Mr.Nachiketa Vijay and Mr.Rajkumar Dahiya, Advocates. Suri v. RISHAB SHARMA S/O RAM PRAKASH SHARMA R/O PLOT NO

Through: Mr.Nachiketa Vijay Mr.Rajkumar Dahiya, Advocates. Suri Versus RISHAB SHARMA S/O RAM PRAKASH SHARMA R/O PLOT NO. 89, S-2 BAJRANG DHAM-9, TIRUPATI VIHAR, GOVINDPURA KALWAR ROAD JAIPUR, RAJASTHAN – 302012 Also at: HIMALAYA STORE, G -1 JAGDAMBA TOWER, AMRAPALI CIRCLE Signature Not Verified Signed By:NEHA CHOPRA Signing Date:29.05.2025 16:49:48 1 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV VAISHALI NAGAR, JAIPUR RAJASTHAN - 302021 .... RESPONDENT Through: None. HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV JUDGEMENT PURUSHAINDRA KUMAR KAURAV, J. (ORAL)

1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the 1996 Act) by the petitioner, seeking appointment of an Arbitrator, to adjudicate upon the disputes that have arisen between the parties under the Loan Agreement dated

24.12.2019.

2. A perusal of the record would indicate that notice was directed to be issued to the respondent on 18.03.2025. On 29.04.2025, the respondent was represented through counsel and time was sought to file the reply. Again on

14.05.2025, time was granted to the respondent to enable him to file the reply and hearing of the instant case stood deferred for today. Even today, there is no representation on behalf of the respondent, despite the matter being called out in the second round. Even no reply has been placed on record.

3. As per the case set up by the petitioner, it sanctioned a personal loan of an amount of Rs.10,00,000/- along with interest at the rate of 11.49% which was to be paid in 60 EMIs of Rs.21,988/- each on the 5th day of every month. Accordingly, a Loan Agreement dated 24.12.2019 was executed Signature Not Verified Signed By:NEHA CHOPRA Signing Date:29.05.2025 16:49:48 2 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV between the parties. Respondent appears to have made a partial payment of the loan amount. Thereafter, the respondent defaulted and neglected to pay various EMIs since 05.04.2023 and defaulted on the payments of EMIs as evident from the Statement of Account which is duly maintained by the petitioner in the regular course of its business. The respondent has also defaulted in adhering to the financial discipline as mentioned above.

4. Accordingly, the petitioner issued a legal notice dated 31.12.2024 invoking the arbitration clause (Clause 9) of the Loan Agreement dated

24.12.2019, seeking the appointment of a Sole Arbitrator.

5. The Court takes note of Clause 9 of the Loan Agreement dated

24.12.2019, which reads as under:- “9. Arbitration If any dispute, difference or claim arises between any of the Obligors and the Lender in connection with the Facility or as to the interpretation, validity, implementation or effect of the Facility Documents or as to the rights and liabilities of the parties under the Facility Documents or alleged breach of the Facility Documents or anything done or omitted to be done pursuant to the Facility Documents, the same shall be settled by arbitration to be held in [Mumbai/Delhi/Kolkata/Chennai] as may be decided by the Lender in accordance with the Arbitration and Conciliation Act, 1996, or any statutory amendments thereto and shall be referred to a sole arbitrator to be appointed by the Lender. The award of the arbitrator shall be final and binding on all parties concerned. The arbitration proceedings shall be in English language. Cost of arbitration shall be borne by the Obligors.”

6. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. This Court as well in the order dated 24.04.2025 in the case of ARB.P. 145/2025 titled Signature Not Verified Signed By:NEHA CHOPRA Signing Date:29.05.2025 16:49:48 3 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV as Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd has extensively dealt with the scope of interference at the stage of Section

11. The Court held as under:- “9. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. The Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish Spinning1, while considering all earlier pronouncements including the Constitutional Bench decision of seven judges in the case of Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re 2 has held that scope of inquiry at the stage of appointment of an Arbitrator is limited to the extent of prima facie existence of the arbitration agreement and nothing else.

10. It has unequivocally been held in paragraph no.114 in the case of SBI General Insurance Co. Ltd that observations made in Vidya Drolia v. Durga Trading Corpn.3, and adopted in NTPC Ltd. v. SPML Infra Ltd.,4 that the jurisdiction of the referral court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would not apply after the decision of Re: Interplay. The abovenoted paragraph no.114 in the case of SBI General Insurance Co. Ltd reads as under:- facie existence of “114. In view of the observations made by this Court in In Re: Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re: Interplay (supra).”