Arbitration disputes can persist even after prior adjudication and under SARFAESI Act, respecting parties' choices for resolution.

JUDGMENT

ARB.P.62/2022

1. A Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 has been filed for appointment of the Arbitrator to adjudicate the disputes between the parties.

2. It is submitted that a loan Agreement dated 10.01.2012 was executed between the petitioners and the respondents. They entered into a supplementary Agreement dated 27.01.2014 bearing Loan Account no. (s) XMORPNG00051190 having a Loan amount of Rs. 9,45,98,691/-. The instalments were to be paid till 15.02.2028 by the petitioner and according to the petitioner, an excess payment was made as it has made a payment of Rs. 11,33,07,673/- against the loan amount till June, 2021 which is in an overflow of Rs. 2,21,47,810/-. It is claimed that there was no default in the account in view of the overflow.

3. It has been explained that petitioner no. 1 and 2 are a Private Limited Company while the petitioner no. 3 is a limited Company. The petitioner no. 4 is the wife of petitioner no. 5 and a co-borrower and petitioner no. 5 is the Director of the Petitioner no. 1, 3 and 6. The petitioner no. 7 is the guarantor.

4. It is asserted that respondent is making demand of balance loan amount which has been calculated incorrectly. Moreover, petitioner no. 7 has been made a party even though he was not a party to the loan transaction. The petitioners, except petitioner no. 7 had availed a Loan against the property/SME loan facility from RFL on 14.01.2012 which was restructured on 27.01.2014.

5. The respondent Bank has illegally and arbitrarily declared the account of the applicants as Non-Performing Asset (hereinafter referred to as "NPA") with effect from 30.06.2021 in total violation of the RBI norms for declaring any account as NPA. It is asserted that despite all the payments having been made, the respondent has shown only Rs. 10,01,59,512/- in their statement and thus, there is an error in the Statement of Account to the tune of Rs. 92,68,162/- as the receipts have not been shown correctly. It is also asserted that the respondent had not disbursed the total amount of Rs. 10 Crore and only Rs. 9.60 Crore was disbursed while Rs. 40,00,000/- was withheld, however, interest was charged on the full amount of Rs. 10 Crore for 21 months.

6. The respondent Bank made a demand of Rs. 5,72,24,893.47/- as outstanding balance amount along with the interest and charge accruing to the Loan Accounts after 02.07.2021 vide its Notice of Demand 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"). The petitioner gave a reply dated 12.09.2021 raising several objections under Section 13(3A) of the SARFAESI Act. It is also asserted that as per the RBI guidelines issued from time to time, the rate of interest has been reduced for the category of loan taken and an excess amount of Rs. 1,63,12,289/- has been charged as interest.

7. The petitioner apprised the Bank that Ms. Surjeet Kaur had filed a suit for partition bearing no. CS(OS) 280 of 2021 against some of the defendants and vide Order dated 07.06.2021, a status quo has been Ordered with respect to title