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Caterpillar Financial Services India Private Limited v. Sri Buddha Engineering and Constructions Pvt. Ltd.

Karnataka HC5 Feb 2026CMP/569/2025

Case brief

AI extract

What is this about?

Section 11(6) Arbitration and Conciliation Act 1996; appointment of sole arbitrator; pre-named arbitrator in clause 21 of loan and security agreement; borrower default in EMI repayment; unanswered arbitration notice; served but unrepresented respondents; Karnataka High Court, Bengaluru; order dated 05.02.2026; arbitrator D.R. Venkatasudarshana (Retd District Judge).

What did the court decide?

Nomination of Sri. D.R.Venkatasudarshana, District Judge (retired), as arbitrator to resolve the dispute in terms of clause 21 of the loan and security agreement (Annexure-B); Registry directed to forward the order to the arbitrator and the Director, Arbitration and Conciliation Center, Bangalore, and to return original/certified documents; pending IA(s) disposed accordingly. ¶62

Caterpillar Financial Services India Private Limited Vs Sri… — Arbitration | Karnataka HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner made out grounds to refer the dispute to arbitration in terms of clause 21 of the loan and security agreement (Annexure-B), as per the provisions of the Arbitration and Conciliation Act and the Rules.

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Court's answer

An arbitration clause (clause 21) existed and a dispute arose between the parties; the dispute has to be resolved through an arbitrator and the petitioner has made out grounds to refer the arbitral dispute to the arbitrator (point answered in the affirmative).

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Ratio / Principle

Sri. D.R.Venkatasudarshana, District Judge (retired), is nominated as arbitrator to resolve the dispute between the parties in terms of clause 21 of the loan and security agreement vide Annexure-B, as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules.

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Detailed headnote1 paragraphs

High Court of Karnataka (Ashok S. Kinagi, J.), by oral order dated 05.02.2026, allowed Civil Misc. Petition No. 569 of 2025 filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 by Caterpillar Financial Services India Private Limited against Sri Buddha Engineering and Constructions Pvt Ltd, Koditham Vara Lakshmi and Koditham Rajasekhar. The parties had executed a loan and security agreement dated 27.11.2024 (No.808/70004591, Annexure B) for ₹1,25,37,500/-, repayable in 48 EMIs of ₹3,22,191/- (15.01.2025 to 15.11.2028); the respondents defaulted, and the petitioner invoked clause 21 (arbitration by a sole arbitrator) by notice dated 08.08.2025 (Annexure-E), which went unanswered. Finding that an arbitration clause existed and a dispute had arisen, and noting the served respondents were unrepresented, the Court answered its point in the affirmative and nominated Sri D.R. Venkatasudarshana, District Judge (retired), as arbitrator under clause 21.

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NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF FEBRUARY, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE ASHOK S.KINAGI

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CIVIL MISC. PETITION NO. 569 OF 2025

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BETWEEN:

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CATERPILLAR FINANCIAL SERVICES INDIA PRIVATE

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Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA

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LIMITED A COMPANY INCORPORATED AND REGISTERED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT GROUND FLOOR, CRESCENT 1, PRESTIGE SHANTINIKETAN WHITEFIELD, HOODI, BENGALURU, KARNATAKA-560048 REPRESENTED BY ITS AUTHORISED SIGNATORY MR. JOCKINS RC

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…PETITIONER

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(BY SRI. THAKUR RISHABH RAJ., ADVOCATE)

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AND:

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SRI BUDDHA ENGINEERING AND CONSTRUCTIONS PVT LTD.,

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NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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HOUSE NO.87-1388-N, SHESHADRI NAGAR HOUSING BOARD COLONY KURNOOL, ANDHRA PRADESH-518002

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KODITHAM VARA LAKSHMI 87-1388-N, NDK ROAD, NDL CHEK POST, SHESHADRI NAGAR KURNOOL, ANDHRA PRADESH-518002.

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KODITHAM RAJASEKHAR 87-1388-N, SHESHADRI NAGAR NEAR NANDYAL CHECK POST, SHESHADRI NAGAR KURNOOL, ANDHRA PRADESH-518002

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…RESPONDENTS

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(R1, R2 AND R3 ARE SERVED)

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THIS CMP IS FILED UNDER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT, PRAYING TO APPOINT A SOLE ARBITRATOR TO RESOLVE THE DISPUTES AND DIFFERENCES AMONGST THE PARTIES IN TERMS OF CLAUSE 21 OF THE LOAN AND SECURITY AGREEMENT DATED 27.11.2024 BEARING NO.808/70004591 AT ANNEXURE B EXECUTED BETWEEN THE PETITIONER AND THE RESPONDENTS.

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3 - NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI

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ORAL ORDER

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The petitioner filed this Civil Miscellaneous Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator to resolve the dispute between the parties to the petition in terms of clause 21 of the loan and security agreement dated 27.11.2024, vide Annexure-B.

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Brief facts, leading rise to the filing of this petition are as follows:

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The petitioner and respondents had entered into a loan agreement dated 27.11.2024 and have availed a loan amount of ₹1,25,37,500/- which was to be repaid together with interest in 48 equal monthly installments at ₹3,22,191/- per month commencing

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4 - NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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from 15.01.2025, and thereby ending on 15.11.2028. That, time was the essence of contract

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and the respondents were duty bound to pay EMIs on stipulated time, failing which, the respondents were liable for the overdue charges on the defaulted amount and other necessary charges incurred due to default in payment.

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In the loan and security agreement clause 21 provides an arbitration clause, according to which, if any dispute arose between the parties to the petition, the same shall be resolved through an arbitration. The petitioner invoked an arbitration clause by issuing a notice to respondents on 08.08.2025 vide Annexure-E. Despite the service of arbitration notice,

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the respondents did not reply to the arbitration notice. Hence, this petition.

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A notice was issued to the respondents. Despite the service of notice, the respondents remained unrepresented.

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NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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Heard the learned counsel for the petitioner, and

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perused the records.

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The point that would arise for consideration is as follows:

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“Whether the petitioner he submits that made out a ground to refer the dispute to the arbitration in terms of clause 21 of the loan and security agreement vide Annexure-B, as per the provisions of Arbitration and Conciliation Act and the Rules?

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It is an undisputed fact that the petitioner and respondents have entered into a loan agreement dated 27.11.2024 wherein the petitioner has advanced loan of amount of ₹1,25,37,500/- and time was the essence of contract for repayment of the loan amount along with the interest. The respondents committed a default on the petitioner. The petitioner invoked an arbitration clause as per clause 21 of the

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NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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loan agreement, by issuing a notice dated 08.08.2025, which reads as follows:

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21.2 Any dispute/s arising out of or in connection with this contract, including any question regarding its existence, validity, interpretation, or termination thereof, shall be referred to and finally resolved by arbitration of a sole Arbitrator as per the provisions of the Arbitration & Conciliation Act, 1996. The parties by mutual agreement have appointed and named the sole Arbitrator who shall be Mr. Sri. D.R.Venkatasudarshan, Dist. & Sessions Judge (Retd), Bengaluru. The sole Arbitrator's consent is also obtained before appointment and therefore he can enter upon the reference the moment one of the parties approach him for interim measures/ final award.

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From the perusal of the arbitration clause, if the dispute arises between the parties to the petition, the said dispute shall be resolved through an arbitration and also agreed for the name of the arbitrator i.e., by name Mr. D.R. Venkatasudarshan, District and

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NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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Sessions Judge (Retd). There is an arbitration clause and the dispute arose between the parties to the petition, and same has to be resolved through an arbitrator. Hence, the petitioner has made out a ground to refer the arbitral dispute to the arbitrator. Accordingly, the point is answered in the

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affirmative .

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In view of the above discussion, I proceed to pass the following order:

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ORDER

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i. The Civil Miscellaneous Petition is allowed .

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ii. Sri. D.R.Venkatasudarshana, District Judge (retired) is nominated as an arbitrator to resolve the dispute between the parties to the petition in terms of clause 21 of the loan and security agreement vide Annexure-B as per the provisions of Arbitration and Conciliation Act, 1996 and the Rules.

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8 - NC: 2026:KHC:7049 CMP No. 569 of 2025

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HC-KAR

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iii. The Registry is directed to forward a copy of this order to the learned Arbitrator and the Arbitrator, the Director and the Arbitration and Conciliation Center, Bangalore.

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iv. The Registry is directed to return the original/certified copy of the documents produced by the petitioner after retaining the photocopy of the same.

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v. Pending IA(s), if any, shall stand disposed of accordingly.

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Sd/(ASHOK S.KINAGI) JUDGE

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SKS CT:KHV

Caterpillar Financial Services India Private Limited v. Sri Buddha Engineering and Constructions Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Caterpillar Financial Services India Private Limited v. Sri Buddha Engineering and Constructions Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

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