Alwar Rajasthan Through Its Authorized Signatory Mr. Sagar Mal vs Balbeer Singh S/o Late Shri Mahendra Singh S/o Shri

Judgment

1. Balbeer Singh S/o Late Shri Mahendra Singh S/o Shri Mahendra Singh, Resident Of 104, Near Khandelwal School, Neb, Subhash Nagar, Alwar Rajasthan.

2. Trilok Singh S/o Late Shri Mahendra Singh, R/o 104, Near Khandelwal, School, Neb, Subhash Nagar, Alwar Rajasthan.

Harjeet Kaur W/o Late Shri Mahendra Singh Spouse/o Shree Mahendra Singh, R/o 104, Near Khandelwal School, Neb, Subhash Nagar, Alwar Rajasthan. ----Respondents For Petitioner(s) : Mr. Naman Yadav for Mr. Pankaj Gpta For Respondent(s) : Mr. Jiteshu Chugh Mr. Rajendra Prasad Gautam JUSTICE ANOOP KUMAR DHAND Order 03/07/2025

1. The instant Arbitration Application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘Act of 1996’) has been filed by the applicant-company for appointment of an Arbitrator to adjudicate/resolve the dispute between the parties arising out of the agreement dated 22.05.2018 containing arbitration clause 11.16, which reads as under:- “Arbitration Clause 11.16: Unless the same falls within the jurisdiction of the Debts Recovery Tribunal established under the (2 of 6) [ARBAP-58/2024] Recovery of Debts Due to Banks and Financial Institutions Act, 1993, any and all claims and disputes arising out of or in connection with this Agreement or its performance shall be settled by arbitration by a single Arbitrator to be appointed by the company. The arbitration shall be held in Jaipur (Rajasthan) in accordance with the provisions of the Arbitration and Conciliation Act, 1996”.

2. Counsel for the petitioner submits that certain amount was borrowed by the respondents and the same was not repaid by them, hence a dispute has arisen between the parties and by invoking the arbitration clause, contained under the loan agreement, the Arbitrator was appointed, who passed the award on 20.11.2021, which was assailed by the respondents by way of filing objection under Section 34 of the Act of 1996 before the Commercial Court No. 1, Jaipur Metropolitan-II. The said objection, submitted by the respondents, was allowed on the ground that as per the judgment passed by the Hon’ble Apex Court in the cases of TRF Ltd. Versus Energo Engineering Projects Ltd.: reported in AIR 2017 SC 3099 and Voestalpine Schienen Gmbh Vs. Delhi Metro Rail Corporation Ltd., reported in 2017 (4) SCC 665, the interested party to the lis is not authorized to appoint the Arbitrator and unilateral appointment of Arbitrator is not sustainable in the eyes of law and therefore, in the light of the judgments passed by the Hon’ble Apex Court in the cases of TRF Ltd. (Supra) and Voestalpine Schienen (Supra), the award passed by the Arbitrator was set aside vide order dated 07.12.2023. Counsel submits that after passing of the aforesaid order, a fresh notice was served upon the respondents for settlement of the dispute through arbitration, in terms of the arbitration clause of the loan agreement. Counsel submits that under these circumstances, since the respondents (3 of 6) [ARBAP-58/2024] have not given consent for appointment of the Arbitrator, the instant application has been submitted under Section 11(6) of the Act of 1996.

3. Counsel for the respondents opposed the arguments raised by counsel for the petitioner and submitted that once the order/award passed by the Arbitrator has been quashed and set aside by the Commercial Court, then there was no reason or occasion available with the petitioner to file successive application i.e. the instant arbitration application. Counsel submits that prior to filing of the instant application, no notice was ever served upon the respondents. He further submitted that certain cheques were issued by the respondents to the petitioner which were dishonored, hence, a complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the N.I. Act’) has been submitted by the petitioner against the respondents and this fact has not been disclosed in the instant application. Counsel submits that since the complaint under Section 138, filed against the respondents is lying pending before the Competent Court of Law, therefore, the instant Arbitration application is not maintainable and the same is liable to be rejected.

4. Heard and considered the submissions made at the Bar and perused the material available on record.

5. Perusal of the record indicates that certain amount was borrowed by the respondents for which a loan agreement was executed between the parties on 22.05.2018 and when the said borrowed amount was not refunded, the petitioner invoked the arbitration clause and an Arbitrator was appointed, who passed the award on 20.11.2021, which was assailed by the respondents (4 of 6) [ARBAP-58/2024] before the Commercial Court by way of filing objection under Section 34 of the Act of 1996 and the said objection filed by the respondent No. 3 was allowed in the light of the judgment passed by the Apex Court in the cases of TRF Ltd. (Supra) and Voestalpine Schienen (Supra), hence, under this eventuality in order to settle the dispute, a registered notice was again sent by the petitioner to the respondents on 16.02.2024.

6. It is settled proposition of law that as per Section 27 of the General Clauses Act, if a registered notice is sent on any given address, then it shall be presumed that notice has been received by the receiver, unless the same is returned back by the postal department. Hence, it cannot be relied upon that the respondents have not received the notice. The object of sending the notice is to make aware the other side/respondent about the dispute between the parties, hence the objection taken by the respondents is not maintainable.

7. This Court finds no merit and substance in the arguments raised by counsel for the respondents that the complaint submitted by the petitioner which was under Section 138 of the N.I.Act is not maintainable, inasmuch as the complaint has been filed by the petitioner, for the alleged dishonoring of cheques given by the respondents.

8. This Court finds that the dispute raised between the parties with regard to non-refund of the borrowed amount by the respondents, is required to be adjudicated by the Arbitrator.

9. In view of the reasons stated above, the instant application stands allowed and this Court appoints Shri Mahaveer Prasad Sharma (Retd. District Judge) Resident of C-10, Near Ojha Ji Ka (5 of 6) [ARBAP-58/2024] Bag, Gandhi Nagar, Tonk Road, Jaipur-302015, as Sole Arbitrator to adjudicate/resolve the dispute between the parties.

10. The appointment of the Sole Arbitrator is subject of declaration being made under Section 12 of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') with respect to the independence and impartiality and ability to devote sufficient time to complete the arbitration proceedings within the prescribed period.

11. The arbitration fee of the Sole Arbitrator shall be payable in accordance with the provisions contained in the Manual of Procedure of Alternative Dispute Resolution, 2009 as amended by the Manual of Procedure for Alternative Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017 read with 4th schedule appended to the Act of 1996 or as determined by the Arbitrator with consensus of parties.

12. The Registry is directed to intimate the Arbitrator-Shri Mahaveer Prasad Sharma (Retd. District Judge) Resident of C-10, Near Ojha Ji Ka Bag, Gandhi Nagar, Tonk Road, Jaipur-302015 for his approval and declaration in terms of Section 11(8) read with Section 12(1) of the Act of 1996.

13. All issues raised by the parties before the Arbitrator shall be considered in accordance with law.

14. Since as per Section 29A of the Act of 1996, the arbitration proceedings are required to be concluded within the scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on 25.07.2025 or on any other date as informed by the Arbitrator subject to agreement by the parties. Furthermore, the parties shall provide their respective E-mail/ (6 of 6) [ARBAP-58/2024] contact number/ mobile number and/or also of their authorized representatives/ Lawyers appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information/communication to the parties, whenever required. The information send by the Arbitrator, on such address/ E-mail/ cellphone of the parties or to their authorized representatives/ Lawyers, shall be treated as sufficient communication unless same is not changed.

15. Accordingly, the present arbitration application stands disposed of. Ashu/180 (ANOOP KUMAR DHAND),J