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2018 DIGILAW 554 (CAL)

Satyaveer Singh v. Magma Fincorp Limited

2018-08-09

ASHIS KUMAR CHAKRABORTY

body2018
JUDGMENT : ASHIS KUMAR CHAKRABORTY, J. 1. The Court: In this application under Section 34 of the Arbitration & Conciliation Act, 1996 (in short, “the Act of 1996”) the petitioner, the principal borrower under a loan agreement dated October 21, 2016 (hereinafter referred to as ‘the loan agreement’) has challenged the award dated February 27, 2018 made by an arbitrator in Arbitration Case No.ARB/08/07/2017/C. By the impugned award, the arbitrator has directed the respondent to pay Rs. 30,88,397/-, together with interest upon award at the rate of 24 per cent per annum. 2. The principal ground urged by the petitioner in this application is that the arbitrator proceeded with the arbitration proceeding, made and published the impugned award without any notice to itself. By an order dated July 31, 2018 the arbitrator was directed to forward all the records of the arbitral proceeding before this Court. 3. Today, when this application is taken up for hearing, a gentleman holding himself to be the representative of the arbitrator produced an open envelope, which according to him, contained the records of the arbitral proceeding. This conduct of the arbitrator in forwarding the purported records of the arbitral proceeding in an open envelope could not be appreciated by this Court. Accordingly, this Court did not return the envelope forwarded by the arbitrator. 4. However, Mr. Singh, learned counsel appearing for the respondent/award-debtor, the claimant before the arbitrator produced the minutes of the proceeding held by the arbitrator on October 9, 2017, November 14, 2017 and December 15, 2017. From the said minutes it could not be found that the arbitrator had proceeded with the arbitral proceeding with any proof of the notices of hearing being received by the present petitioner. In the minutes of the meeting held on December 15, 2017 the arbitrator recorded that he had peremptorily fixed the arbitral meeting on that date. However, the minutes of the meeting dated November 14, 2017 did not record any such direction by the arbitrator. 5. Considering the minutes of the arbitral proceeding the respondent/claimant could not dispute the ground urged by the petitioner in this application that the arbitrator had proceeded with the arbitral proceeding resulting in passing of the impugned award without proper notice, at least upon the present petitioner. 6. Mr. 5. Considering the minutes of the arbitral proceeding the respondent/claimant could not dispute the ground urged by the petitioner in this application that the arbitrator had proceeded with the arbitral proceeding resulting in passing of the impugned award without proper notice, at least upon the present petitioner. 6. Mr. Singh, learned counsel for the respondent, in his usual fairness submitted that this Court may set aside the impugned award made by the arbitrator and allow the respondent to initiate a fresh arbitral proceeding after appointing a new arbitrator in terms of the said loan agreement between the parties. 7. The above submission made on behalf of the respondent was also accepted by Mr. Banerjee, learned counsel appearing for the petitioner. 8. In the present case, the petitioner has substantiated the ground urged by him that he did not receive proper notice of the arbitral proceeding and consequently, he was unable to present his case before the arbitrator. Accordingly, the award dated February 27, 2018 made by the arbitrator in Arbitration Case No. ARB/08/07/2017/C is set aside. 9. The respondent is directed to initiate a fresh arbitral proceeding by appointing a new arbitrator, upon notice to the present petitioner and its advocate-on-record, as well as upon the remaining parties to the loan agreement. 10. There shall, however, be no order as to costs.