The main legal point established in the judgment is the retrospective application of the amended provisions of the Arbitration and Conciliation Act, 1996, and the emphasis on the neutrality and impartiality of the arbitrator.

JUDGMENT :

1. The three Applications are filed by the Applicant, Integro Finserv Private Limited, an NBFC, who vide Deed of Assignment dated 16/02/2022, was assigned the entire outstanding loans/debt against the Respondents, together with future interest on the receivables, including the underlying security interest, created thereof and all the rights with respect to the Loan Hypothecation Agreement by CFM Asset Reconstruction Private Limited, an assignee from L & T Finance Limited (for short, “L & T Finance”), vide Deed of Assignment dated 26/06/2019.

Respondent No.1 availed the loans from L & T Finance under Loan-cum-Hypothecation Agreement dated 12/03/2012, which contained an arbitration clause and as such on 14/10/2013, L & T Finance invoked arbitration and appointed an Arbitrator unilaterally.

2. On 26/09/2022, Integro applied for its substitution in place of L & T Finance in the arbitral proceedings.

3. In the present Application, purportedly filed under Section 14 read with Section 11 read with Section 15 of the Arbitration and Conciliation Act, 1996 (for short, “the Act”) Integro, seeks appointment of a sole Arbitrator/substituted Arbitrator to adjudicate the disputes, differences and claims between the parties. The Application so filed, has impleaded the borrower - M/s. Vinit Singh Construction Private Limited and the Guarantor - Mr.Vinit Singh s/o Sunidh Singh as the Respondents.

The Application is premised on the background fact, that pursuant to the Loan-cum-Hypothecation Agreement dated 12/03/2012, the Respondents hypothecated the assets in favour of L & T Finance and created sole and exclusive charge over the said assets, as security for the due repayment of the Loan and other amounts due and payable under the Hypothecation Deed. Respondent No.1 created first and exclusive right on the assets and agreed to secure the loan amount with additional/collateral security on other encumbered assets, as and when demanded under the Agreement. Similarly, Respondent No.2 executed personal Guarantee in terms of the Deed of Guarantee dated 12/03/2012, in his personal and individual capacity.

4. After availing the loan facility, Respondent No.1 committed breach of the Loan Agreement, since it defaulted in timely repayment of instalments and L & T Finance took over possession of the hypothecated assets and appropriated the sale proceeds towards the outstanding dues, leaving deficit of Rs.43,49,469/-, due and payable under the Loan-cum- Hypothecation Agreement alongwith interest at the rate of 36% from foreclosure till the date of payment.

L & T Finance terminated the Loan Agreement by recalling the balance loan and the accrued charges and enforced the security created under the Agreement, with a liberty to sale the assets and called upon the Respondents to make the payment of the outstanding amount, but the Respondents neglected to make the payment.

5. As per the arbitration clause contained in the Loan-cum-Hypothecation Agreement and the Deed of Guarantee, the parties referred all the disputes, differences, claims etc. to arbitration of a sole Arbitrator, appointed by L & T Finance i.e. Advocate Bharat Jain.

6. Integro filed an interim application for substituting its name in place of L & T Finance and issued a letter of termination to the Arbitrator on 04/05/2023 on the ground that the proceedings have not substantially progressed and were at the stage of pleadings and, since, he was appointed unilaterally, which is against the amended provisions of the Act of 1996 and in the wake of the decision of the Apex Court in the case of Perkins Eastman Architects DPC & Ors. Vs. HSCC (India) Ltd. AIR 2020 SC 59.

It is in these circumstances, the present Application is filed.

7. I heard the learned counsel Mr.Rohan Kelkar for the Applicant, who is opposed by learned counsel Mr.Banerjee representing Respondent No.2 who has preliminary raised an objection on the maintainability of the Application.

The objection raised is that neither Integro, the App