The main legal point established is that the arbitration clause in a loan facility agreement does not automatically extend to guarantors in the absence of an arbitration clause in the deeds of guarantee.

JUDGMENT :

V. Kameswar Rao, J.

1. By this order, I shall decide the present application, filed by the defendants under Section 8 of the Arbitration and Conciliation Act, 1996 ("Act", for short) with the following prayers:

"(a) that the Hon'ble Court be pleased to refer the parties to the arbitration before the Learned Sole Arbitrator Mr. Justice Mukul Mudgal (Retd.) for adjudication of the matter under dispute, before whom the arbitral proceedings are already pending;

(b) that the Plaintiff may be directed to produce the originals of the documents executed by and/or between the Plaintiff, SIFPL and Applicants/Defendants, which are more particularly enlisted in paragraphs (4) and (7) above, before this Hon'ble Court in terms of Section 8(2) of the Act;

(c) cost for the present application be provided for; and

(d) such other just and equitable reliefs as this Hon'ble Court may deem fit and proper under the facts and circumstances of the present case."

2. The suit has been filed by the plaintiff for recovery of an amount of Rs.9,89,20,085/- as on May 5, 2019 along with pendete lite and future interest.

3. It is the case of the plaintiff/non-applicant in the plaint that M/s. Shrenuj Investments and Finance Pvt. Limited ("Borrower Company", for short), a company registered under the relevant provisions of the Companies Act, 1956, through defendant no.1 being its Director who manages its affairs, approached the plaintiff Company in and around June, 2012 for availing the loan facility of up to Rs.15 Crores for the purpose of investment in its Group Companies against pledged and equity shares of M/s. Shrenuj and Co. Limited. The defendants are also promoters/Directors of M/s. Shrenuj and Co. Limited, which is engaged in the business of trading and manufacturing of diamond and diamond jewellery. The plaintiff Company, upon considering the request of the Borrower Company, vide sanction letter dated October 18, 2012, had sanctioned a loan to the tune of Rs.15 Cr. for a period of 360 days with a rate of interest @ 14 % per annum with monthly rest and subject to the other terms and conditions stipulated. Pursuant thereto and after accepting the terms of the sanction letter, the plaintiff Company and Borrower Company executed and entered into a loan facility agreement dated October 19, 2012 ("Facility Agreement-I", for short). Loan facility availed by Borrower Company from Plaintiff based on Facility Agreement-I shall herein after be referred to as Loan Account-I.

4. The plaintiff Company disbursed an amount of Rs.15 Cr. to the Borrower Company on October 22, 2012. The Borrower Company again approached the plaintiff Company with a request for an additional loan facility of up to Rs.15 Cr. offering additional security, which was accordingly sanctioned for a period of 360 days with a rate of interest @ 14.50% per annum with monthly rest and subject to the other terms and conditions stipulated. The plaintiff Company and the Borrower Company executed and entered into the second loan facility agreement dated January 28, 2013 ("Facility Agreement-II", for short), on the terms and conditions stipulated therein. Loan facility availed by Borrower Company from Plaintiff based on Facility Agreement-II shall herein after be referred to as Loan Account-II. The plaintiff disbursed a sum of Rs.15 Cr. to the Borrower Company on January 28, 2013 in their bank account through RTGS.

5. Defendant no.1 Shreyas Kirti Lal Doshi and Vishal Shreyas Doshi, defendant no. 2 are the Directors/promoters and guarantors of the Borrower Company with respect to loan facilities so availed from the plaintiff company. Defendant No.1 herein executed the Deed of Guarantee dated October 19, 2012 for Loan Account-I and Deed of Guarantee dated January 28, 2013 for Loan Account-II. Defendant no.2 herein, executed two separate Deeds of Guarantee dated March 14, 2013 in favour of the plaintiff to secure the Loan Accounts-I & II. The Borrower Company along with guarantors and pledgors of shares,