Delhi High Court - Orders
Techno Justcars 365 Pvt. Ltd vs Cars 24 Financial Services Pvt. Ltd on 28 March, 2023
Author: Prateek Jalan
Bench: Prateek Jalan
$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 124/2022 & I.A. 20657/2022
TECHNO JUSTCARS 365 PVT. LTD. ..... Petitioner
Through: Mr. Saransh Jain, Ms. Shloka
Narayanan, Ms. Sneha Dey and
Mr. Abhishek Kumar, Advocates.
versus
CARS 24 FINANCIAL SERVICES PVT. LTD. ..... Respondent
Through: Mr. Narender Hooda, Senior
Advocate with Mr. Sharique
Hussain, Mr. Shaurya Lamba, Mr.
Rishab Raj Jain, Advocates.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 28.03.2023
1. By way of this petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner seeks termination of the mandate of an arbitrator, who is in seisin of disputes between the parties. Although the agreement in question has not been placed on record, Mr. Narender Hooda, learned Senior Counsel for the respondent, states that transactions between the parties were under the an agreement dated 22.09.2019 entitled "Loan Agreement".
2. According to learned counsel for the petitioner, the petitioner had no knowledge of the arbitral proceedings until it was informed of an order dated 02.11.2022 purportedly passed by the learned arbitrator under Section 17 of the Act.
3. The principal ground of challenge in the present petition is that the arbitrator was unilaterally appointed in terms of the agreement, in which Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:29.03.2023 13:03:07 O.M.P. (T) (COMM.) 124/2022 Page 1 of 3 circumstances the arbitral proceedings are void ab initio in line with the judgments of the Supreme Court in TRF Ltd. vs. Energo Engineering Projects Ltd. [(2017) 8 SCC 377] and Perkins Eastman Architects DPC and Another vs. HSCC (India) Limited [(2020) 20 SCC 760].
4. Mr. Hooda states upon instructions that given the prevalent legal position, the Court may terminate the mandate of arbitrator and appoint an independent arbitrator to take up the proceedings. Learned counsel for parties are also in agreement that proceedings may be referred to arbitration under the aegis of Delhi International Arbitration Centre, Delhi High Court, Shershah Road, New Delhi ["DIAC"].
5. Having regard to the aforesaid submissions and with the consent of learned counsel for the parties, the petition is disposed of with the following directions:-
a. The mandate of Mr. Devendra Singh Mehta, the learned arbitrator who is in seisin of disputes between the parties, is terminated. b. The disputes are referred to arbitration of Hon'ble Ms. Justice Asha Menon, former Judge of this Court [Tel:- 9910384664]. c. The arbitration will be held under the aegis of DIAC and will be governed by Rules of DIAC, including as to the remuneration of the learned arbitrator.
d. The learned arbitrator is requested to furnish a declaration under Section 12 of the Act prior to entering into the reference. e. The statement of claims and documents placed by respondent herein before the erstwhile arbitrator may be filed before the learned arbitrator, immediately upon the learned arbitrator entering into reference. Copies of the said documents will also be handed over to the Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:29.03.2023 13:03:07 O.M.P. (T) (COMM.) 124/2022 Page 2 of 3 petitioner at the same time. The petitioner may file its statement of defence within one week thereafter, and also its reply to application under Section 17 of the Act.
f. The parties may request the learned arbitrator to take up the application under Section 17 of the Act expeditiously. The learned arbitrator may take a decision on the same in accordance with law.
6. Learned counsel for the petitioner points out that an affidavit dated 25.03.2023 has been filed, from which it appears that the original Board Resolution, on the strength of which the petition was filed, was defective as it had been signed by two persons who were no longer directors of the petitioner-company. The explanation in relation thereto is that one of the persons, namely, Mr. R. Raghavendra had resigned on 18.11.2022, but inadvertently signed the Board Resolution dated 03.12.2022. This explanation is wholly unsatisfactory. There is no explanation with regard to the second signatory at all. However, as the petitioner has filed a new Board Resolution dated 02.01.2023, authorising the authorised signatory to file the present petition, the Board Resolution is taken on record, subject to the petitioner depositing costs of Rs. 10,000/- with the Delhi High Court Legal Services Committee ["DHCLSC"] [UCO Bank, Delhi High Court, Shershah Road, New Delhi, Account No. 15530110008386, IFSC Code-UCBA0001553]. Costs be deposited within two weeks from today.
7. The petition is disposed of in these terms.
PRATEEK JALAN, J MARCH 28, 2023/'vp'/ Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:29.03.2023 13:03:07 O.M.P. (T) (COMM.) 124/2022 Page 3 of 3