The central legal point established in the judgment is the validity of the arbitrator's jurisdiction and the requirement to contest the claim and challenge the arbitrator's jurisdiction under Section 16 of the Act of 1996.

1. With consent of the parties, the appeal and the stay application being GA No.136 of 2018 are taken up for hearing and the same are disposed of by this order.

2. This appeal under Section 37 of the Arbitration Conciliation Act, 1996 (in short, “the Act of 1996”) at the instance of the respondent in the arbitration proceeding is directed against the order dated December 21, 2017 passed by the arbitrator appointed by this Court on November 23, 2017. By the impugned order, the arbitrator has directed the present appellant, the respondent in the arbitration proceeding, to furnish security for Rs.25,57,41,367/- being the principal outstanding amount payable by it to the respondent-claimant as on October 31, 2017 within a period of three weeks from that date, failing which, the receiver shall take possession of the assets equivalent to the amount of Rs.25,57,41,367/- out of the 800 second-hand assets acquired by the appellant with the loan amount obtained from the present respondent.

3. Assailing the impugned order passed by the arbitrator, Mr. Sanjay Banerjee, learned Advocate for the appellant contended that by an order dated November 23, 2017 this Court directed the arbitrator to adjudicate the disputes between the parties which were pending before the first arbitrator namely, Sri Saikat Das but the arbitrator is proceeding with the arbitral proceeding relating to a separate agreement between the parties. Therefore, according to the appellant, the arbitral proceeding proceeded by the arbitrator is without jurisdiction and consequently, the impugned order passed by the arbitrator is also void.

4. On the other hand, Mr. Swatarup Banerjee, learned Advocate for the present-respondent claimant in the arbitration proceeding strenuously contended that the said order dated November 23, 2017 passed by this Court in APO No.516 of 2017 in clear terms directed the present arbitrator to adjudicate the disputes which were pending before the second arbitrator namely, Ms. Dolon Dasgupta. According to the respondent, when the dispute pending before the said second arbitrator, Ms. Dolon Dasgupta related to the subsequent agreement entered into between the parties, the present arbitrator was absolutely correct to hold in the impugned order that he is required to adjudicate the disputes which were pending before the said second arbitrator Ms. Dolon Dasgupta. It was submitted by the claimant respondent that from the impugned order it is clear that the present appellant did nothing to contest the claim before the arbitrator and in fact it has no defence to the claim of the claimant for Rs.25,57,41,367/- on account of admitted unpaid instalments. It was further submitted that it is not only that the impugned order passed by the arbitrator does not suffer from any infirmity, even the appellant has neither furnished security for payment of Rs.25,57,41,367/- nor has it filed its affidavit before the arbitrator as directed by the arbitrator. The appellant has belatedly filed this appeal to prevent the receiver to take possession of the hypothecated assets in terms of the impugned order. The learned Advocate for the claimant respondent strongly argued for dismissal of the appeal for being devoid of any merit.

5. I have considered the materials on record and the arguments advanced on behalf of the respective parties. In the instant case, there is no dispute between the parties that in terms of the agreement dated April 1, 2014 (hereinafter referred to as “the said first agreement”), the present appellant obtained financial accommodation for acquiring 800 second-hand assets, which remain hypothecated in favour of the respondent. In view of the failure on the part of the appellant to make payment of the dues of the respondent in terms with the said first agreement, the parties had entered into a restructuring agreement dated June 30, 2014 (hereinafter referred to as “the said second agreement”) whereby the payment mode of the dues of the appellant to the