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BIREN VAISHNAV
Ndian Bank (Erstwhile Allahabad Bank) – Appellant
Versus
Morris Samuel Christian – Respondent
JUDGMENT :
1. The petitioner-Indian Bank initially approached this Court by challenging an ‘interim measure award passed by the respondent no.1-Morris Samuel Christian in Arbitration Case No.23 of 2020. Subsequently, pending the petition, it appears that the respondent no.1- Sole Arbitrator passed the final award dated 24.11.2020. By the aforesaid award, the suit of the respondent no.2 was allowed and the term loan which is the subject matter of the award, was interfered with.
2. Facts in brief indicate as under:
2.1 The petitioner bank pursuant to a request for a credit facility by way of a term loan of Rs.20 lakhs issued a term loan sanction letter dated 02.05.2016 in favour of M/s.Ekta Enterprise – the respondent no.2 for the purposes of procurement of machines and raw-material relating to bakery items. It is the case of the petitioner that the respondent no.2 defaulted in payment of this loan and therefore being declared as a nonperforming asset on 01.10.2019, on 15.10.2019, a notice under Section 13(2) of the Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (‘SARFAESI Act’ for short) for recovery of Rs.19,60,214/- was issued. H
The main legal point established in the judgment is that the borrower's invocation of arbitration was without jurisdiction, and the resulting arbitration proceedings and award were invalid.
The court upheld the validity of arbitration clauses in financial agreements, ruling that disputes arising under such agreements must be resolved via arbitration, even amidst ongoing SARFAESI Act pro....
Arbitration disputes can persist even after prior adjudication and under SARFAESI Act, respecting parties' choices for resolution.
Disputes between lenders and borrowers are non-arbitrable under the SARFAESI Act, which necessitates adherence to statutory remedies, exclusively available through the Debt Recovery Tribunal.
SARFAESI Act was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith. Liquidation of secured interest th....
Appellant is within the purview of the SARFAESI Act even though it was not on the date of entering into the agreement containing the arbitration clause.
Disputes covered by special laws, creating special rights to be adjudicated and enforced by special forums, are non-arbitrable.
The main legal point established in the judgment is that the claims of banks and financial institutions under the RDDB Act are non-arbitrable, and the disputes regarding determination of debt due fel....
Section 11 SARFAESI mandates arbitration for disputes between bank and financial institution over non-payment due including interest in loan takeover, even if one not secured creditor, as triggered b....
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