Delhi District Court
Rajesh Verma vs M/S. Phoenix Arc Pvt. Ltd on 24 February, 2023
IN THE COURT OF SH. SANJEEV AGGARWAL,
DISTRICT JUDGE (COMMERCIAL)-03, SOUTH,
SAKET COURTS, NEW DELHI
OMP (COMM) 3/2019
CNR NO. DLST010011452019
Rajesh Verma
S/o. Late Shri Nand Lal Verma
R/o. F-78, Chetinay Marg
C Scheme Jaipur-302001
...Petitioner
Versus
1. M/s. Phoenix ARC Pvt. Ltd.
Having its Registered Office at
7th Floor, Dani Corporate Park
158, CST Road, Kalina Santacruz(E)
Mumbai-400098
Branch Office at :
7th Floor, Plot No. 7
Sector-125, Noida
Near Dell Complex
UP-020131
2. Sh. Raj Kumar Sharma, Sole Arbitrator
Chamber No. 784, Lawyers Block
District Court Saket
New Delhi-110017
...Respondents
Date of institution of petition : 18.02.2019
Date of reserving judgment : 09.02.2023
Date of pronouncement : 24.02.2023
JUDGMENT
OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 1 of 20
1. Vide this judgment, I shall dispose off the present petition / objections filed u/S. 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as an Act) by the petitioner against the arbitration award dated 18.09.2018, passed by Ld. Arbitrator Sh. Raj Kumar Sharma.
2. Brief facts which can be taken out from the relevant para(s) of the award dated 18.09.2018 are as under :
The claimant, Phoenix ARC Pvt. Ltd. is a company incorporated and registered under the companies Act, 1956 having its registered office at 7th Floor, Dani Corporate Park, 158, CST Road, Kalina, Santa Cruz (E), Mumbai -400098 and one of its branch office at 7 th Floor, Plot No.7, Sector- 125, Noida, Near Dell Campus, UP- 201313 - as Trustee of the Phoenix Trust FY 12 - 6 Scheme A, entered into a Deed of Assignment dated 30.04.2012 with Royal Bank of Scotland (formerly known as ABN AMRO Bank), a banking company having Registered Office at Gustav Mahlerlaan 10, Amsterdam, 1082 PP, The Netherlands and a branch at Fort, Mumbai
- 400001. By virtue of the said Deed of Assignment, Royal Bank of Scotland (formerly known as ABN AMRO BANK) assigned/sold/transferred, interalia to /in favour of the Trust- of which Claimant is the trustee,- the entire receivables together with the interest, rights, obligation OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 2 of 20 and and benefits, in the caption credit card account and the Claimant has become solely entitled to receive.
XXXX XXXX XXXX Accordingly to the statement of Claim filed by the claimant, the respondent Mr. Rajesh Verma, applied to Royal Bank of Scotland PLC for availing a credit card with credit and cash limits vide Credit Card application and represented himself to be financially sound and submitted certain documents in proof of his identity, residence, income and other credentials on the basis of which, the Claimant's assignors i.e. Royal Bank of Scotland has issued a credit card bearing no.
5415382301762407 to the Respondent. The Claimant further submits that the Respondent has assured that in case of any cash or credit limit used by him, he shall repay the said dues in time. The Claimant further submits that at the time of submitting the duly filled application form and issuance of the card with the aforesaid credit and cash limits, the Respondent had agreed to abide by the terms and conditions mentioned in the application form.
XXXX XXXX XXXX The Claimant states that in a bid to settle the abovesaid dues, it has approached the respondent and the parties had consequently mutually agreed to settle at an OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 3 of 20 amount which the respondent was required to pay within a stipulated time period from the date of issue of the settlement letter failing which the said settlement would lapse. That the said settlement letter has an Arbitration clause which categorically stated that in case the respondent failed to make the payment within the given time, the claimant reserves the right to invoke the said arbitration clause and initiate arbitral proceedings against the respondent.
The Claimant submits that despite the said settlement letter, respondent chose not to make payment of the said amount and hence the broke the terms of the settlement letter consequent to which, the claimant issued a Demand Notice dated 03.08.2017 to the respondent calling upon him to pay to claimant the outstanding dues.
However, despite sending of the said notice the Respondent did not clear the dues and thus a dispute has been arisen between the parties. Consequently the claimant under the given circumstances referred the preset claim/dispute for arbitration.
The parties had also agreed by the said settlement letter dated 28.04.2016 that in the event of any dispute or differences arising out of or in connection with or in relation to the settlement letter, such dispute shall be finally resolved by Arbitration which shall be concluded OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 4 of 20 in accordance with the provisions of Indian Arbitration & Conciliation Act, 1996 or any amendment or enactment thereof by a sole Arbitrator to be appointed by the Claimant, same is recorded in the settlement letter issued to the respondent by the claimant. Arbitration clause as mentioned in settlement letter is re-produced here under:
"Any dispute, differences of opinion and / or claims arising out of this document shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996 ( as amended from time to time), by a Sole Arbitration to be appointed by us. Any Arbitration Award/direction passed shall be final and binding on the parties. The venue of such Arbitration shall be at Mumbai or Delhi or chennai or Kolkata to be decided at our discretion".
The Claimant states that as the Respondent have made willful default in payment of the settlement amount, the respondent have committed breach of the terms of the settlement and the concession granted under the said settlement letter dated 28.04.2016 stood revoked and in terms thereof, the claimant is entitled to recover their entire dues with further interest till payment and or realization.
By virtue of the Arbitration clause in the settlement OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 5 of 20 letter, the claimant through their advocate sent intent cum reference Letter dated 11.09.2017 to me thereby offering to nominate me as Sole Arbitrator to adjudicate upon and decide the dispute of the claim made by the claimant against the respondent and asking for my concurrence to act as sole arbitrator for adjudication of the dispute having arisen between the parties, as per the terms and conditions of the loan agreement and requesting for conducting the Arbitration on fast tract mode as per amended Arbitration Act, I accepted my appointment and concurred to act as sole arbitrator for the adjudication of the dispute.
Accordingly, notice dated 28.10.2017 was sent to both the parties thereby furnishing all necessary disclosure as contemplated under section 12 of the Arbitration and Conciliation Act, 1996. There was no objection received from the respondent/s in the stipulated time as mentioned in the aforesaid notice and as such notice sent to the respondent. In this notice, directions were given to both the parties to appear before me on 06.12.2017 at 2.3. PM at the address given therein. It was specifically mentioned in the said notice that the respondent did not appear on the last date of hearing and if he fails to appear on the next date of hearing also in that event the matter would be proceeded ex-parte and determined accordingly.
OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 6 of 20
XXXX XXXX XXXX
It may be noted that the Arbitral Tribunal is not bound by the code of Civil Procedure, 1908 or Indian Evidence Act, 1872, as provided under Section 19 of the Arbitration and Conciliation Act, 1996. The Arbitral Tribunal has discretion to conduct the proceedings in manner it considered appropriate, of course it must be in consonance with the public policy. In other words, principle of natural Justice has to be followed. In the present case as pointed above sufficient opportunities is given to the respondent but the pleadings of the claimant ans evidence produced by the claimant remain controverted. It is also pertinent to note that looking at the nature of dispute it can be decided on the basis of documents and account statement maintained by the claimant which is certified as computerized. Particularly because it is a simple transaction which can be spelled out from the settlement agreement entered between claimant and respondent.
In result I proceed to pass the following order:
1. The respondent(s) do pay, to the claimant company as sum of Rs. 35,505.49/- ( Thirty Five Thousand Five Hundred Five Rupees and Forty Nine Paise) together with interest calculated on this outstanding dues amount of Rs.35,505.49/- ( Thirty Five Thousand Five Hundred OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 7 of 20 Five Rupees and Forty Nine Paise) @ 18% per annum from 29.02.2012 till the payment by the Respondent(s) or realization thereof by the claimant deducting whatever amount paid under settlement.
2. The Respondent(s), do pay to the claimant the costs of the Arbitral proceeding including the fees of Arbitrator quantified at Rs.7,000/-.
3. The said award dated 18.09.2018 passed by the Ld. Arbitrator has been questioned on the following main grounds that there was no valid arbitration agreement between the parties, whereby respondent no. 2 could act as a sole arbitrator at the time of issuance of the credit card to the petitioner. It is further stated that the Ld. Arbitrator has failed to appreciate that the petitioner never knew the Ld. Arbitrator before the commencement of the arbitration proceedings, so there was no question of agreeing to appoint a person as arbitrator, of whom the petitioner had no knowledge.
It is further stated that no notice of appointment of the Ld. Arbitrator was given to the petitioner, as no copy of statement of claim filed by respondent no. 1 was sent to the petitioner. It is further stated that the said award is non speaking, it is even otherwise bad in law and has been illegally procured by respondent no. 1 from respondent no. 2 by exercising his influence, who also gave the arbitration award without going through the entire material including the entries in the statement of OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 8 of 20 account.
It is further stated that the Ld. Arbitrator is working for respondent no. 1 as their stock arbitrator, who has not followed the principles of natural justice. The award is also affected by fraud and is also against the fundamental policy of India. It is further stated that the petitioner had no knowledge and had not received any notice of appearance or any notice issued by the Ld. Arbitrator. It is therefore, stated that the award dated 18.09.2018 is liable to be set aside.
4. Reply has been filed by respondent no. 1 to the said objections, stating that the petitioner was having the knowledge of the claim filed before the Ld. Arbitrator and he deliberately did not join the arbitration proceedings to delay the matter. It is also stated that the petitioner has been duly served with the notice of the arbitration proceedings and despite knowledge of the arbitration proceedings, deliberately did not appear before the Ld. Arbitrator. Further the petitioner is residing at the same address, which is mentioned in the arbitration proceedings, therefore, it is inconceivable that he was not served with the notice(s) and communication in respect of the arbitration proceedings. All other averments with regard to the facts mentioned in the petition u/S. 34 of the Act have been vehemently denied.
It is further stated that the arbitration award has been passed by the Ld. Arbitrator in accordance with the law after considering the entire claim, evidence and the documents in support thereof. It is denied that the Ld. Arbitrator has ever worked as stock arbitrator of the respondent OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 9 of 20 no. 1 or he has not acted in consonance with the principles of natural justice and passed the arbitration award without due application of mind or the arbitration agreement between the parties was not valid, therefore, it is stated that none of the grounds raised by the petitioner by way of present objections falls under the provisions of Section 34(2) of the Act and therefore, the arbitration award is not liable to be set aside.
Ld. Counsel for respondent no. 1 has relied upon the following judgment(s) in support of his contentions :
a) NTPC Ltd. Vs. M/s. Deconar Services Pvt. Ltd. Civil Appeal No. 6483 of 2014 decided on 04.03.2021 by the Hon'ble Supreme Court of India;
b) Union of India and Anr. Vs. M/s. Bhawani Traders MA No. 90/2019 CM No. 9687/2019 decided on 29.07.2022 by the Hon'ble High Court of Jammu and Kashmir and Ladakh at Jammu.
5. During the course of arguments, it was not disputed by respondent no. 1 that the present objections have been filed beyond the period of limitation as prescribed u/S. 34(3) of the Act.
However, during the course of the arguments, Ld. Counsel for the petitioner contended that the arbitration clause contained in the impugned award has given power to appoint the arbitrator unilaterally to respondent no. 1 without the consent / affirmation of the petitioner. Therefore, he submits that the said unilateral appointment is not in accordance with the settled law laid down by the Hon'ble Supreme Court in the judgment of Perkins Eastman Architects DPC & Anr. Vs. HSCC (India) Ltd. (Arbitration Application No. 32 of 2019).
OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 10 of 20
6. I have gone through the rival contentions.
7. It is settled law that the Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even by the Court as a Court of law could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are those mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
8. The existence of the settlement letter dated 28.04.2016 between the petitioner and respondent no. 1 is not disputed. The said settlement letter admittedly contained the following arbitration clause, which is reproduced as under :
"Any dispute, differences of opinion and / or OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 11 of 20 claims arising out of this document shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996 ( as amended from time to time), by a Sole Arbitration to be appointed by us. Any Arbitration Award/direction passed shall be final and binding on the parties. The venue of such Arbitration shall be at Mumbai or Delhi or Chennai or Kolkata to be decided at our discretion".
9. Ld. Counsel for the respondent has relied upon the judgment NTPC Ltd. Vs. M/s. Deconar Services Pvt. Ltd. (supra), in which it has been held by the Hon'ble Supreme Court as under :
11. Before proceeding further, it is necessary to make note of the scope of interference by Courts in arbitral awards passed under the Arbitration Act,1940. This court has consistently held that the Court does not sit in appeal over an award passed by an arbitrator. In Kwality Manufacturing Corporation v. Central Warehousing Corporation, (2009) 5 SCC 142 this Court held as follows:
"10. At the outset, it should be noted that the scope of interference by courts in regard to arbitral awards is limited. A court considering an application under Section 30 or 33 of the Act, does not sit in appeal over the findings and decision of the arbitrator. Nor can it reassess or reappreciate evidence or examine the sufficiency or otherwise of the evidence. The award of the arbitrator is final and the only grounds on which it can be challenged are those mentioned in Sections 30 and 33 of the Act. Therefore, on the contentions urged, the only question that arose for consideration before the High Court was, whether there was any error OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 12 of 20 apparent on the face of the award and whether the arbitrator misconducted himself or the proceedings."
(emphasis supplied)
12. Further, it is also a settled proposition that where the arbitrator has taken a possible view, although a different view may be possible on the same evidence, the Court would not interfere with the award. This Court in Arosan Enterprises Ltd. v. Union of India, (1999) 9 SCC 449 held as follows:
"36. Be it noted that by reason of a long catena of cases, it is now a well-settled principle of law that reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under Section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons, the interference would still be not available within the jurisdiction of the court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. In the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award.
37. The common phraseology "error apparent on the face of the record" does not itself, however, mean and imply closer scrutiny of the merits of documents and materials on record. The court as a matter of act, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined..."
13. From the above pronouncements, and from a catena of other judgments of this Court, it is clear that for the objector/appellant in order to succeed in their challenge against an arbitral award, they must show that the award of OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 13 of 20 the arbitrator suffered from perversity or an error of law or that the arbitrator has otherwise misconducted himself. Merely showing that there is another reasonable interpretation or possible view on the basis of the material on the record is insufficient to allow for the interference by the court [See State of U.P. v. Allied Constructions, (2003) 7 SCC 396; Ravindra Kumar Gupta and Company v. Union of India, (2010) 1 SCC 409; Oswal Woollen Mills Limited v. Oswal Agro Mills Limited, (2018) 16 SCC 219].
10. In the above judgment, it has been held that the Court does not sit in appeal over an award passed by the Ld. Arbitrator or where the arbitrator has taken a possible view, although a different view may be possible on the same evidence, the Court would not interfere with the award and further the objector in order to succeed in their challenge against an arbitral award, must show that the award of the arbitrator suffered from perversity or an error of law or that the arbitrator has otherwise misconducted himself. Merely showing that there is another reasonable interpretation or possible view on the basis of the material on the record is insufficient to allow for the interference by the Court.
11. No doubt, after perusal of the entire material on record, no infirmity or illegality can be found in the impugned award on the above aspects as per law, as laid down by the Hon'ble Supreme Court, however, at the same time in view of the judgment of the Hon'ble Supreme Court in Perkins Eastman Architects DPC & Anr. Vs. HSCC (India) Ltd. (supra), wherein it has been held as under :
"16....But, in a case where only one party has a right to appoint a OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 14 of 20 sole arbitrator, its choice will always have an element of exclusivity in determining or charting the course for dispute resolution. Naturally, the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator. That has to be taken as the essence of the amendments brought in by the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016) and recognised by the decision of this Court in TRF Limited (2017) 8 SCC 377."
12. As stated in the preceding para(s), the arbitration clause between the parties is admitted, which is mentioned in the arbitration award itself, which is again reproduced as under :
"Any dispute, differences of opinion and / or claims arising out of this document shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996 ( as amended from time to time), by a Sole Arbitration to be appointed by us. Any Arbitration Award/direction passed shall be final and binding on the parties. The venue of such Arbitration shall be at Mumbai or Delhi or Chennai or Kolkata to be decided at our discretion".
13. In the present case also, the said arbitration clause clearly vests unilateral power with Respondent no. 1 to appoint the sole arbitrator. Therefore, in view of the aforesaid judgment, which is squarely applicable to the facts of the present case, in a case where one party has the right to appoint the sole arbitrator, its choice will have an element of exclusivity in determining the course for dispute resolution. Naturally the OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 15 of 20 person who has interest in the outcome of the decision must not have the right to appoint a sole arbitrator. Therefore, the arbitration clause in question is hit by the above judgment of Hon'ble Supreme Court. As a consequence, the contrary arguments of the Ld. Counsel for respondent are not tenable and are rejected.
14. With regard to the arguments qua non service of the notice(s), sent by the Ld. Arbitrator with regard to the arbitration proceedings, as argued by Ld. Counsel for the petitioner, it has been held in the judgment Shabnam Gulati Vs. Religare Finvest Pvt. Ltd. FAO(OS) 338/2016, CMs Nos. 43195, 45018 and 45938/2016 decided on 22.09.2017, in para 12 as under:
12. As far as the second contention is concerned, learned counsel appearing on behalf of the appellant drew our attention to the notice of the arbitration proceedings dated 19.09.2012 issued by the arbitrator and the postal receipt and also the envelop cover by which the said notice had been returned with remark "unclaimed". The appellant points out that the postal receipt reflects an incorrect Pin Code inasmuch as instead of Pin Code "400050", Pin Code reflected in the postal receipt is "400001". In our opinion this mistake in the Pin Code is of no relevance inasmuch as other details and particulars, namely, name of the addressee i.e. the appellant and her husband and their residential address i.e. the flat number, the floor, colony, etc. are correct. It is not that the postal authorities were unable to locate the address, for the said reason. Further, subsequent notice was issued by the arbitrator before proceeding ex-parte against the appellant. The envelope at page 162-163 of the paper book enclosing the second notice correctly records the Pin Code number as "400050". The FAO (OS) 338/2016 Page 9 envelope was returned with the remark "unclaimed" and not because the address was incorrect or not found.
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15. It has also been held by the Hon'ble Delhi High Court in para 26 of the judgment Tata Capital Financial Services Ltd. Vs. A. G. Aerovision Electronics Pvt. Ltd. & Ors. OMB (ENF.) (COMM.) 150/2016 dated 15.01.2018 as under :
26. In my view, if the submission of the learned counsel for the petitioner that till service of signed copy of the arbitral award from the learned arbitrator is actually received by the petitioner though it was not claimed by the petitioner inspite of intimation posted by the postman, it will not amount to delivery of the award under Section 31(5) of the Arbitration Act is accepted, dishonest litigant who deliberately does not claim copy of the signed award sent by the learned arbitrator inspite of the postman having posted the intimation, the limitation would never commence for filing a petition under Section 34(3) of the Arbitration Act and the beneficiary of the award would never be able to apply for execution of such award. The arguments of the learned counsel for the petitioner, in my view, is ex facie contrary to the principles laid down by the Supreme Court in the case of C.C. Alavi Haji (supra) and judgment of the Calcutta High Court in the case of New Globe Transport Corporation (supra), contrary to Section 3 of the Arbitration and Conciliation Act, 1996, Section 27 of the General Clauses Act, 1897 and also to the provisions of Section 31(5) of the Arbitration Act, 1996.
16. Further it has been held by the Hon'ble Supreme Court in para 14 of the judgment of C.C. Alavi Haji Vs. Palapetty Muhammed & Anr.
Appeal (crl.) 767 of 2007 dated 18.05.2007 as under :
14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 17 of 20 service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house locked or shop closed or addressee not in station, due service has to be presumed.
[Vide Jagdish Singh Vs. Natthu Singh ; State of M.P. Vs. Hiralal & Ors. and V.Raja Kumari Vs. P.Subbarama Naidu & Anr. ] It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.
17. The law laid down in the aforesaid judgment(s) is squarely applicable to the facts of the present case. In the present case, as per the arbitration record, the Ld. Arbitrator had sent the notices regarding the arbitration proceedings at the same address, as mentioned in the memo of parties of the present petition. Therefore, the petitioner cannot be allowed to say that the said notices sent during the arbitration proceedings, which were correctly addressed to the petitioner were not received by the petitioner. In any case, in view of the aforesaid judgment(s) (supra), Section 27 of the General Clauses Act gives rise to the presumption regarding due service of the notice(s), when they were sent at the correct address by registered post unless or until the contrary is proved by the addressee, service of notice(s) will be deemed to have been effected.
18. With regard to another argument by the Ld. Counsel for the petitioner that the arbitration award be set aside in terms of Schedule 5 of the Act, as it was argued that the Ld. Arbitrator has within the last three OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 18 of 20 years been appointed by the respondent as arbitrator on one or two occasions, who is there stock arbitrator. However, Ld. Counsel for respondent denied so during the course of arguments.
Moreover, Ld. Counsel for the petitioner has failed to show anything to the contrary during the arguments or otherwise. There is nothing on the record from which it can be said that there is any ground giving rise to any suspicion or doubt on this aspect.
19. As discussed above, the arbitration clause of settlement letter dated 28.04.2016 provides that in the event of any dispute or differences arising out of this document, shall be settled by arbitration, by a sole arbitrator to be appointed by us.
20. In view of the afore discussed legal position at present, this court is satisfied that the procedure of appointment of sole arbitrator, as specified in the terms and conditions of the settlement letter dated 28.04.2016 i.e. the arbitration of a single arbitrator to be nominated by lender, is not in accordance with law and therefore, this Court finds that the Ld. Sole Arbitrator was de-jure ineligible to act as an arbitrator under Section 12(5) r/w Schedule VII of The Arbitration and Conciliation Act, 1996.
21. In view of the afore going discussion, the award dated 18.09.2018 passed by the Ld. Sole Arbitrator cannot be legally sustained OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 19 of 20 and is therefore, set-aside. As a consequence, the present petition u/S. 34 of the The Arbitration and Conciliation Act, 1996 stands allowed. Parties to bear their own cost(s). File be consigned to record room.
Announced in the open court (Sanjeev Aggarwal) today on 24.02.2023. District Judge (Commercial)-03 South, Saket Courts, New Delhi OMP (Comm) 3/2019 (CNR No. DLST010011452019) Page No. 20 of 20