Sriniwas Ramchandra Deo vs Religare Finvest Ltd

Veena Birbal, J.—Present is an appeal u/s 37 of the Arbitration and Conciliation Act (hereinafter referred to as ''the Act'') for setting aside the impugned order dated 17.01.2012 passed by the learned ADJ, Tis Hazari Court, Delhi wherein objections filed by the appellant u/s 34 of the Act have been dismissed. Briefly, the facts relevant for the disposal of the present appeal are as under:-

The appellant had approached respondent-company for the grant of loan. After considering the loan application, the respondent-company granted a loan of Rs. 10 lakhs to the appellant and a loan agreement was entered into between the parties. The said amount was to be repaid with interest in 48 equal monthly instalments of Rs. 30032/- each. After availing the loan from the respondent company, the appellant had failed to adhere to the terms of repayment of loan and committed repeated defaults. The respondent company requested the appellant to pay the monthly instalments in respect of the loan agreement including interest. A legal notice was also issued to the appellant on 19.06.2009. However, no response was given by the appellant to the notice. As per the loan agreement, it was agreed between the parties that in case of any dispute between them, the matter will be settled by the Sole Arbitrator as per the provisions of the Act. Accordingly, the matter was referred to the Sole Arbitrator i.e. Sh. Satish Kumar.

On entering the reference of the dispute, the Arbitrator gave a notice of appearance dated 11.07.2009 to the parties for appearing before him on 07.08.2009. The appellant did not appear. Thereafter, another notice dated 13.08.2009 was sent to him by registered AD post for appearing before the Arbitrator on 11.09.2009. Despite that, the appellant did not appear. The Arbitrator proceeded ex parte against the appellant. The respondent had filed the claim before the Arbitrator along with the documents. Thereafter, evidence of respondent/claimant was recorded and finally ex parte award dated 10.03.2010 was passed against the appellant. The appellant challenged the said ex parte award before the learned ADJ by filing a petition u/s 34 of the Act. The said petition was also dismissed.

Aggrieved with the same, the present appeal has been filed.

Learned counsel for appellant has contended that the appellant had informed his inability to attend the proceedings due to ailment vide letters dated 30.07.2009 and 05.09.2009 respectively as such the Arbitrator ought not have proceeded in the matter in the absence of the appellant. It is contended that the award passed in the matter is against the principles of natural justice as the appellant had not been heard in the matter, as such the same is liable to be set aside.

Learned counsel for appellant has further contended that appellant had given some payment to the respondent for which the Arbitrator has not given any adjustment. However, on being asked as to whether he had filed any statement of accounts before the learned ADJ or before this court showing the payments made, as is alleged, the counsel for appellant has replied in the negative.

Perusal of record shows that the learned Arbitrator after entering the appearance had issued notices dated 11.07.2009 and 13.08.2009 to the appellant to appear before him on 07.08.2009 and 11.09.2009 respectively, either in person or through counsel engaged by him. Despite service of arbitral notices, appellant had not appeared before the Arbitrator and as such, was proceeded ex parte. There is no denial by the appellant that he did not enter into any loan agreement with the respondent. There is no denial that default occurred in the repayment. The parties have agreed in the loan agreement that in case of any dispute or claim arising out of the agreement, the same would be settled by the Sole Arbitrator as per the provisions of the Act. The place of arbitration has also agreed to be New Delhi. Twice notices of appearance have been sent to him. The letters sent by the appellant to the Arbitrator are dated 30.07.2009 and 05.09.2009 seeking adjournment in the matter. The ld. Arbitrator has passed the award on 10.03.2010. There is nothing on record to show from 05.09.2009 to 10.03.2010 as to what efforts were made by the appellant for pursuing the proceedings before the Arbitrator. The appellant ought to have pursued the matter before the Arbitrator once it was in his knowledge that the Arbitrator has been appointed and the proceedings have commenced against him. The ld Arbitrator has adjudicated the claim on merits. Appellant had been given ample opportunity to defend his case. The Arbitrator has considered the relevant documents including the loan agreement, ledger/statement of account while passing the award. In these circumstances, it cannot be said that the principles of natural justice have not been complied with. It is the appellant who has not availed the opportunity.

In view of above discussion, no illegality is seen in the impugned order which calls for interference of this court.

The appeal stands dismissed.

CM No. 9865/2012 (stay)

In view of the order on the main appeal, no further orders are required on the present application.

The same stands disposed of.