Authorized Representative Dinesh Sharma vs For Petitioner(s)

: Mr. Shiv Shanker Choudhary JUSTICE ANOOP KUMAR DHAND Order 15/05/2025

1. The instant arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”) has been filed by the applicant for appointment of Arbitrator to adjudicate/resolve the dispute pending between the parties arising out of the agreement dated 25.02.2017, which contains following arbitration clause:- “12. Arbitration, Jurisdiction & Governing Law 12.1 All claims, disputes or differences whatsoever which may at any time hereafter arise between the parties hereto concerning this agreement or its construction of effect or as to the rights, duties, obligations of liabilities of the parties hereto or either of them under or by virtue of or in connection with this agreement or any document executed or security created pursuant there to or otherwise as to any other manner in any way connected with or arising out of or in relation to the subject matter (2 of 6) [ARBAP-88/2024] to this agreement (including, without limitation, enforcement of security) shall be referred to the arbitration of a sole arbitrator appointed by the company. The arbitration shall be conducted in accordance with and subject to the provisions of the arbitration and conciliation act 1996 or any statutory modification or re- enactment thereof for the time being in force. The place of arbitration be as mentioned in serial no(15) of the schedule. 12.2 The provision of this agreement relating to arbitration shall not prejudice the company rights like criminal proceedings against the borrower and/or any other proceedings which would by their nature not be subject to the arbitration provisions of this agreement. 12.3 This agreement and the relationship between the parties shall be governed by and interpreted in accordance with the laws of India.”

2. Learned counsel for the applicant submits that certain amount was borrowed by the non-applicant which he failed to repay, hence, his account has been declared as Non-Performing Assets (NPA) and in terms of Clause 12 of the loan agreement, the matter was referred to the Arbitrator to pass an award in favour of the applicant. Thereafter, an execution application was submitted before the Commercial Court No.1, Jaipur, Metropolitan II but the same was dismissed in light of the judgment passed by the Hon’ble Apex Court in the case of TRF Ltd. Versus Energo Engineering Projects Ltd., while deciding Civil Appeal No.5306/2017, Cholamandalam Investment and Finance Company Ltd. Versus Amrapali Enterprises and Anr. (EC 122 of 2022), Bharat Broadband Network Ltd. Versus United Telecom Ltd. while deciding Civil Appeal No.3972/2019, Divisional Manager, H.P. State Forest Development Corporation Ltd. Versus Prem Lal, while deciding CMPMO No.58/2023 and Kotak Mahindra Bank Ltd. (3 of 6) [ARBAP-88/2024] Versus Narendra Kumar Prajapat reported in 2023 Latest Case Law 709 Del.

3. Learned counsel for the applicant submits that, under the changed circumstances and in the light of the judgments passed by the Hon’ble Apex Court, in the above noted cases, the instant application under Section 11(6) of the Act of 1996 has been submitted, therefore an Arbitrator be appointed to settle the dispute pending between the parties.

4. Per contra, learned counsel for the non-applicant opposed the arguments raised by the counsel for the applicant and submitted that once the execution application submitted by the applicant has been rejected, the applicant cannot be allowed to file successive application for appointment of an Arbitrator. Learned counsel submits that the applicant is bound by the order dated

21.08.2023 passed by the Executing Court, i.e., Commercial Court No.1, Jaipur Metropolitan II. Learned counsel for the respondents submits that the total deposited amount was Rs.20 Lakhs out of which Rs.18 Lakhs have been repaid by him but the applicant has not acknowledged this fact in his application.

5. In support of his contentions, he has placed reliance upon the following judgments passed by the Hon’ble Apex Court:- (1) M/s HPCL Bio-Fuels Ltd. Versus M/s Shahaji Bhanudas Bhad reported in (2024) 12 SCR 133 (2) M/s Faime Makers Pvt. Ltd. Versus District Deputy Registrar, Co-operative Societies (3) Mumbai & others while deciding SLP (Civil) No.26654/2023.

6. Heard and considered the submissions made at Bar and perused the material available on the record. (4 of 6) [ARBAP-88/2024]

7. Perusal of the record indicates that in terms of the agreement dated 25.02.2017, executed between the parties, and in terms of the Clause 12 of the said agreement when the dispute arose between the parties on account of non-payment of borrowed amount, the same was referred to the sole Arbitrator whereby an award was passed and when the application was submitted for execution of the said award, the Executing Court, i.e., Commercial Court No.1, Jaipur Metropolitan II vide order dated 21.08.2023 held that such an award is not executable, in the light of the judgments narrated in Para 25 of the said order.

8. It is note worthy to mention that such unilateral appointment of Arbitrator by the applicant has been disapproved by the Hon’ble Apex Court in the case of TRF Ltd. (supra), which has been followed and reiterated by the Hon’ble Apex Court in the case of Perkins Eastment Architects DPC & Another Versus HSCC (India) Ltd. reported in AIR 2020 SC 59 wherein it has been expounded that the interested party to the lis is not authorised to appoint the Arbitrator and the unilateral appointment of the Arbitrator who is an employee of either of the party has been recognised as an independent or neutral arbitrator. Hence, in the present case, an independent, impartial and neutral Arbitrator is required to be appointed by this Court.

9. The judgments relied upon by the counsel for the applicant are not applicable to the facts and circumstances of the present case.

10. Thus, this Court deems it just and proper to appoint Shri Mahaveer Prasad Sharma (Retd. District Judge) resident of C-10, Near Ojha Ji Ka Bag, Gandhi Nagar, Tonk Road, Jaipur-302015 as (5 of 6) [ARBAP-88/2024] Sole Arbitrator to adjudicate/resolve the dispute between the parties.

11. 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.

12. 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.

13. 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.

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

15. 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 31.05.2025 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-88/2024] 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.

16. Accordingly, the present arbitration application stands disposed of. Karan/194 (ANOOP KUMAR DHAND),J