T.S. Sivagnanam, J.

This petition has been filed by Mr. Naveen G.Rolands, who availed loan from the 1st respondent Finance Bank, challenging the award passed by the Arbitrator dated 16.10.2012.

2. By the impugned award, the learned Arbitrator has held that the petitioner and his wife, the 3rd respondent (respondents in the arbitration case) have committed breach of the loan agreement by committing default in payment of instalments and liable to pay the 1st respondent Bank, a sum of Rs.33,97,383/-, as on 30.06.2012, failing which the respondents are bound to recover the possession of the schedule property to the 1st respondent Finance Bank. The learned Arbitrator awarded interest @ 18% per annum as against the contractual rate of interest at 14.5% (floating) and interest claimed @ 48% in the claim application.

3. The petitioner availed a Home Equity Loan of Rs.40 lakhs vide loan agreement dated 09.07.2008. The immovable property at Bangalore was offered as security for the loan transaction. The petitioner and the 3rd respondent herein created a charge on the said property in favour of the 1st respondent by deposit of title deeds. The 3rd respondent herein executed Deed of Guarantee for due performance of the terms and conditions of the agreement executed by the petitioner herein and undertook to indemnify the 1st respondent Finance Company in case of default committed, in respect of any of the terms and conditions, by the petitioner. It is not in dispute that the petitioner committed default in repayment. This ultimately led to the filing of a claim petition before the 2nd respondent Arbitrator wherein, the 1st respondent Finance Company claimed that they had advanced a sum of Rs. 40 lakhs repayable in 264 monthly instalments and the last payment was made by the petitioner on 12.03.2012, after which, default had occurred and requested award to be passed for a sum of Rs.33,97,383/- as on 30.06.2012 together with interest @ 48% per annum.

4. A communication dated 30.06.2012 was sent to the petitioner by the 1st respondent, which appears to be a response to a request for foreclosure of a loan by the petitioner and he was informed that as per the Loan Agreement, the amount payable by the petitioner, as on the said date, was Rs.33,97,383/- and the said amount was mentioned, assuming that the last instalment had been cleared by the petitioner, taking the date of foreclosure as 30.06.2012. As noted above, this communication dated 30.06.2012 appears to have been made at the request made by the petitioner for foreclosure or early closure of the loan or otherwise, there may not have been a necessity for sending such a communication, when the EMIs were in progress. The statement of accounts, drawn as on 30.06.2012 for the period from 30.06.2008 to 30.06.2012, was placed before the Arbitrator. The 1st respondent by letter dated 06.07.2012 nominated the 2nd respondent as the Arbitrator and a copy of the communication was marked to the petitioner and the 3rd respondent herein. Thereupon, the learned Arbitrator sent a letter by registered post to the petitioner and the 3rd respondent informing that the 1st respondent has filed a claim statement and the matter stands posted for hearing on 02.08.2012 and directed them to appear in person or through their authorised representative. While so, the petitioner paid a sum of Rs.1,16,000/- at Bangalore, being the amount payable towards 3 instalments, which has been acknowledged by receipt dated 24.07.2012. The Arbitrator sent another notice dated 23.08.2012 stating that the private notice was returned with the postal endorsement "intimation delivered" and directed the petitioner and the 3rd respondent to appear on 06.09.2012 at 4.00p.m., to give a final opportunity, failing which the matter will be decided on merits. The said notice was also returned with the endorsement "intimation delivered". On 29.09.2012, the petitioner paid a sum of Rs.77,254/- at Bangalore, being the amount payable towards 2