Moneywise Financial Services Pvt Ltd v. Omega Manpower Solution

1. The present petition has been filed under section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘the A&C Act’) seeking appointment of a sole arbitrator to adjudicate the disputes between the parties.

SACHIN DATTA, J. (Oral)

2. The disputes between the parties have arisen in the context of a Master Loan Agreement dated 17.11.2018 executed between the petitioner and the respondents, in terms of which the respondent no.1 is a borrower, whereas the proprietor of respondent no.1 and respondent no.2 are coborrowers.

3. As per the said agreement, the petitioner disbursed a loan of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) to the respondents. The loan amount was payable into 36 equal instalments of Rs. 54,984/- (Fifty-Four Thousand Nine Hundred and Eighty-Four only).

4. Dispute/s have arisen between the parties on account of alleged default on the part of the respondents in paying the requisite instalments. The respondents failed to make the payment despite being granted opportunities to clear the outstanding dues.

5. The arbitration clause in the Agreement between the parties, is in the following terms: “10.[1] Arbitration: Any disputes, differences, controversies and questions directly or indirectly arising at any time hereafter between the Parties or their respective representatives or assigns, arising out of or in connection with this Agreement (or the subject matter of this Agreement), including, without limitation, any question regarding it existence, validity, interpretation, construction, performance, enforcement, rights and liabilities of the Parties, or termination (“Dispute”), shall be referred to a sole arbitrator duly appointed by the Lender. The language of the arbitration shall be English. The seat of the arbitration shall be at New Delhi and the language of proceedings shall be English. The award rendered shall be in writing and shall get out the reasons for the arbitrator’s decision. The costs and expenses of the arbitration shall be borne equally by each Party with, each party paying for its own fees and costs including attorney fees, except as may be determined by the arbitration tribunal. Any award by the arbitration tribunal shall be final and binding.”

6. Disputes having arisen between the parties, a loan recall/termination notice dated 27.12.2021 was issued by the petitioner followed by a notice invoking arbitration on 23.05.2024. However, the respondents failed to respond to the same.

7. In the above circumstances, the petitioner has approached this Court, through the present petition, seeking the appointment of a sole arbitrator to adjudicate the dispute.

8. The present proceedings, notice was issued by the Court on 27.08.2024. However, since none appeared on behalf of the respondents, a fresh notice was issued by the Court on 26.11.2024. The petitioner has taken the requisite steps to serve the respondents at their known address/es. The communication/s sent to the said address/es via speed post were returned with the notation, “Item Returned No such person in the address” and “Item Returned Addressee Left without instructions” whereas the communications sent via Courier at the various address/es of the respondents have been returned with the notations “Returned to Branch.” It is stated that the respondents have also been served via email at omegamanpowersolution@gmail.com.

9. Section 3 of the A&C Act contemplates that a written communication is deemed to have been received if it is sent to the addressee’s last known place of business or mailing address by any means which provides a record of the attempt to deliver it. In the present case, the petitioner has taken due steps to effect service on the respondents and has thereby discharged its onus to effect service on the respondents.

10. In the circumstances, the present petition is taken up for hearing and disposal, despite no appearance on behalf of the respondents.

11. Since the existence of the arbitration clause is evident from a perusal of the Master Loan Agreement, there is no impediment to constituting an arbitral tribunal for adjudicating the disputes between the parties, as mandated in terms of the judgments of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532 and Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re, 2023 SCC OnLine SC 1666.

12. Further, in terms of the judgments of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd (2020) 20 SCC 760, TRF Limited v. Energo Engineering Projects Ltd, (2017) 8 SCC 377 and Bharat Broadband Network Limited v. United Telecoms Limited, 2019 SCC OnLine SC 547, it is incumbent on this Court to appoint an independent sole arbitrator to adjudicate the disputes between the parties.

13. Accordingly, Ms. Neeru Vaid, Advocate (Mobile No.+91 958261983[4]) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties.

14. The respondents shall be at liberty to raise preliminary objections as regards arbitrability/jurisdiction, if any, which shall be decided by the arbitrator, in accordance with law.