agreement was entered into between the petitioners herein and the respondent. Under the said Agreement, a sum of Rs.1,23,12,460/- was extended as financial assistance. This amount was subject to the petitioners repaying the amount financed in 60 monthly installments. The Agreement made it clear that any default would contract additional charges at 5% per annum. The terms of the Agreement further stipulated that the first installment was payable on 18.10.2015 and the last installment was payable on 18.09.2020.
4.The petitioners were highly irregular in repayment of the lease rentals and despite the repeated oral request and personal visits of the respondent's staff, the petitioners did not come forward to pay the amounts. This constrained the respondent to issue the foreclosure notices which also invoked no response. Thereafter, the vehicle was repossessed and sold. As on 3/9 http://www.judis.nic.in O.P.No.5 of 2019 25.11.2017, the petitioners were due and payable a sum of Rs.61,62,097/- on 19.01.2018. The respondent had issued a notice to the petitioners calling upon them to make the payment.
5.Thereafter, by letter dated 06.02.2018, the respondent had informed the petitioners about the appointment of a named Arbitrator. The learned Arbitrator had on entering appearance taken steps to serve the petitioners herein and despite service of notice upon petitioners, there was no response. The petitioners had not chosen to participate in the Arbitral proceedings. Ultimately, they were set ex parte and an Arbitral Award came to be passed on 26.04.2018. It is challenging this Award that the petitioners are before this Court.
6.Heard Mr.H. Karthik Seshadri, learned counsel appearing for the petitioners, who would submit that no notice whatsoever has been received by the petitioners from the Arbitrator. He would further contend that the 1st petitioner was suffering from 4/9 http://www.judis.nic.in O.P.No.5 of 2019 an Alcoholic addiction with behavioural issues and he was hospitalized as inpatient from 27.07.2017 to 27.03.2018 and therefore, it is the case of the petitioners that the learned Arbitrator has not taken steps to serve on them. He would further contend that the Arbitrator had not disclosed the facts that he is required under Section 12(1) of the Act. He would therefore contend that in these circumstances, an ex parte Award has to be set aside.
7.Per contra, Mr.V.Pradeep Kumar, who appeared on behalf of the respondent Finance Company, would contend that the petitioners have been served with notice dated 19.01.2018 and also the notice dated 06.02.2018 informing the petitioners about the appointment of the named Arbitrator. The claim statement was filed by the respondent on 13.02.2018 which was also forwarded to the claimants. He would therefore contend that the petitioner, who has been put on notice about every hearing, did not bother to participate in the proceedings and the reasons given for the non-appearance are not true. 5/9 http://www.judis.nic.in O.P.No.5 of 2019
8.Heard the learned counsel appearing on either side and perused the original records called for from the Arbitrator.
9.The records of the Arbitrator would indicate that the notice dated 06.02.2018 which was sent by the respondent to the petitioners informing them about the appointment of the sole Arbitrator was received by both of them on 14.12.2018. The claim statement and the related documents as also the disclosure under Section 12(1) of the Act, was sent under cover of letter dated 17.02.2018 by the Arbitrator informing the respondents that the hearing would be on 16.03.2018. This letter has been received by both the petitioners on 23.02.2018. Since the respondent did not appear on 16.03.2018, though notice has been served, the Arbitrator gave them yet another notice dated 16.03.2018 which was received by the 2nd respondent on 27.03.2018, but the notice was not claimed by the 1st petitioner though intimation was delivered. The proceedings also kept the petitioners informed the next date of 6/9 http://www.judis.nic.in O.P.No.5 of 2019 hearing was 13.04.2018. On 13.04.2018, the petitioners were set ex parte and the ex parte evidence of the claimants was commenced and concluded.
10.The Arbitral Tribunal had reserved orders. This proceeding dated 13.04.2018 was also forwarded to the petitioners and the 2nd petitioner had received notice on 24.04.2018, but however, the 1st petitioner once again did not claim the same and intimation was given to him.
11.It appears that on 26.04.2018, the Award had been passed and despatched to the petitioners. once again, it was only the 2nd petitioner, who had received the cover and not the 1st petitioner. The contention therefore that the petitioners did not have notice of the proceedings is totally contrary to the available records. The contention that there is no disclosure as contemplated under 12(1) of the Act is also false. The records would reveal that the disclosure form had been forwarded to the petitioners under the cover of the Arbitrator's letter dated 7/9 http://www.judis.nic.in O.P.No.5 of 2019 17.02.2018. Therefore, the contentions raised by the petitioners require to be rejected. The petitioners have not made out any case calling for the interference by this Court in the Award passed by the Arbitrator under Section 34 of the Act. Consequently, this Original Petition is dismissed. No costs.
09.01.2020
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Index :Yes/No
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P.T. ASHA. J,
mps
O.P.No.5 of 2019
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