Delhi High Court - Orders
Hero Fincorp Limited vs Amman Traders And Ors on 8 September, 2022
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 729/2021
HERO FINCORP LIMITED ..... Petitioner
Through: Ms. Prarthana Singhania, Adv.
versus
AMMAN TRADERS AND ORS ..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 08.09.2022
1. This petition has been filed by the petitioner for appointment of an Arbitrator in terms of Clause 13 of the Loan Agreement.
2. The learned counsel for the petitioner submits, the respondents availed the financial facility by way of Equated Monthly Instalments (EMI's) in the year 2017 for an amount of ₹3,68,00,000/-. Pursuant to sanction of the financial facility, a Loan Agreement dated November 30, 2017 was executed between the petitioner and the respondents.
3. She also states that the respondents having failed to adhere to the terms and conditions of the Loan Agreement, the petitioner served a Loan Recall Notice dated March 04, 2019, whereby the Loan Agreement was terminated and the respondents were called upon to pay a sum of ₹3,84,51,741.8/- along with applicable interest and other charges under the Loan Agreement within seven days from the receipt of the notice.
4. She also states, on February 23, 2021, the petitioner had invoked the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:12.09.2022 12:57:05 arbitration clause by sending a panel of names of four Advocates and called upon the respondents to choose one Advocate who shall be appointed as an Arbitrator. She also draws my attention to Clause 13 of the Agreement, which is a dispute resolution provision, which reads as under:-
"All claims, disputes, difference or questions of any nature arising between the parties, whether during or after the termination of this Agreement, in relation to the construction, meaning or interpretation of any term used or clause of this Agreement, or as to the rights, duties, liabilities of the parties arising out of this Agreement shall be referred to the sole arbitrator appointed by HFCL. The arbitration proceedings shall be conducted in English in accordance with the Arbitration and Conciliation Act, 1996 and the proceedings shall be held at New Delhi. Pending the giving of the award including interim award, the Borrower shall be liable to perform its obligation under this Agreement including payment of the installments and other outstanding to the HFCL in keeping with the provisions of this Agreement. The arbitral award shall be final and binding on the parties. "
5. The respondent No.1 vide its reply dated April 16, 2021, raised objection, resulting in revocation of appointment of the Arbitrator as made by the petitioner. It was clarified by the counsel for the petitioner that the said appointment was done on behalf of the petitioner and the same was a clerical error. Be that as it may, the present petition having been filed and notice was issued to the respondents.
6. It is noted that, on September 17, 2021, the respondent No.5 was present in person, in these proceedings. Subsequent thereto, on November 22, 2021 as well as on February 11, 2022, representation was also made on behalf of respondent No.1. The parties were also relegated to the mediation Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:12.09.2022 12:57:05 process on December 21, 2021. Thereafter, there was no appearance on behalf of the respondents. In fact, a notice was issued to the respondents 2, 3, 4, 6 and 7 on March 30, 2022. An affidavit of service was also filed by the counsel for the petitioner on July 12, 2022, wherein in paragraphs 2, 3(a), (b), (c), (d) & (e) and 3 the following has been stated:-
"2. I say that as per the directions of the Hon'ble High Court of Delhi vide Order dated 30.03.2022, my Clerk, Ashwani Kumar Singh effected service of the notice of petition alongwith complete paper-book upon the Respondent Nos. 2,3,4,6 and 7 through Speed Post. The Computer generated tracking reports and Speed Post receipts are annexed herewith as Document-A (Colly) as proof of service.
3. As per the computer generated tracking reports the following observations have been made:
a. The Respondent No. 2, M/s Sri Kowasalyam Enterprises has not been served, however, its Partner, Ms. Thenimozhi who is also the Respondent No. 7 has been duly served.
b. The Respondent No. 3, M/s Gold Seal Industries has not been served, however, its Proprietor, Mr. P. Veera Kumar has already been served and he had even entered appearance on 17.09.2021. Therefore, it is right to state that Mr. P. Veera Kumar (Respondent No. 5) is well aware of the ongoing proceedings.
c. The Respondent No. 4, Mr. P. Kannan has been duly served.
d. The Respondent No. 6, Mrs. K. Kasthuri has been duly served.
e. The Respondent No. 7, Mrs. Thenimozhi has been duly served.Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:12.09.2022 12:57:05
3. I say that we have also served the Respondent Nos. 2, 3, 4, 6 and 7 through email on 21.04.2022 on kannankgsr@:gmail.com,[email protected], [email protected],[email protected] m,kasthurikgsr@,gmail.com,[email protected] and [email protected]. The said email has been duly served except on Respondent Nos. 4 and 7. Copy of email dated 21.04.2022 is annexed as Document-B."
7. The affidavit of service reveals that all the respondents (themselves or through their partner or proprietor) have been duly served either through speed post and / or e-mail. It appears that on July 14, 2022, the Court after noticing the compliance regarding service of notice has been done but no one appeared for the respondents, directed issuance of fresh notice, returnable on July 27, 2022. The report of the Registry in this regard is that e-mail has been sent to the respondents. Whereas, for speed-post, report of the Registry reveal that no one had come to collect the notice. Suffice to state there is nothing on record to show that the e-mails have bounced back.
8. In view of the aforesaid facts, despite service having been effected, as is seen from the affidavit of service for the hearing on July 14, 2022 and also through e-mails, which have been successfully delivered to the intended recipient and in view of the order dated May 19, 2022, passed by the Supreme Court in the case of SLP (Civil) 5306/2022 titled as M/s Shree Vishnu Constructions v. The Engineer in Chief, Military Engineering Service & Ors., wherein it was directed by the Supreme Court that "all pending applications under Sections 11(5) and 11(6) of the Arbitration Act and / or any other applications either for substitution of arbitrator and / or change of Arbitrator, which are pending for more than one year from the date of filing, must be decided Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:12.09.2022 12:57:05 within six months from today", this Court proceed to decide the present petition.
9. It is clear that the relationship between the parties was regulated as per the terms of the Loan Agreement dated November 30, 2017, wherein, the respondent No.1 / other respondents are borrower / co-borrowers. It is the case of the petitioner that the respondents have not repaid the loan. The dispute has arisen between the parties. The seat of arbitration, in terms of Clause 13 of the Loan Agreement, which I have already reproduced above, is at New Delhi. Hence, this Court has the jurisdiction to adjudicate the present petition. The dispute having arisen, this Court is of the view that the parties be relegated to the arbitration process, by appointing an arbitrator, who shall adjudicate the dispute.
10. For this purpose, this Court appoints Justice P.K. Bhasin, a former Judge of this Court, as the Sole Arbitrator (Mobile No. 9871300032) who shall adjudicate the dispute between the parties through claims and counter- claims, if any. All the pleas of the parties, both on facts and in law are left open to be decided by the learned Arbitrator.
11. The fee of the learned Arbitrator shall be regulated in terms of Fourth Schedule of the Arbitration and Conciliation Act, 1996. He shall give his disclosure under Section 12 of the Act.
12. A copy of this order shall be sent to the Arbitrator on WhatsApp.
13. The petition is disposed of. No costs.
V. KAMESWAR RAO, J SEPTEMBER 8, 2022/ak Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:12.09.2022 12:57:05