M/S Sundaram Finance Limited, v. G.Satish Kumar,
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.06.2023
CORAM
THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY Arb.O.P.(Com.Div.)No.203 of 2023:
M/s.Sundaram Finance Limited, No.21, Patullos Road, Chennai 600 002, Represented by its Authorised Signatory, Mr.S.Sugavanam.
... Petitioner Vs.
1.G.Sathish Kumar 2.V.Chandrasekar ... Respondent Arbitration Original Petition filed under Sections 15(2) read with 11(6) of the Arbitration and Conciliation Act, 1996 to appoint/substitute a sole Arbitrator to adjudicate upon the differences and disputes between the parties under the said agreement dated 13.10.2017 in respect of contract bearing No.M028800361.
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For Petitioner in all OPs : Mr.M.Arunachalam For Respondents in all OPs : Mr.K.Bijay Sundar COMMON ORDER These Arbitration Original Petitions have been filed for appointment of the Arbitrator to adjudicate upon the differences and disputes between the parties under the respective agreements.
2. The learned counsel for the petitioner would submit that the respondents had approached the petitioner for loan facility and had entered into following loan agreements:
S.No Petitions Contract No Agreement date Arb.O.P.(Com.Div.)No.203 M028800361 13.10.2017 Arb.O.P.(Com.Div.)No.204 M000900555 06.09.2017 Arb.O.P.(Com.Div.)No.205 M028800359 13.10.2017 Arb.O.P.(Com.Div.)No.206 M028800357 12.10.2017 Arb.O.P.(Com.Div.)No.207 M000900559 13.09.2017 Arb.O.P.(Com.Div.)No.208 M000900226 31.05.2017 Arb.O.P.(Com.Div.)No.209 L000901070 17.11.2016 Arb.O.P.(Com.Div.)No.210 M028800360 13.10.2017 Arb.O.P.(Com.Div.)No.211 L000901068 17.11.2016 Arb.O.P.(Com.Div.)No.212 M028800352 12.10.2017 Arb.O.P.(Com.Div.)No.213 M028800627 23.03.2018 Arb.O.P.(Com.Div.)No.214 M028800354 12.10.2017 2/9
3. He would further submit that there is default in repayment of the loan amount by the respondent. With regard to the same, the petitioner sent legal notices and also notices under Section 21 of the Arbitration and Conciliation Act, 1996 (hereinafter called as "the Act") to the respondents, on various dates which reads as follows:
S.No Petitions Legal Notice Section 21 Notice Arb.O.P.(Com.Div.)No.203 06.03.2019 10.09.2019 Arb.O.P.(Com.Div.)No.204 06.03.2019 05.09.2019 Arb.O.P.(Com.Div.)No.205 06.03.2019 26.07.2019 Arb.O.P.(Com.Div.)No.206 06.03.2019 29.01.2021 Arb.O.P.(Com.Div.)No.207 06.03.2019 31.10.2019 Arb.O.P.(Com.Div.)No.208 07.11.2018 07.09.2019 Arb.O.P.(Com.Div.)No.209 06.03.2019 07.09.2019 Arb.O.P.(Com.Div.)No.210 06.03.2019 26.07.2019 Arb.O.P.(Com.Div.)No.211 05.12.2018 07.09.2019 Arb.O.P.(Com.Div.)No.212 06.03.2019 27.08.2019 Arb.O.P.(Com.Div.)No.213 06.03.2019 28.08.2019 Arb.O.P.(Com.Div.)No.214 06.03.2019 28.08.2019
4. It was further contended by the learned counsel appearing for the petitioner that in spite of the above notices, the respondents had not come forward to settle the dues. Though, the present dispute is arbitrable by the 3/9
sole Arbitrator appointed by the claimant as per the Clause 22(a) of the loan agreement, in view of the law laid down by the Hon'ble Apex Court that the unilateral appointment is not in accordance with law and if any award is passed by the said Arbitrator, the same is not sustainable, the petitioner approached this Court by way of this original petition for appointment of Arbitrator.
5. The Clause 22(a) of the agreement reads as follows: "22. (a) All disputes, differences and/or claim, arising out of this agreement, whether during its subsistence or thereafter shall be settled by arbitration 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 an Arbitrator nominated by the Managing Director of the Lender. It is agreed that the sole Arbitrator nominated under this Clause shall adjudicate the disputes, differences and/or claims on the basis of the written pleadings, documents and submissions filed by the parties, dispensing with the oral evidence and technical formalities. The award given by such an arbitrator shall be final and binding on the Borrower/Co-Borrower to this agreement."
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6. By referring the above clause, the learned counsel for the respondent would submit that the present dispute is arising out of the loan agreements and he would also request for a direction that the Arbitrator shall decide the dispute without dispensing with the oral evidences and technical formalities. Therefore, he would object the said provision of Clause 22(a) of the loan agreement and insisted that the trial has to be conducted based on the adversarial system of trial.
7. Both the learned counsel requested this Court to appoint a common person as Arbitrator in all these petitions.
8. The learned counsel for the petitioner had also agreed with the submission made by the respondent.
9. Heard the learned counsel for the petitioner and the respondent and also perused the materials available on record. 5/9
10. In view of the above, this Court is satisfied that the present dispute is arising out of the loan agreements and the same is arbitrable in terms of Clause 22(a) of the said agreement and is inclined to appoint an Arbitrator. Accordingly, this Court feels it appropriate to pass the following order: i) Mr.D.Selvaraju, Advocate, No.303, Law Chambers, High Court Buildings, Chennai 600 104, Mobile No:9444088288, is appointed as sole arbitrator to enter upon reference and adjudicate the disputes inter se the parties ii) The learned Arbitrator appointed herein, shall after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of the Order. The learned Arbitrator is also directed to decide the matter without influenced by the observations made by this Court in the present order.
iii) The learned Sole Arbitrator appointed herein shall be paid fees and other incidental charges, as per the Schedule IV of the Act and the same shall be borne by the parties equally. In the event of non-appearance of the respondent, the petitioner shall bear the entire remuneration and other expenses 6/9
and thereafter, the petitioner can recover the same directly from the respondent and vice versa.
11. As contended by the learned counsel for the respondent, from a perusal of Clause 22(a) of the agreement, it appears that there is a provision for Arbitrator to decide the dispute on the basis of the written pleadings, documents and submissions filed by the parties, dispensing with the oral evidences and technical formalities. However, this Court is of the view that when the trial is conducted in the adversarial system of trial, there is no question of dispensing with the oral evidence and technical formalities. Therefore, this Court directs the learned Arbitrator to conduct the proceedings by permitting the parties to let in the oral and documentary evidences and also to permit them to make the oral and written submissions without dispensing any procedure as stated in Clause 22(a) of the agreement.
12. Further it is made clear that it is up to the parties to make their claim and counter claim before the learned Arbitrator and the learned Arbitrator shall decide the same on merits and in accordance with law. 7/9
13. Accordingly, these Arbitration Original Petitions are allowed. No costs.
26.06.2023 Speaking/Non-speaking order Index : Yes / No nsa 8/9
KRISHNAN RAMASAMY.J., nsa Arb.O.P (Com.Div.)Nos.203 to 214 of 2023 26.06.2023 9/9