Madras High Court
Mr.Magesh Kumar S vs M/S.Cholamandalam Investment And ... on 3 January, 2018
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
O.P.No.579 of 2019
THE HIGH COURT OF JUDICATURE AT MADRAS
Date 02.07.2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
O.P.No.579 of 2019
1. Mr.Magesh Kumar S
2. Mr.Sethuram S. . . . Petitioners
Versus
M/s.Cholamandalam Investment and Finance Company Limited,
Rep. by its Authorized Signature
No.45, Justice Basheet Ahmed Sayeed Building,
II Floor, 2nd Line Beach, Moore Street, Chennai – 600 001. . . . Respondent
PRAYER : Petition filed under Section 34 of Arbitration and Conciliation Act,
1996 to set aside the award of the arbitrator in CTM No.1132 of 2010 dated
03.01.2018 as illegal, arbitrary and against law.
For petitioner : Dr.A.Thiagarajan,
for Mr.Sunil Kumar
For respondents : Mr.Pradeep Kumar
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https://www.mhc.tn.gov.in/judis/
O.P.No.579 of 2019
ORDER
The award was made by the sole arbitrator in a dispute arose between the petitioners and the respondent in a loan agreement dated 26.09.2008.
2. The main contention of the petitioner is that non service of notice and non service of notice for invocation of arbitration and also appointment of a subsequent arbitrator. This Court, to arrive at a conclusion on the contention of the parties called for the original records from the arbitrator.
3. On a perusal of the original records, it is found that for invocation of arbitration, no notice, whatsoever, has been served on the petitioner. Further, originally, a sole arbitrator one Mr.Gowthaman was nominated by the respondent by their letter dated 20.04.2010. Immediately, after his nomination, it appears that they have filed the claim statement before the sole arbitrator. Thereafter, notice has been addressed to the respondent by the arbitrator for hearing on 08.09.2010, in which the address is shown as Chidambaram and Pondicherry. There is no clear and correct address in the postal cover. However, the above letters have been Page 2 / 6 https://www.mhc.tn.gov.in/judis/ O.P.No.579 of 2019 returned as refused. Thereafter, the matter had got adjourned for several hearings on 05.01.2011, 02.02.2011, 02.03.2011, 23.03.2011 and 06.04.2011 for filing proof affidavit of the respondent. On 13.07.2017, the sole arbitrator originally appointed, reserved the matter for passing of award. Thereafter, it appears that another arbitrator is said to have been appointed. However, no details whatsoever is available in the entire records as to why the earlier arbitrator could not pass the award despite the fact that he is said to have reserved the matter for passing of the award in the year 2011 itself. Even thereafter, the proceedings have been continuously adjourned for several hearings and finally the sole arbitrator has passed the present award, who has come into picture in the year 2015. He is said to have issued notice to all the parties. However, no acknowledgment whatsoever is available on record. Whereas, the signature of the claimant and arbitrator alone are found in the so called notice issued on 25.11.2015. Thereafter, no proceedings, whatsoever, is available on record. Finally, award came to be passed on 03.01.2018.
4. The entire award also makes it clear that the award is also silent about the service of notice. The arbitrator has passed the award based on the materials Page 3 / 6 https://www.mhc.tn.gov.in/judis/ O.P.No.579 of 2019 already available on record with the respondent, i.e., filed before the first arbitrator. No opportunity whatsoever was given to the petitioner herein. The entire proceedings right from the inception when the earlier arbitrator appointed in the year 2010 till the award passed in the year 2018, no material is available on record to show that the notice of invocation under section 21 of the Arbitration and Conciliation Act or notice of the proceedings is served on the respondent.
5. In such view of the matter, this Court is of the view that the award cannot be sustained in the eye of law on the ground of non service of notice envisaged under section 34 of the Arbitration and Conciliation Act. Besides, the arbitrator has not even conducted fair hearing and he just passed the award on the basis of the materials without any hearing. All these facts clearly indicate that the award cannot be sustained.
6. Accordingly, the award is set aside and this petition is allowed. It is for the respondent to go for fresh arbitration as per the agreement and get back the original records from the arbitrator. The amount deposited by the applicant as per Page 4 / 6 https://www.mhc.tn.gov.in/judis/ O.P.No.579 of 2019 the interim Orders of this Court while granting stay shall be refunded to the applicant.
02.07.2021 Index : Yes / No Internet: Yes Speaking/non speaking order vrc Page 5 / 6 https://www.mhc.tn.gov.in/judis/ O.P.No.579 of 2019 N. SATHISH KUMAR, J.
vrc order in:
O.P.No.579 of 2019
02.07.2021 Page 6 / 6 https://www.mhc.tn.gov.in/judis/