M/S MONEYWISE FINANCIAL SERVICES PRIVATE LIMITED Vs PUSHPA ENTERPRISES THROUGH ITS PROPRIETOR SHRI TARUN GUPTA AND ANR
- Citation2024 SCC OnLine Del 8501
Ratio decidendi
The rule this decision rests on
Where an arbitration agreement exists and a party seeking appointment of an arbitrator under section 11 of the Arbitration and Conciliation Act, 1996 has made numerous attempts to serve the other party by multiple means (courier, speed post, email) at known addresses, the court may appoint an arbitrator notwithstanding the non-appearance of the respondent, as the petitioner has discharged its burden of effecting service as contemplated by section 3 of the Act. A written communication is deemed received under section 3 of the Arbitration and Conciliation Act, 1996 if sent to the addressee's last known place of business or mailing address by any means providing a record of the attempt to deliver it, and the court may proceed with appointment of an arbitrator based on such service even if the respondent does not appear.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The present petition has been filed under section 11 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred as ‘A&C Act’) seeking appointment of a sole arbitrator to adjudicate the disputes between the parties. 2.
The disputes between the parties have arisen in the context of a
Master Loan Agreement dated 25.09.2017 executed between the petitioner and the respondents, in terms of which the respondent no.1 is a borrower, whereas respondent no. 2 is co- borrower. 3.
As per the said agreement, the petitioner disbursed a loan of Rs.
10,00,000/- (Rupees Ten Lakhs only) to the respondents. The loan amount was payable in 36 equal instalments of Rs. 36,656/- (Thirty-Six Thousand Six Hundred and Fifty-Six only). 4.
Dispute/s have arisen between the parties on account of alleged
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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 22.01.2020 was issued by the petitioner followed by a notice invoking arbitration on 20.06.2024. 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.
In the present proceedings, notice was issued by the Court on
07.10.2024. However, since none appeared on behalf of the respondents, a fresh notice was issued by the Court on 28.10.2024. An affidavit of service has been filed by the petitioner wherein it has been brought out that the
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respondent no.1 has been duly served by courier. As far as the respondent no. 2 is concerned, the petitioner has taken the requisite steps to serve the respondent at its 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 Insufficient Address” whereas the communications sent via Courier have been returned with the notations “Returned to Shipper,” “Holding,” “Return to Origin.” 9.
It is stated that the respondents have also been served via email at
t.gupta@gmail.com. 10.
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 made numerous attempts to effect service on the respondents and has thereby discharged its onus to effect service on the respondents. 11.
In the circumstances, the present petition is taken up for hearing and
disposal, despite no appearance on behalf of the respondents. 12.
Since the existence of the arbitration clause is evident from a perusal
of the Master Loan Agreement, there is no impediment in appointing an independent sole arbitrator for adjudicating the disputes between the parties as prayed for and as mandated 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, Bharat Broadband Network Limited v. United Telecoms Limited, 2019 SCC OnLine SC 547, SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532 and Interplay between Arbitration Agreements Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:04.12.2024 10:55:12
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under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re, 2023 SCC OnLine SC 1666. 13.
Accordingly, Mr. Naman Anand, Advocate (Mob. No.: +91
9988190262) 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. 15.
The learned Sole Arbitrator may proceed with the arbitration
proceedings subject to furnishing to the parties requisite disclosure as required under Section 12 of the A&C Act. 16.
Let the arbitration take place under the aegis of and as per the Rules
of the Delhi International Arbitration Centre (DIAC). It is directed accordingly. 17.
All rights and contentions of the parties in relation to the
claims/counter claims are kept open, to be decided by the learned Sole Arbitrator on their merits, in accordance with law. 18.
Needless to say, nothing in this order shall be construed as an
expression of opinion of this Court on the merits of the case. 19.
The present petition stands disposed of in the above terms.
SACHIN DATTA, J NOVEMBER 22, 2024/gm/sv
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