TATA CAPITAL HOUSING FINANCE LIMITED v. ANUJ GARG & Ors.

Jain and Mr. Nishant Bhargava, Advocates for R-3. Ms. Ritika Gaur, Advocate for R-4. CORAM: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL)

1. The present Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 19961, seeking the appointment of a Sole Arbitrator from the panel of Arbitrators of Delhi International Arbitration Centre2 to adjudicate the disputes inter se the parties in terms of Clause 12.11 of the Home Loan Agreements dated 1 A&C Act 2 DIAC ARB.P. 927/2025

27.02.20173 executed between the parties.

2. The Dispute Resolution Clause, being Clause 12.11 of the Agreements, reads as under: “12.11 Dispute Resolution a) If any dispute, difference or claim arises between the parties hereto in connection with this Agreement or the Security hereof or the validity, interpretation, implementation or alleged breach of this Agreement or anything done or omitted to be done pursuant to this Agreement or otherwise in relation to the Security hereof, the parties shall attempt in the first instance to resolve the same through negotiation/ conciliation. If the dispute is not resolved through negotiation/ conciliation within thirty days after commencement of discussions or such longer period as the parties agree to in writing, then the same shall be settled by arbitration to be held at Chennai/Delhi/Mumbai Arbitration and Conciliation Act 1996, or any statutory amendments thereof and shall be referred to a person to be appointed by TCHFL. In the event of death, refusal, neglect, inability, or incapacity of the person so appointed to act as an Arbitrator, TCHFL may appoint a new arbitrator. The award of the arbitrator shall be final and binding on all parties concerned. in accordance with b) Notwithstanding anything contained hereinabove, in the event due to any change in the legal status of TCHFL or due to any change or amendment in law or notification being issued by the Central Government or otherwise, TCHFL comes under the purview of the Securitization and Reconstruction of Financial Interest Act, 2002 Assets and Enforcement of Security (“SARFAESI Act”) or the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the “DRT Act”), which enables TCHFL to enforce the security under the SARFAESI Act or proceed to recover dues from the Borrower under the SARFAESI Act and/or the DRT Act, the arbitration provisions hereinbefore contained shall, at the option of TCHFL, cease to have any effect and if arbitration proceedings are commenced but no award is made, then at the option of TCHFL such proceedings shall stand terminated and the mandate of the arbitrator shall come to an end from the date when such law or its change/amendment or the notification, becomes effective or the date when TCHFL exercises its option of terminating the mandate of arbitrator, as the case may be. Provided that neither a change in the legal status of TCHFL nor a change/amendment in law or issuance of notification as referred 3 Agreements ARB.P. 927/2025 to in this sub paragraph above, will result in invalidating an existing award passed by an Arbitrator pursuant to the provisions of this Agreement. c) The Borrower’s liability hereunder shall not be affected, terminated or prejudiced by the death, insolvency or any incapacity of the Borrower, but such liability shall continue in full force and effect and shall be binding on the Borrower’s successors as provided in the title and as the case may be.”

3. Material on record indicates that the Petitioner herein invoked arbitration in terms of Section 21 of the A&C Act vide legal notice issued on 26.08.2024.

4. This Court takes note of the fact that the Respondents stand served and in fact Order dated 07.04.2026 records that the Respondent No. 1 had no objection to the disputes being referred to arbitration. The matter was listed today only to ascertain whether the learned counsel for the Respondent No. 1 would also be appearing for Respondent No. 2.

5. Further, it is also noted that Respondent No. 2 is stated to be the mother of Respondent No. 1 and both are stated to be residing in the same premises.

6. Learned counsel appearing on behalf of the Petitioner also draws the attention of this Court to the fact that the Respondent No. 2 had, in fact, refused to accept service.

7. Learned counsel appearing on behalf of Respondent Nos. 3 & 4 submit that in view of the fact that their company is currently undergoing CIRP and IRP simultaneously, they would require to be deleted from the array of parties since a moratorium is under process.

8. This Court is of the view that with respect to Respondent Nos. 3 & 4, the aspect of their impleadment as a party to the present ARB.P. 927/2025 proceedings can be considered by the learned Sole Arbitrator and the same can be adjudicated upon. The said contention can be raised before the learned Arbitrator who may consider the same in accordance with law.

9. Further, this Court is of the considered view that with respect to Respondent Nos. 1 & 2, learned counsel appearing on behalf of the Respondent No. 1 had already accorded consent on his behalf and since none appears on behalf of Respondent Nos. 1 or 2 today, and considering that Respondent No. 2 is the mother of Respondent No. 1 and stays at the same premises, there arises no real requirement for keeping the matter pending before the Court.

10. At this juncture, it is apposite to note that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the A&C Act is no longer res integra. A three-Judge Bench of the Hon’ble Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning4, after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re5, comprehensively delineated the contours of judicial intervention at the stage of Section 11 of the Act. The excerpt of Krish Spg (supra) reads as under:- “(c) Judicial interference under the 1996 Act 110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators.