MONEYWISE FINANCIAL SERVICES PVT LTD Vs OMEGA MANPOWER SOLUTION THROUGH ITS PROPRIETOR AND ANR
- Citation2024 SCC OnLine Del 8526
Ratio decidendi
The rule this decision rests on
Where a written communication under the Arbitration and Conciliation Act, 1996, section 3, is sent to an addressee's last known place of business or mailing address by means providing a record of delivery attempt—including speed post, courier, and email—and such communications are returned undelivered or the addressee is not found at the address, the petitioner has discharged its burden of effecting service, and the court may proceed to hear the petition for arbitrator appointment despite non-appearance of the respondent. Where an arbitration clause exists in a written agreement between parties, there is no impediment to constituting an arbitral tribunal to adjudicate disputes arising out of or in connection with that agreement, and the court is bound to appoint an independent sole arbitrator for this purpose. Where a respondent raises no challenge to arbitrability or jurisdiction at the stage of arbitrator appointment under section 11 of the Arbitration and Conciliation Act, 1996, the respondent retains the right to raise preliminary objections regarding arbitrability and jurisdiction before the arbitrator itself, which the arbitrator shall decide in accordance with law.
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 ‘the 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 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
Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:04.12.2024 23:19:15
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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
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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
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
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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
9582619834) 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). 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 DECEMBER 2, 2024/gm
Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:04.12.2024 23:19:15
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