Delhi District Court
Cs No. 12048/2016 Sheela Sinha vs . Pradeep Vig on 27 February, 2018
CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig
IN THE COURT OF SH. SAURABH PRATAP SINGH LALER
ADDITIONAL DISTRICT JUDGE-01 (CENTRAL)
TIS HAZARI COURTS, DELHI.
CS No. 12048/2016
SHEELA SINHA
Wife of Sh. Ajit Kumar Sinha
C-102, Eden Towers, Plot No.20,
Sector-5, Dwarka, Delhi
.......PLAINTIFF
VERSUS
1. PRADEEP VIG
Proprietor of M/s. Amba Leasing & Finance Co.
18/1021, Arya Samaj Road
Karol Bagh, New Delhi
2. YOGESH K. VERMA
Sole Arbitrator
Chamber No.547, Western Wingh
Tis Hazari Courts, Delhi
......DEFENDANTS
J U D G M E N T
(Deciding objections under Section 34 of Arbitration & Conciliation Act 1936 against
award dated 09.05.2014 passed by learned Arbitrator Sh. Yogesh Kumar Verma)
1. Date of institution : 08.08.2014
2. Date of Final Order : 27.02.2018
3. Final Order : Award set aside.
1. Petitioner / borrower has filed objections under Section 34 of
Arbitration & Conciliation Act for setting aside award dated
09.05.2014 passed by Learned Arbitrator in favour of respondent
No.1 / creditor.
2. AWARD 2.1. There is an arbitration clause in the Loan Agreement Page No. 1 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig between the parties. Which is reproduced as under:-
"Any and all disputes, differences and / or claims arising out of or in connection with this Agreement of its performance shall be settled by Arbitration to be held in New Delhi, in accordance with the provisions of the ARBITRATION AND CONCILIATION ACT, 1996 or any statutory amendments thereof and shall be referred to the Sole Arbitration of Mr. Ashish K. Mishra or in case of his death, refusal, neglect inability or incapability to act as an Arbitrator to the Sole Arbitration of Mr. Yogesh Verma. The reference to the Arbitrators shall be within the Clause, Terms and Conditions of This Agreement. The Arbitrator shall be competent to decide whether any matter of dispute or difference referred to his falls with the purview of Arbitration as provided for above / or for any matter relating to Arbitration under the ARBITRATION AND CONCILIATION 1996. The Award given by the Arbitrator shall be final and binding on all the part as concerned."
2.2. In view of the aforesaid arbitration clause, the dispute regarding repayment of loan taken by the petitioner from respondent No. 1 was referred to Learned Arbitrator Sh. Yogesh Kumar Verma vide reference dated 28.04.2011. 2.3. In the claim petition, respondent No.1 / claimant Sh. Pradeep Vig claimed to be proprietor of M/s. Amba Leasing & Finance and stated that the petitioner / borrower had taken loan of Rs.1,60,000/- for purchase of Bajaj TSR bearing Registration No. DL-1RJ-1407 by executing Loan Agreement and Hypothication Agreement dated 21.09.2007. The said loan was to be returned in 24 EMIs of Rs.8,800/- each, however, as the petitioner / borrower defaulted in making payment of installments, hence as on May 2011 she was under liability to pay sum of Rs.1,93,208/- to respondent No.1. Respondent No.1 / creditor, therefore, claimed aforesaid amount of Rs.1,93,208/- alongwith interest from the petitioner / borrower.
Page No. 2 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig 2.4. As per record of arbitration, the petitioner / borrower appeared before the Learned Arbitrator on 06.07.2011 and reply to the claim was filed on 09.09.2011, in which the petitioner alleged that the loan documents dated 21.09.2007 are forged and fabricated and that no such documents were ever executed by petitioner. She also challenged the appointment of Arbitrator on the ground that no contract dated 21.09.2007 was executed between the parties1. She also denied having received any loan from respondent No.1. She further objected to the claim of respondent No.1 on the ground that M/s. Amba Leasing Finance Company is a company under the Companies Act, as per the documents filed by respondent No.1 and as such the claim could not have been filed by Pradeep Vig in his individual capacity. She also claimed that respondent No.1 is not entitled to the claim, as his claim is barred by Section 3 of Punjab Registration of Money Lenders Act 1938, as applicable to Delhi, as he does not have any license to lend money. She also submitted that she had purchased the vehicle in question in September 2007 through M/s. Balaji Auto Deals (Proprietor Sh. Gyan Singh), who had agreed to get the said vehicle financed and the said proprietor Sh. Gyan Singh got financed Rs.1,30,000/- and had obtained the signatures of the petitioner on some blank papers for the said purpose, which have been misused by respondent No.1. She further claimed that she had already 1 Relevant portion "There is no contract dated 21.09.2007 for the said vehicle and for appointment of the name of Yogesh Kr. Verma Arbitrator."
Page No. 3 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig repaid the said amount alongwith interest by paying Rs.1,59,600/- to Sh. Gyan Singh and respondent No.1 from November 2007 to March 2010 and that balance amount of Rs.25,650/- is due to be paid.
2.5. That subsequently aforesaid vehicle was due for fitness test on 23.10.2008, hence, the respondent visited MLO, Burari for the same and there she came to know that for the fitness written consent of financier i.e. respondent No.1 is required. Accordingly she went to the office of respondent No.1 and paid EMIs to respondent No.1 with effect from 17.12.2008 to 24.03.2010.
2.6. The petitioner has categorically stated on internal page 6 of her written submissions to the claim that though there has been delay in payment of installments, the petitioner regularly visited respondent No.1 asking him to give complete details of the amount pending, if any, against the vehicle in question and to give the NOC for releasing the said vehicle under hypothication since April 20102.
2.7. Learned Arbitrator framed 7 issues on 19.03.2012 and one additional issue on 29.05.2012. Evidence was lead by parties and arbitration award was passed on 09.05.2014 and on the same day copy of the award was received by the 2 The relevant para is reproduced as under: "That though there has been delay in payment of the instalments and the respondent since long had been visiting the office of the petitioner for giving the complete details of the amount pending, if any, against the vehicle in question, and to give the no objection certificate for releasing the said vehicle under hypothecation from the petitioner since April 2010. However, the petitioner had been delaying the same on one pretext or the other. Further the respondent had been asking of the documents signed by the Petitioner at the time of grant of vehicle loan and for complete statement of account."
Page No. 4 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig petitioner and the objections were filed under Section 34 of Arbitration & Conciliation Act, within limitation, on 08.08.2014. 2.8. By the aforesaid arbitration award dated 09.05.2014, the claim of respondent No.1 was allowed and he was held entitled to Rs.1,93,208/- alongwith interest @ 9% per annum from the date of filing of the claim till realization.
3. OBJECTIONS TO AWARD DATED 09.05.2014 Award dated 09.05.2014 has been challenged by the petitioner / borrower on the following grounds:-
3.1. That as per the arbitration clause, the dispute was to be referred to Mr. Ashish Kumar Mishra or in case of his death, refusal, neglect, inability or incapability to act as an Arbitrator, to the present Arbitrator namely Sh. Yogesh Kumar Verma.
However, without stating any reason for not referring the matter to Sh. Ashish Kumar Mishra, respondent No.1 referred the dispute to Sh. Yogesh Kumar Verma, hence, the award is liable to be set aside.
3.2. That as per the loan documents filed by respondent No.1, the loan was given by M/s. Amba Leasing Finance Company, whereas the claim was made by Mr. Pradeep Vig, who is an individual person and not duly authorized by the said company to file a claim.
3.3. That respondent No.1 failed to show that he had advanced loan of Rs.1,60,000/- to the petitioner, however, despite that the award was passed in favour of respondent No.1, hence, it is liable to be set aside.
Page No. 5 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig 3.4. That loan agreement was also not executed by petitioner and though respondent No.1 failed to prove the loan agreement, still the award was passed in his favour, hence, the award is liable to be set aside.
3.5. That respondent No.1 is not registered as a Money Lender under Punjab Registration of Money Lender's Act, hence, as per Section 3 of the said Act, he is barred from claiming the amount of loan, however, despite the said provision the award was passed in favour of respondent No.1, hence, the award is liable to be set aside. 3.6. That as per respondent No.1 the loan amount of Rs.1,60,000/- was paid in cash and not by banking mode, which is in violation of Section 269 SS of Income Tax Act, hence, the claim of respondent No.1 could not have been allowed.
4. REPLY TO OBJECTIONS As per order dated 13.11.2014, learned counsel for respondent submitted that he do not want to file reply to the objections and that he would straight away argue upon the objections. Hence, no reply was filed to the objections. However, during the course of arguments, learned counsel for respondent No.1 addressed arguments with respect to the aforesaid grounds.
5. Arguments on objections were addressed by Sh. Som Dutt Kaushik, learned counsel for petitioner and Sh. Vijay Sehgal learned counsel for respondent No.1 on 20.01.2018.
Page No. 6 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig ORDER ON OBJECTIONS
6. Appointment of Arbitrator:
6.1. Petitioner has submitted that as per the arbitration clause, the dispute was to be referred to Mr. Ashish Kumar Mishra or in case of his death, refusal, neglect, inability or incapability to act as an Arbitrator, to the present Arbitrator namely Sh. Yogesh Kumar Verma. However, without stating any reason for not referring the matter to Sh. Ashish Kumar Mishra, respondent No.1 referred the dispute to Sh. Yogesh Kumar Verma, hence, the award is liable to be set aside. 6.2. Respondent No.1 submitted that the disputed was referred to Sh. Yogesh Kumar Verma as Sh. Ashish Kumar Mishra was appointed as Judicial Officer.
6.3. As per Section 34 (2) (a) (v) of Arbitration & Conciliation Act 1996 an arbitral award may be set aside by the court, if the party making the application furnishes proof that the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with agreement between the parties. 6.4. In the claim filed before the learned Arbitrator or in the reference dated 28.04.2011, it is not stated that as to why the matter was not referred to Sh. Ashish Kumar Mishra as per the clause and as to why it was directly referred to Sh. Yogesh Kumar Verma, however, no objection as regards to the appointment of arbitrator was ever raised by the petitioner either in her reply to the claim or in her affidavit, during her evidence, or in the cross examination of PW-1 Sandeep Malik.
Page No. 7 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig The petitioner contested the claim of respondent No.1 during the arbitration proceedings without any objection as to appointment of Sh. Yogesh Kumar Verma as Arbitrator and now when the award has been passed against her, she is challenging the same on the ground that Sh. Ashish Kumar Mishra should have been appointed as Arbitrator. 6.5. In the opinion of the court the said objections is an after thought and the award cannot be set aside on the aforesaid ground raised by the petitioner.
7. Claim filed by unauthorized person:
7.1. Petitioner has submitted that as per the loan documents filed by respondent No.1, the loan was given by M/s. Amba Leasing Finance Company, whereas the claim was made by Mr. Pradeep Vig, who is an individual person and not duly authorized by the said company to file a claim. 7.2. The Arbitrator has given a specific finding while deciding issue No.4 that the claim petition has been filed by Sh.
Pradeep Vig, Proprietor of M/s Amba Leasing Finance Company, as proprietorship firm is not a legal entity in the eyes of Law.
7.3. The court has gone through the loan agreement. Though in para 1 of the Agreement it is stated that M/s. Amba Leasing Finance Company is company incorporated in Companies Act, but on each page of the agreement proprietor of M/s. Amba Leasing Finance Company has signed and affixed his stamp which mentions "For Amba Leasing & Page No. 8 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig Finance Company Proprietor".
7.4. Therefore, merely because on first para of the Loan Agreement it is mentioned that M/s. Amba Leasing Finance Company is a incorporated company, does not mean that it is an incorporated company, and the petitioner failed to prove the said fact before Learned Arbitrator by leading evidence. Therefore, the said ground is devoid of merits and the award cannot be set aside for the said reason.
8. Loan Agreement not executed; loan never disbursed and that loan agreement never proved.:-
8.1. Petitioner has submitted that respondent No.1 failed to show that he had advanced loan of Rs.1,60,000/- to the petitioner, however, despite that the award was passed in favour of respondent No.1, hence, it is liable to be set aside.
That loan agreement was also not executed by petitioner and though respondent No.1 failed to prove the loan agreement, still the award was passed in his favour, hence, the award is liable to be set aside.
8.2. Learned Arbitrator has discussed the evidence at length as regards the aforesaid objections and has given a finding of fact that there was a loan agreement between petitioner and respondent No.1 and that amount of Rs.1,60,000/- was also disbursed by respondent No.1 to the petitioner. 8.3. The said finding of the Learned Arbitrator cannot be interfered with as the petitioner in reply to the objections admitted that she paid EMIs to the respondent No.1 with Page No. 9 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig effect from 17.012.2008 till 24.03.2010 and therefore paid an amount of Rs.1,11,500/- to respondent No.13. 8.4. Further in her evidence, the petitioner has admitted her signatures on the loan agreement. Though she claimed that she had executed blank documents, but she failed to prove the said fact and the finding of the Learned Arbitrator in this regard cannot be interfered with in view of the limited scope of Section 34 of Arbitration & Conciliation Act 1996. 8.5. Similarly, the finding of the Learned Arbitrator as regards disbursal of the loan by the respondent No.1 in favour of petitioner can also not be interfered with. 8.6. It may be noted that the story of the petitioner that she signed blank documents to obtain loan of Rs.1,30,000/- at the behest of one Sh. Gyan Singh could not be proved by her before Learned Arbitrator and the said story is contrary to her own pleadings, as she submitted that though she had taken loan from Sh. Gyan Singh, she repaid amount of Rs.1,11,500/- to respondent No.1.
8.7. Therefore, the aforesaid grounds taken by the petitioner are devoid of merits and the award cannot be set aside for the said reasons.
9. Punjab Registration of Money Lender's Act:
9.1. Petitioner has submitted that respondent No.1 is not registered as a Money Lender under Punjab Registration of 3 Relevant portion from Page 6 is as under: "The respondent continued to pay EMI to the petitioner w.e.f. 17.12.2008 till 24.03.2010. In this way the respondent has paid Rs.1,11,500/ to the petitioner."
Page No. 10 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig Money Lender's Act, hence, as per Section 3 of the said Act, he is barred from claiming the amount of loan, however, despite the said provision, the award was passed in favour of respondent No.1, hence, the award is liable to be set aside. 9.2. As per Section 3 of Punjab Registration of Money Lender's Act 1938, a suit by a money lender for recovery of a loan shall be dismissed unless the money lender at the time of institution of the suit or at the time of decreeing the suit is registered and holds a valid license or holds a certificate from a Commissioner granted under Section 11 of the Act, specifying the loan in respect of which the suit is instituted or if he is not a registered and license money lender, satisfies the court that he has applied to the Collector to be registered and licensed and that such application is pending, provided that in such a situation the suit shall not be finally disposed of until the application of the money lender for registration is decided. The section is reproduced as under:-
"3. Notwithstanding anything contained in any other enactment for the time being in force, a suit by a money-lender for the recovery of a loan, or an application by a money-lender for the execution of a decree relating to a loan, shall after the commencement of this act, be dismissed, unless the money-lender-
(a) at the time of the institution of the suit or presentation of the application for execution; or
(b) at the time of decreeing the suit or deciding the application for execution-
(i) is registered; and
(ii) holds a valid licence, in such form and manner as may be prescribed; or
(iii) holds a certificate from a Commissioner granted under section 11, specifying the loan in respect of which the suit is instituted, or the decree in respect of which the application for execution is presented; or Page No. 11 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig
(iv) if he is not a registered and licensed money-lender, satisfies the Court that he has applied to the Collector to be registered and licensed and that such application is pending;
provided that in such a case, the suit or application shall not be finally disposed of until the application of the money-lender for registration and grant of license pending before the Collector is finally disposed of."
9.3. The term 'loan' and 'money lender' is defined in section 2 of the Act as under:-
"(8) "Loan" means an advance whether secured or unsecured of money or in kind at interest and shall include any transaction which the court finds to be in substance a loan, but it shall not include-
(i) an advance in kind made by a landlord to his tenant for the purposes of husbandry; provided the market value of the return does not exceed the market value of the advance as estimated at the time of advance;
(ii) a deposit of money or other property in a Government Post Office Bank, or any other Bank, or with a company, or with a co-operative society or with any employer as security from his employees;
(iii) a loan to, or by, or a deposit with any society or association registered under the Societies Registration Act, 1860, or under any other enactment;
(iv) a loan advanced by or to the Central or any State Government or by or to any local body under the authority of the Central or any State Government;
(v) a loan advanced by a bank, a co-operative society or a company whose accounts are subject to audit by a certified auditor under the Indian Companies Act, 1913;
(vi) a loan advanced by a trader to a trader, in the regular course of business, in accordance with trade usage;
(vii) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, other than a promissory note."
(9) "Money-lender" means a person, or a firm carrying on the business of advancing loans as defined in this Act, and shall include the legal representatives and the successors-in-interest whether by inheritance, assignment or otherwise, of such person or firm; provided that nothing in this definition shall apply to-
(a) a person who is the legal representative or is by inheritance the successor-in-interest of the estate of a deceased money-lender together with all his rights and liabilities; provided that such person only-
(i) winds up the estate of such money-lender;
Page No. 12 of 18 Order
CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig
(ii) realises outstanding loans;
(iii) does not renew any existing loan, nor advance any fresh
loan;
(b) a bona fide assignment by a money-lender of a single loan to any one other than the wife or husband of such assignor; as the case may be, or any person, who is descended from a common grandfather of the assignor."
9.4. In the present case respondent No.1 is in the business of advancing loans to people for purchase of vehicles. It may be noted that the loan advanced by respondent No.1 to the petitioner is not a friendly loan, rather the same is a commercial loan, as is clear form the loan agreement and hypothication agreement. Had it been a case of friendly loan, the provisions of the said Act would not have applied to such friendly loan, but in the present case as the loan is not a friendly loan, rather it is a commercial loan, at par with the auto loans provided by banks, hence the provisions of the said Act are applicable to the present loan transaction. 9.5. In this regard the court would like to refer to a recent judgment of Hon'ble High Court in case titled Suman Goel Vs Sanjeev Kumar Jain 2018 SCC OnLine Del 6975 dated 5.2.2018. Relevant para is reproduced as under:-
10. In addition to the reasoning given by the trial court of the suit not being barred under the Punjab Registration of Money Lenders' Act because a loan under the Punjab Registration of Money Lenders' Act does not include a loan given on the basis of cheque, it is also required to be noted that it is settled law that friendly loans are not covered under the Punjab Registration of Money Lenders' Act and the Punjab Registration of Money Lenders' Act is to not allow business of granting of loans by financiers and which business would mean regular business and not giving of Page No. 13 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig friendly loans given by one person to another. For this reason also, the suit was not barred under the Punjab Registration of Money Lenders Act.
9.6. In another judgment titled Rajat Jain Vs Neeta Gupta 2017 SCC Online Del 8695 dated 29.05.2017, Hon'ble High Court observed as under:-
"3. A reading of the aforesaid paras shows that the suit for recovery of money is barred only if the plaintiff is found to be engaged in the business of money lending. The word 'business' is very clear because the expression 'business' means various continuous transactions for doing a business and not a few transactions of loans given casually. The first appellate court has also rightly relied upon the judgment of the Punjab and Haryana High Court in the case of Amar Singh v. Kuldeep Singh AIR 1952 Punj. 207 that a person does not become a money lender merely because of giving casual loans to relations, friends or acquaintances and that merely because interest is charged a person does not become a money lender. In fact money can even be lent to a stranger and yet there will be no business of money lending. In my opinion, the first appellate court has committed no illegality or perversity in holding that giving of casual loans is definitely not money lending business which is envisaged under the Act.
4. I cannot agree with the argument urged on behalf of the appellants/defendants that since the respondent/plaintiff has stated that interest income is the source of income of the respondent/plaintiff then only because of this reason the respondent/plaintiff is to be held to be engaged in the business of money lending. As already stated above, giving of a few loans is not the same as business of money lending and the suit is barred only when it is filed by a plaintiff who is engaged in the business of money lending and not a plaintiff who has given few loans to relations, friends or even outsiders or strangers for that matter."
(emphasis supplied) 9.7. Another judgment of our High Court on this issue is Page No. 14 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig Rohit Sharma Vs Mohit Garera 2013 SCC Online Del 3622. Relevant portion reproduced as under:-
"1. The other contention of the defendant that the suit is barred under the Punjab Registration of Money Lenders Act, 1938 is misconceived. It was held by the Division Bench of this Court in the case of Kampa Wati Devi v. Basant Rai 4 (1967) DLT 395 that for the bar under the said Act to apply, the plaintiff has to be a money lender namely a person who is in the business of money lending. An occasional loan to relation, friend etc. would not make a party a professional money lender. For a person to be in the business of money lending, there has to be an element of continuity and habit. Clearly, there is nothing to show here that the plaintiff is in the business of money lending. Bar under the Punjab Registration of Money Lenders Act, 1938 would have no application to the facts of the present case."
9.8. Though it may seem that the said judgments support the case of respondent No.1, however, the common thread running through all the judgments is that for the applicability of section 3 of the said Act it has to be established that respondent No.1 is in the business of lending money. 9.9. There is no doubt that respondent no.1 is in the business of advancing loans for the following reasons:-
a) Because the very name of the firm of respondent No.1 i.e. M/s. Amba Leasing & Finance Company, indicates that the business of the said firm is lending money i.e. provide finance to people for purchase of vehicles etc.
b) The formality of documentation and hypothecation of financed vehicle is at par with that of banks and financial institutions, indicating that the business of respondent no.1 Page No. 15 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig is to advance loans, just like financial institutions.
c) It is not the case of respondent No.1 that the loan advanced to petitioner in the present case (and in the two other cases listed today), was a friendly loan. Respondent No.1 in his claim has stated that the loan was advanced as petitioner approached respondent no.1 for loan and that the loan was advanced for purchase of Auto, which was to be returned in 24 EMI. The relevant para of the claim is reproduced as under:-
"That the applicant is the proprietor of M/s. Amba Leasing & Finance Company having a reputed name in finance business and providing finance for various purposes."
From the wording of the claim itself, it is clear that the loan advanced by respondent no.1 is not a casual loan to relations, friends or acquaintances, rather it is commercial loan, which is at par with the loans advanced by banks and financial institutions.
9.10. Respondent No.1 cannot avoid the provision of Punjab Registration of Money Lenders Act, merely by including an arbitration clause in the loan agreement. Permitting such circumvention would be against public policy and would render a legislation namely Punjab Registration of Money Lenders Act of no consequence.
9.11. Therefore the finding of the Ld Arbitrator on the issue as regards the applicability of Punjab Registration of Money Lenders Act, 1938 to the present loan transaction is contrary to the provisions of the Act and against public policy.
Page No. 16 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig 9.12. Accordingly, the finding of Learned Arbitrator on the said issue is liable to be set aside under Section 34 of Arbitration and Conciliation Act, 1996 and respondent No.1 is not entitled to the amount claimed in view of Section 3 of Punjab Registration of Money Lenders Act.
10. Section 269 SS Income Tax Act:
10.1. Petitioner has submitted that as per respondent No.1 the loan amount of Rs.1,60,000/- was paid in cash and not by banking mode, which is in violation of Section 269 SS of Income Tax Act, hence, the claim of respondent No.1 could not have been allowed.
10.2. It may be noted that the said ground was not taken up by the petitioner in her reply to the claim before the Learned Arbitrator and no issue as regards the same was therefore framed by Learned Arbitrator. The petitioner had moved an application under Order XIV of CPC for framing of additional issue and an additional issue was framed on 29.05.2012, but no issue with respect to applicability of Section 269 SS Income Tax Act was ever framed.
10.3. However, in view of the interpretation of the said Section by Hon'ble High Courts, even otherwise the said section does not debar the person who advances loan in cash from filing a suit for recovery of the loan amount and a loan advanced in cash even in violation of Section 269 SS of Income Tax Act can be recovered in civil proceedings.
Therefore, the award cannot be set aside for the said Page No. 17 of 18 Order CS No. 12048/2016 Sheela Sinha Vs. Pradeep Vig objection taken by petitioner.
11. FINAL ORDER 11.1. In the opinion of the court the finding of learned Arbitrator in Award dated 09.05.2014 that Section 3 and 5 of Punjab Registration of Money Lenders Act does not bar respondent No.1 from recovering the loan amount from petitioner is in conflict with the public policy of India being in contravention with the fundamental policy of Indian Law (i.e. Punjab Registration of Money Lenders Act). 11.2. Award dated 09.05.2014 is accordingly set aside.
12. TSR seized by respondent No.1, be released to the petitioner within two months from today.
13. No order as to costs.
14. File be consigned to Record Room after necessary compliance. Digitally signed by SAURABH PARTAP SINGH LALER Announced in the Open Court Date: 2018.02.27 17:24:06 +05'30' on 27.02.2018 (S.P.S. LALER) Additional District Judge-01, Central Tis Hazari Courts, Delhi 27.02.2018 Page No. 18 of 18 Order