The main legal point established in the judgment is the non-arbitrability of disputes under the SARFAESI Act, 2002 and RDB Act, 1993, and the lack of provision for review under the Arbitration and Conciliation Act, 1996.

JUDGMENT

Neena Bansal Krishna, J.

Rev. Petition 296/2022

1. A review petition under Order XLVII read with Section 114 and 151 of the CPC has been filed on behalf of the petitioner (who was the respondent in the main petition) seeking review of the Order dated 14.10.2022 allowing the petition under Section 11 Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act, 1996") and an Arbitrator was appointed for adjudication of the disputes.

2. It is submitted that the respondent (who was the petitioner in the main petition) therein had mislead the Court by relying on the Full Bench Judgement of Delhi High Court titled as HDFC Bank Ltd. Vs. Satpal Singh Bakshi reported in 2012 SCC OnLine Del 4815  which has been overruled by the Supreme Court in the case titled as Vidya Drolia and Ors. Vs. Durga Trading Corporation reported in (2021) 2 SCC 1. The law as laid down in HDFC (Supra) is no longer good law. It has been held in Vidya Drolia (supra) that there is a prohibition against the waiver of jurisdiction of Debt Recovery Tribunal (DRT) by necessary implication under Section 34 and 35 of the SARFAESI Act and any claim against the measures taken by the Financial Institutions under the said Act are not arbitrable. In the impugned Order, this objection was taken by the respondent but has been specifically considered and rejected by placing reliance on HDFC (Supra).

3. It is submitted that the cause of action arose on the issuance of the Demand Notice under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act, 2002") dated 12.07.2021, then on 22.09.2021 when the petitioner herein issued the Possession Notice and thereafter on 06.12.2021 when the respondent filed the application under Section 14 of the SARFAESI Act, 2002 before the learned CMM, Saket and obtained orders thereunder. The entire basis for the respondent to approach this Court arose from the measures taken by the respondent under the relevant provisions of the SARFAESI Act, 2002 against which the statue itself provides for efficacious remedy under Section 17 of the SARFAESI Act, 2002. Hence, invocation of arbitration in regard to the matters covered under the SARFAESI Act, 2002 is manifestly illegal and under no circumstances can the same be held to fall within the ambit of the Arbitration and Conciliation Act, 1996.

4. Further, the respondent herein had assailed the Order passed in the original application filed by the Bank under Section 19 of The Recover of Debts and Bankruptcy Act, 1993 (hereinafter referred to as "RDB Act"). Such proceedings as is well laid down, are in the nature of civil proceedings and therefore, any observations made in context thereto ought not to be squarely made applicable to the proceedings under the SARFAESI Act, 2002.

5. It is further asserted that the loan availed by the petitioner was restructured vide Facility Agreement dated 27.01.20214 and the reference of the disputes that arose under the loan Agreement in view of the failure of the petitioner to abide by the restructured payment plan, was referred to arbitration on 08.01.2015. The final award was made on 09.06.2015. No fresh cause of action has accrued between the parties in respect of which Section 11 could have been filed. There are no independent disputes as those which existed, have already been adjudicated in this previous Award. According to the respondent herein, the cause of action for filing the present petition arose on the issuance of Demand Notice dated 12.07.2021 under Section 13 (2) of the SARFAESI Act, 2002. The bare perusal of the Demand Notice would show that it was issued only on account of the default in the re-payment of EMIs on the part of the petitioner in regard to the Loan Facility Agreement dated 27.01.2014.

6. It is further submitted that the Supreme Court in M.D. Frozen Foods Exports Private Limited vs. Hero Fincorp Ltd., (2017) 1