Dismissed

Suresh Kumar T.V. v. Sundaram Finance Ltd.

Kerala HC16 Dec 2022AR/74/2022

Case brief

AI extract

What is this about?

In a request under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996, the Court dismissed the petition. The loan agreement designated Chennai as the sole seat of arbitration, thereby depriving this Kerala Court of jurisdiction to entertain the matter.

What did the court decide?

The Arbitration Request was dismissed as the Court lacked jurisdiction given the seat of arbitration was Chennai.

Suresh Kumar T.V. Vs Sundaram Finance Ltd. — Arbitration | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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FRIDAY, THE 16^TH DAY OF DECEMBER 2022 / 25TH AGRAHAYANA, 1944 AR NO. 74 OF 2022

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PETITIONERS:

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1 SURESH KUMAR T.V. AGED 67 YEARS S/O. VIJAYA KURUP P.N, RESIDING AT 11 744A, THEKKINETH HOUSE, POYYACHIRA, NEAR PRESS ACADEMY, KAKKANAD, ERNAKULAM - 682030. 2 P.P. FRANCIS S/O. P. PAILY, RESIDING AT PEREPARAMBIL HOUSE, MARKET ROAD, TRIPUNITHURA, THEKUMBHAGOM, ERNAKULAM - 682301.

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BY ADVS. G.HARIHARAN PRAVEEN.H. K.S.SMITHA V.R.SANJEEV KUMAR ANJALY T.A SIDHIQUL AKBAR K.A.

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RESPONDENT:

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SUNDARAM FINANCE LTD. CHITTOOR ROAD, KACHERIPADY, KACHERIPADY, CHITTOOR ROAD, KACHERIPADY, ERNAKULAM - 682018, REPRESENTED BY ITS BRANCH MANAGER. BY ADV. PANICKER V.P.K

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THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 16.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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AR No.74 of 2022

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ORDER

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Dated this the 16^th day of December, 2022

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The petitioners are before this Court invoking Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996. The petitioners seek to appoint an Arbitrator for and on behalf of the parties for the settlement of disputes listed by the petitioners in accordance with the terms of agreement dated 04.08.2017.

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The petitioners state that the 1^st petitioner availed a loan from the respondent-Company for the purchase of a bus bearing registration No.KL-07CL-3601 as per loan agreement dated 04.08.2017. The petitioners were paying loan installments promptly. Due to countrywide Covid-19 lockdown, the entire transport industry collapsed and the petitioners could not repay the amount.

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The petitioners state that the respondent hastily initiated arbitration proceedings under Sections 11(5) and 11(6)

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AR No.74 of 2022

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of the Arbitration and Conciliation Act and unilaterally appointed a Sole Arbitrator without making any request as provided under Section 11(3) (a) of the Arbitration and Conciliation Act.

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The petitioners would urge that the unilateral appointment of a Sole Arbitrator is frowned upon by the Hon'ble Apex Court in TRF Ltd. v. Engineering Projects Ltd. [2017 (8) SCC 377]. Therefore, this Court shall interfere in the matter and appoint an independent Arbitrator.

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Standing Counsel entered appearance on behalf of the respondent and submitted that the huge amounts were advanced to the petitioners towards purchase of bus. The petitioners failed to remit the loan amount along with interest. The vehicle was surrendered to the respondent. The vehicle was sold and the amounts adjusted towards liability. Still a huge amount is due from the petitioners. In spite of mediation through the High Court Mediation Centre, the matter could not be resolved.

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AR No.74 of 2022

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The Standing Counsel for the respondent submitted that Annexure-R1 is the loan agreement executed by the 1^st petitioner and the respondent. Article 22 of Annexure-R1 agreement would show that the seat of arbitration should be in Chennai. Therefore, this Court has no jurisdiction to entertain the Arbitration Request.

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I have heard the learned counsel for the petitioners

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and the learned Standing Cousel for the respondent.

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Article 22 of Annexure-R1 agreement executed by the

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1^st petitioner and the respondent reads as follows:

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a) All disputes, differences and/or claim, arising out of this Agreement, whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provisions of The Arbitration and Conciliation Act, 1996 or any statutory amendments thereof and shall be referred to the sole Arbitration of an Arbitrator nominated by the Managing Director of the Lender. It is agreed that the Sole Arbitrator nominated under this clause shall adjudicate the disputes, differences and/or claims on the basis of written pleadings, documents and submissions filed by the parties, dispensing with the oral evidence and technical formalities. The award given by such an arbitrator shall be final and binding on the Borrower/Co-Borrower to this agreement.

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AR No.74 of 2022

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It is a term of this agreement that in the event of such an arbitrator to whom the matter has been originally referred is dying or being unable to act for any reason, the Managing Director of the Lender, at the time of such death of the arbitrator or of his inability to act as arbitrator, shall appoint another person to act as arbitrator. Such a person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.

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(b) The arbitrator so appointed herein above, shall also be entitled to pass an Award on the hypothecated asset/s and also on any other securities furnished byor on behalf of the borrower.

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(c) It is agreed that within 45 days from the date of receipt of the Arbitral Award, any party, with notice to the other party, may request the Sole Arbitrator to correct any computation errors, any clerical or typographical errors or any other errors occurring in the Award or to give an interpretation of a specific point or part of the Award.

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(d) It is agreed that within 45 days from the date of receipt of the Arbitral Award, any party, with notice to the other party, may request the Sole Arbitrator to make an additional Arbitral Award as to the claims presented before the Sole Arbitrator but omitted from the Arbitral Award.

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(e) It is further agreed that the Sole Arbitrator is entitled to correct errors on his/her own initiative or at the request of any one of the parties, and/or to give an interpretation of a specific point or part of the Award, or to make an additional Arbitral Award including the claims that have been omitted from the original Arbitral Award without notice to the parties within the time-limit mentioned under the Act, provided such errors,

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AR No.74 of 2022

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interpretation or Inclusion do not affect the merits and interest of the parties.

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(f) The Venue of arbitration shall be CHENNAI.

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The office of the respondent is also at Chennai. The respondent

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would submit that the final execution of the agreement was also

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in Chennai.

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After a perusal of Article 22 wherein both parties have agreed that the venue of arbitration shall be Chennai, and taking into consideration the other facts of the case, I am of the view that Annexure-R1 contemplates the seat of Arbitration as Chennai. Therefore, no Arbitration Request is maintainable before this Court.

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The Arbitration Request is therefore dismissed.

Sd/-

N. NAGARESH

JUDGE

sss

AR No.74 of 2022

APPENDIX OF AR 74/2022

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PETITIONERS' ANNEXURE

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ANNEXURE I TRUE COPY OF THE RC STATUS OF THE VEHICLE BEARING REGISTRATION NO.KL-07CL3601. ANNEXURE II TRUE COPY OF THE NOTIFICATION ISSUED BY THE GOVERNMENT OF INDIA ON 24.03.2020. ANNEXURE III TRUE COPY OF THE LETTER SENT BY RESPONDENT'S OFFICE ADDRESSED TO SRI. DR. S.S.P DARWESH, FORMER PRINCIPAL DISTRICT AND SESSIONS JUDGE (SUPER TIME), INTIMATING HIM HIS APPOINTMENT AS THE SOLE ARBITRATOR ON 01.02.2021. ANNEXURE IV TRUE COPY OF THE NOTICE DATED 11.02.2022 SENT BY THE SOLE ARBITRATOR ADDRESSED TO THE PETITIONERS. ANNEXURE V TRUE COPY OF THE COMMUNICATION SENT BY THE RESPONDENT ON 30.12.2021 BY THE RESPONDENT ADDRESSED TO THE 2ND PETITIONER. ANNEXURE VI TRUE COPY OF THE DETAILED OBJECTION FILED BY THE PETITIONERS AGAINST THE LETTER DATED 02.03.2022 SENT BY THE RESPONDENT. ANNEXURE VII TRUE COPY OF THE INTERIM ORDER PASSED IN CONNECTED WITH A.R. NO.7/2022 DATED 19.01.2022 BY THIS HON'BLE COURT.

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RESPONDENT'S ANNEXURES

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ANNEXURE-R(1) A TRUE COPY OF THE LOAN AGREEMENT DATED 04/08/2017 BETWEEN THE 1ST PETITIONER AND THE RESPONDENT. ANNEXURE-R(2) THE DEED OF GUARANTEE EXECUTED BY THE 2ND PETITIONER DATED 04/08/2017 IN FAVOUR OF THE 2ND RESPONDENT.

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AR No.74 of 2022

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ANNEXURE-R(3) A TRUE COPY OF THE COMMUNICATION DATED 24/12/2021 FROM THE DEPUTY MANAGER (LEGAL) TO THE 2ND RESPONDENT. ANNEXURE-R(4) A TRUE COPY OF THE COMMUNICATION DATED 01/02/2022 ISSUED BY THE MANAGING DIRECTOR TO THE ARBITRATOR APPOINTING HIM AS THE ARBITRATOR TO ARBITRATE ON THE DISPUTE, WITH NOTICE TO THE PETITIONERS .

Suresh Kumar T.V. v. Sundaram Finance Ltd.

Case brief

What is this about?

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Suresh Kumar T.V. v. Sundaram Finance Ltd.

Case brief

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