The central legal point established is the court's authority to appoint an independent sole arbitrator for adjudication of disputes under the Arbitration and Conciliation Act, 1996.

ORDER

Chandra Dhari Singh, J. (Oral)

1. The present petition has been filed by the petitioner under section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of arbitrator for adjudication of disputes between the parties arising qua the Loan Agreements dated 30th January, 2016 and 26th February, 2016.

2. Learned counsel appearing on behalf of the petitioner submitted that the petitioner is a non-banking financial company duly incorporated under the Companies Act, 1956 and the respondent No. l is a proprietorship firm of which respondent No.2 is the proprietor and the respondents No.3 (through her legal heir), 4 and 5 are the co-borrowers of the loan provided to the respondent No. l.

3. It has been submitted on behalf of the petitioner that the petitioner was jointly approached by all the respondents to advance a loan of Rs. 4,89,00,000/- which facility was sanctioned by the petitioner company in favour of the respondents vide sanction letter bearing reference no. HFCL/LAP/01-24/2016 dated 31st January, 2016. It is further submitted that the respondents received the aforementioned facility for a total of 180 months at a variable rate of 12.50% annually. The petitioner further asserts that the sanction letter also stated that the respondents would be responsible for paying a punitive interest rate of 2% per month on the past-due sum if they failed to make timely payments of the EMI and the extra fees.

4. It has been further submitted that the petitioner terminated the loan agreements in accordance with Clause 10A(iii) of the loan agreement and recalled the entire outstanding loan amount of Rs.4,53,21,661.64 only payable on 27th October, 2021 through the loan recall notice dated 2nd November, 2021 due to the respondent's appalling failure to abide by the terms and conditions of the loan agreements.

5. It has been submitted on behalf of the petitioner that despite receiving the aforementioned recall notice, the respondent disregarded its terms. Resultantly, the petitioner invoked Section 13(2) of the SARFAESI Act, 2002, and issued a statutory demand notice on 18th February, 2022, requesting payment of the outstanding debt in the absence of which the petitioner would exercise all of its rights under the SARFAESI Act, 2002.

6. Learned counsel appearing on behalf of the petitioner submitted that being aggrieved by the illicit acts of the respondent, the petitioner was constrained to invoke the arbitration clause, i.e., clause 14.4, vide legal notice dated 6th December, 2022. It is submitted that the said notice has not been replied by the respondent.

7. In view of the foregoing submissions, the petitioner is requesting the appointment of an independent sole arbitrator for redressal of disputes between the parties.

8. Learned counsel appearing on behalf of the respondents no. 1 to 5 submitted that the reply has been filed vide Diary No. 558988/2023 but the same is not on record. During the course of arguments, she submitted the reply before this Court which has been taken on record.

9. Learned counsel appearing on behalf of the respondent vehemently opposed the averments made in the instant petition and submitted that the alleged loan agreement placed on record the by the petitioner is forged and fabricated as respondent no. 5 has never signed or executed the same. It is further submitted that signatures of respondent no. 5 is forged by the petitioner.

10. It is submitted on behalf of the respondents that the petitioner sanctioned the facilities in the form of loan for a sum of Rs. 4,89,00,000/- (Rupees Four Crores Eighty Nine Lacs Only) vide sanction letter dated 31st January, 2016. It is further submitted that the respondents were deceitfully induced in order to apply for the credit facilities offered by the petitioner through its misleading representation and warranties of the officials.

11. It is submitted on behalf of the respondents that they were induced to append their signatures on unfilled and