Neogrowth Credit Private Limited Vs Ikki Saree Centre & Ors. — Delhi HC (2025) — LawSathi Research

Neogrowth Credit Private Limited Vs Ikki Saree Centre & Ors. — Delhi HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Withdrawal permitted with liberty to issue a fresh notice under Section 21 of the Arbitration & Conciliation Act, 1996 and thereafter approach this Court by filing petitions under Section 11 of the Act.

Issue for consideration

Whether the petitioner is entitled to appointment of a substitute arbitrator under Section 15 of the Arbitration & Conciliation Act, 1996 in respect of disputes arising out of its loan agreements with the respondents. +1 more

Court's answer

Permission and liberty granted to the petitioner to withdraw the petitions and to issue a fresh notice under Section 21 of the Arbitration & Conciliation Act and thereafter approach this Court by filing petitions under Section 11 of the Act.

Ratio / Principle

The petitions are disposed of as withdrawn along with pending application(s), if any.

Key takeaways

The petitioner's unilateral appointment of an arbitrator, following the respondents' failure to repay loans, is hit by the law laid down by the Apex Court in Perkins Eastman Architects DPC v. HSCC (India) Limited, (2020) 20 SCC 760, and Central Organisation for Railways Electrification (CORE) v. ECI SPIC SMO MCML (JV), 2024 SCC OnLine 3219.obiter¶25
The Court made clear that it has not made any observation on the merits of the case.ratio¶33

Detailed headnote1 paragraphs

Delhi High Court (Subramonium Prasad, J.), 18 February 2025 - Four petitions under Section 15 of the Arbitration & Conciliation Act, 1996 (O.M.P. (T) (COMM.) 119, 124, 126 and 130 of 2024) were filed by Neogrowth Credit Private Limited, an NBFC, seeking appointment of a substitute arbitrator after the respondent borrowers defaulted in repayment of loans. The Court recorded that the petitioner had unilaterally appointed the arbitrator, an appointment hit by the law laid down by the Apex Court in Perkins Eastman Architects DPC v. HSCC (India) Limited, (2020) 20 SCC 760, and Central Organisation for Railways Electrification (CORE) v. ECI SPIC SMO MCML (JV), 2024 SCC OnLine 3219. On the Court's suggestion that a fresh notice under Section 21 be issued and the Court be approached under Section 11, learned counsel sought leave to withdraw; permission and liberty were granted and the petitions, along with pending applications, were disposed of as withdrawn, the Court expressly making no observation on the merits.

$~69 to 72

IN THE HIGH COURT OF DELHI AT NEW DELHI

O.M.P. (T) (COMM.) 119/2024 & I.A. 43557/2024 NEOGROWTH CREDIT PRIVATE LIMITED ....Petitioner Through: Mr. Ajay Goyal, Ms. Jyoti Sharma, Mr. Arvind Kumar, Advocates

versus

TRIPPLE S GARMENTS & ANR ......Respondents

Through:

O.M.P. (T) (COMM.) 124/2024 & I.A. 43581/2024 NEOGROWTH CREDIT PRIVATE LIMITED .....Petitioner Through: Mr. Ajay Goyal, Ms. Jyoti Sharma, Mr. Arvind Kumar, Advocates versus

SHRI SHYAM SUPER STORE & ANR ......Respondents

Through:

- O.M.P. (T) (COMM.) 126/2024 & I.A. 43584/2024, I.A. 43585/2024 NEOGROWTH CREDIT PRIVATE LIMITED .....Petitioner

Through: Mr. Ajay Goyal, Ms. Jyoti Sharma, Mr. Arvind Kumar, Advocates

versus

SHIVAM COMPUTERS AND COMMUNICATION & ANR. .....Respondents

Through:

- O.M.P. (T) (COMM.) 130/2024 & I.A. 43839/2024 NEOGROWTH CREDIT PRIVATE LIMITED .....Petitioner

This is a digitally signed order.

Page 1 of 3

O.M.P. (T) (COMM.) 119/2024 etc.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 16:33:32

Through: Mr. Ajay Goyal, Ms. Jyoti Sharma, Mr. Arvind Kumar, Advocates

versus

IKKI SAREE CENTRE & ORS ......Respondents Through:

CORAM: HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD

The instant petitions under Section 15 of the Arbitration & Conciliation Act, 1996 have been filed by the Petitioner for appointment of a substitute Arbitrator.

Material on record indicates that the Petitioner, which is a NonBanking Financial Company (NBFC), entered into loan agreements with the Respondents. Since there was failure on the part of the Respondents in repayment of loans, the Petitioner unilaterally appointed an Arbitrator to adjudicate upon the disputes between the parties. The said appointment is hit by the law laid down by the Apex Court in Perkins Eastman Architects DPC & Anr. v. HSCC (India) Limited, (2020) 20 SCC 760 and also in Central Organisation for Railways Electrification (CORE) v. ECI SPIC SMO MCML (JV) A Joint Venture Company, 2024 SCC OnLine 3219.

When this Court gave a suggestion to the learned Counsel for the Petitioner that the Petitioner has to once again issue a notice under Section 21 of the Arbitration & Conciliation Act and approach the Court under Section 11 of the Arbitration & Conciliation Act, the learned Counsel for the Petitioner seeks permission to withdraw the present petitions with liberty to issue a fresh notice under Section 21 of the Arbitration & Conciliation Act

Page 2 of 3

O.M.P. (T) (COMM.) 119/2024 etc.

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 16:33:32

and then approach this Court by filing petitions under Section 11 of the Arbitration & Conciliation Act.

Permission and liberty, as prayed for, is granted.

The petitions are disposed of as withdrawn along with pending application(s), if any.

It is made clear that this Court has not made any observation on the merits of the case.

SUBRAMONIUM PRASAD, J

FEBRUARY 18, 2025 hsk

Page 3 of 3

O.M.P. (T) (COMM.) 119/2024 etc.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 16:33:32