Periyasamy v. Hinduja Leyland Finance Limited, Rep. by its authorized Representative, Chennai
2022-08-08
M.SUNDAR
body2022
DigiLaw.ai
JUDGMENT (Prayer: Arbitration Original Petition filed under Section 34(2)(9)(ii) of the Arbitration and Conciliation Act, 1996 praying to (a) Set aside the Arbitral Award dated 22.04.2022 bearing NO.ACP No.HLF/SP/02 of 2021 passed by Mr.P.Suresh, Advocate / Arbitrator; (b) Direct the respondent to pay the costs;) 1. This order will now dispose of the captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] and captioned application thereat. 2. This order has to be read in conjunction with and in continuation of earlier proceedings made in the first listing of the captioned Arb OP on 29.07.2022 which reads as follows: 'Mr.R.S.Jain Le Sadmar, learned counsel for petitioners submits that the impugned arbitral award being an award dated 22.04.2022 bearing Reference No.ACP.No.HLF/SP/02 of 2021 has been made without notice to the petitioners. 2. Registry to requisition the records of Arbitral Tribunal i.e., records pertaining to impugned award. To be noted, Arbitral Tribunal has been constituted by sole Arbitrator Shri P.Suresh, Advocate at Chennai with address at New No.6-B, Old No.11B, Ist Floor, Chandra Bagh Avenue, Ist Street, Mylapore, Chennai – 600 004. Sole Arbitrator to place the entire records of Arbitral Tribunal qua impugned award in a sealed envelop in the Registry and Registry shall place the same before this Court in the next listing. Registry to send a communication to the sole Arbitrator requisitioning the records in this manner forthwith. List in the Admission Board 'Monday Week' i.e., on 08.08.2022.' 3. Today, Mr.V.Jeyaprakasham, learned counsel representing the counsel on record for two petitioners is before this Court. 4. Adverting to aforementioned earlier proceedings dated 29.07.2022, Mr.V.Jeyaprakasham, learned counsel submits that in the previous listing Mr.R.S.Jain Le Sadmar, counsel on record for petitioners was not before this Court and he only represented the matter. This submission is recorded and aforementioned 29.07.2022 proceedings shall be read accordingly. 5. Be that as it may, pursuant to the aforementioned earlier proceedings, records of 'Arbitral Tribunal' ['AT'] were requisitioned by the Registry and the same are before this Court. 6. Captioned Arb OP has been presented in this Court on 24.05.2022 assailing an 'arbitral award dated 22.04.2022 bearing ACP No.HLF/SP/02 of 2021' [hereinafter 'impugned award' for the sake of convenience and clarity] made by a sole Arbitrator who constituted AT. 7.
6. Captioned Arb OP has been presented in this Court on 24.05.2022 assailing an 'arbitral award dated 22.04.2022 bearing ACP No.HLF/SP/02 of 2021' [hereinafter 'impugned award' for the sake of convenience and clarity] made by a sole Arbitrator who constituted AT. 7. Short facts are that the 'respondent' in captioned Arb OP [hereinafter 'HLFL' denoting 'Hinduja Leyland Finance Limited' for the sake of convenience and clarity] had given finance facilities for purchase of 3516 H vehicle [hereinafter 'said vehicle' for the sake of convenience and clarity] and for this purpose, 'loan agreement No.TNSLNM01943 dated 07.03.2018' [hereinafter 'primary contract' for the sake of convenience and clarity] was entered into between petitioners and respondent; that there is no disputation that this loan agreement contains an arbitration clause; that there was default in repayment, HLFL triggered the arbitration clause; that AT entered upon reference qua primary contract and AT sent notices to petitioners before this Court i.e., borrower and guarantor [hereinafter collectively 'borrowers' for the sake of convenience and clarity]; that AT after giving sufficient opportunities to borrowers to complete pleadings made the impugned award inter alia in favour of HLFL for a sum of Rs.6,80,182/- together with interest at the rate of 18% per annum and costs besides arbitrator's fee of Rs.3,000/- to be shared equally by both sides; that assailing the impugned award, captioned Arb OP has been presented in this Court by borrowers. 8. Though the point that borrowers were not put on notice by AT has not been raised in the Arb OP petition, this Court requisitioned records of AT vide the aforementioned proceedings dated 29.07.2022 by relying on the submissions made at the Bar. As already alluded to supra, records of AT are before this Court. A careful perusal of records of AT brings to light that the same counsel on record for borrowers in captioned Arb OP has gone before AT and sought time to file counter affidavit and a scanned reproduction of proceedings of AT dated 21.12.2021 is as follows: 9. This Court called for Vakalatnama in the captioned Arb OP and a scanned reproduction of Vakalatnama (together with docket) is as follows: 10. Even if we look at the signatures of counsel on record in both the aforementioned documents with naked eye, it is clear that the signature in the Vakalatnama and signature in 21.12.2021 proceedings of AT are same.
This Court called for Vakalatnama in the captioned Arb OP and a scanned reproduction of Vakalatnama (together with docket) is as follows: 10. Even if we look at the signatures of counsel on record in both the aforementioned documents with naked eye, it is clear that the signature in the Vakalatnama and signature in 21.12.2021 proceedings of AT are same. However, Mr.V.Jeyaprakasham, learned counsel submits that he was not before the AT and only counsel on record in the captioned Arb OP appeared before AT. This is hardly an explanation. This is no argument. Even in the hearing today, it was emphatically asserted that borrowers had not been put on notice and an ex parte award has been made. In other words, the impugned award is an ex parte award that has been made without notice to borrowers is learned counsel's say. A careful perusal of impugned award and records of AT reveal that multiple opportunities were given to the borrowers and relevant portions of the impugned award is contained in paragraph No.3 of the impugned award and the same reads as follows: 3. This Tribunal sent Notice to both respondents for the hearing on 21.12.2021 along with the claim statement, documents and interim application. On 21.12.2021 the authorised representative of the claimant appeared and the respondent counsel one Mr.Jain requested time for filing vakalat and counter. Hence the matter was posted 04.01.2022. On 04.01.2022 the authorised representative of the claimant appeared and the respondent counsel had filed Vakalat and requested time for filing counter. Hence the matter was adjourned to 11.01.2022. On 11.01.2022 the authorised representative of the claimant appeared and the respondent counsel requested time for filing counter finally in the interim application. Hence the matter was adjourned to 25.01.2022. On 25.01.2022 the authorised representative of the claimant appeared and the respondent counsel was absent and even after sufficient opportunities the respondents have not filed their counter.' 11. Therefore, it is not necessary to go into other aspects of the address to which the notice was sent to borrowers by AT. 12. Lone point that was canvassed in the Admission Board fails in the light of the narrative thus far. 13.
Therefore, it is not necessary to go into other aspects of the address to which the notice was sent to borrowers by AT. 12. Lone point that was canvassed in the Admission Board fails in the light of the narrative thus far. 13. Though under normal circumstances, this would be a fit case for dismissal with costs, this Court refrains itself from imposing costs in the captioned matter owing to the submission of learned counsel {after seeing the records of AT} that counsel on record did go before AT and seek time but with a caveat that if such an approach of requisitioning the records from AT on untenable grounds occur in days to come costs may have to be imposed. 14. Captioned Arb OP fails to cross a threshold barrier in the Admission Board qua Rule 8 of 'The Madras High Court (Arbitration) Rules, 2020' [hereinafter 'MHC Arbitration Rules' for the sake of convenience and clarity] and clause 8.5 of Practice Directions thereat (made in exercise of powers vested in the High Court under Section 82 of A and C Act) is of relevance and the same read as follows: Rule 8 of MHC Arbitration Rules : 8. Procedure in relation to petitions under Section 34 of the Act: (i) Every petition under Section 34 shall be posted for admission before the Court. On hearing a petition under Section 34 for admission, the Court may- (a) admit and order notice to the respondent, or (b) direct the petitioner to issue notice along with the petition and documents to the respondent before the matter is heard for admission; or (c) dismiss the petition, with or without costs. (ii) Where the court orders notice on admission, the Court shall endeavour to decide the admission within three months from the date of first hearing. (iii) When notice is issued under sub-rule (i), the records of the Arbitral Tribunal: (a) shall be requisitioned where the admission is on one or more grounds under Section 34 (2) (a); and (b) may be requisitioned in other cases. (iv) Notwithstanding the above, the arbitral tribunal shall preserve the records of such arbitral proceedings for a period of two years from the date of the award.
(iv) Notwithstanding the above, the arbitral tribunal shall preserve the records of such arbitral proceedings for a period of two years from the date of the award. (v) The Court may, at any stage of the proceedings before it, at the request of any party or suo motu, call for all or any part of the records of the arbitral tribunal. (vi) Where notice is ordered under sub rule (i), the Respondent shall not file any counter statement or counter affi davit, unless (a) the Court directs otherwise or (b) the petition alleges that the making of the Award was induced or effected by fraud or corruption. The petition shall be decided on the grounds of challenge and the records of the arbitral tribunal in cases where the same is requisitioned under sub rules (iii) and (v).' Clause 8.5 of MHC Arbitration Rules: 8. Challenge to an award under Section 34 of the Act: 8.1 ...................... 8.2 ..................... 8.3 ..................... 8.4 ..................... 8.5 Proceedings under Section 34 of the Act shall be disposed of by a summary procedure.' 15. Aforementioned clause 8.5 of Practice Directions has been made by drawing inspiration from Fiza Developers case law [Fiza Developers and Inter-Trade Private Limited Vs. AMCI (India) Private Limited reported in (2009) 17 SCC 796 ] wherein Hon'ble Supreme Court held that a Section 34 legal drill is a one issue summary procedure. It was also clarified that by saying 'one issue' it does not mean that the lis should turn on one issue but the arbitral award being put to challenge itself is the issue before a Section 34 Court. To be noted, subsequently in Emkay Global case [Emkay Global Financial Services Ltd. v. Girdhar Sondhi reported in (2018) 9 SCC 49 ] Hon'ble Supreme Court held that Fiza Developers ratio is a step in the right direction. 16. In the light of the narrative, discussion and dispositive reasoning thus far, captioned Arb OP is dismissed. Consequently, captioned application is also dismissed. There shall be no order as to costs albeit with the aforementioned caveat.