JUDGMENT :

The claimant is the appellant before this Court and the challenge is to the order setting aside the Arbitral Award passed by the Principal District Judge, Puducherry in Arbitration O.P.No.13 of 2016 dated 25.02.2020.

2. The brief facts preceeding the filing of this appeal are as follows:

The claimant had extended a personal loan of Rs.10,00,000/- to the 1st respondent. The loan agreement was entered into on 26.10.2013 between the claimant and the first respondent and his wife, the second respondent who had executed the same as a guarantor. As per the terms of the deed the sum extended as loan together with interest was repayable in 36 equated monthly installments (EMI) of Rs.41,550/- each and the 1st of the EMIs fell due on 10.12.2013.

3. In addition to the loan agreement, the respondents had also executed a promissory note and issued post dated cheques. After making some payment the respondents completely stopped paying the EMIs. The claimant would submit that the respondents did not come forward to clear their dues. In fact by letter dated 10.04.2015 issued to the respondents, the claimant had invoked the Arbitration Clause and had informed them about the appointment of the arbitrator and that as on 08.04.2015 a sum of Rs.11,84,177.90/- was due.

4. The arbitrator by letter dated 13.06.2015 had informed the respondents that he had been appointed as the sole arbitrator and that he intended to hold the first hearing on 25.07.2015. This notice was received by the respondents on 08.07.2015. The claimant meanwhile had submitted their claim statement. However, the respondents did not choose to appear before the Arbitral Tribunal.

5. Although the respondents had been served on 08.07.2015 they did not appear either in person or through pleader and the matter was adjourned to three dates, namely, 18.08.2015, 22.08.2015 and 09.09.2015 for their appearance. On 09.09.2015, since the respondents did not appear they were set ex parte and the arbitrator had proceeded to hear the claimant and passed an ex parte award directing the respondents to pay a sum of Rs.13,33,116/- together with interest at the rate of 36 % per annum from the date of filing of the claim statement till the payment. The award was also forwarded to the respondents who received the same on 19.11.2015.

6. After the receipt of the award, the respondents had filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, hereinafter after referred to as the Act, to set aside the award on the file of the Principal District Judge, Puducherry. The said petition was numbered as Arbitration O.P.No.13 of 2016.

7. The main grounds on which the petition had been filed was that the notice under Section 21 dated 10.04.2015 was not served on the 2nd respondent/guarantor. Even the notice that has been served on the 1st respondent is suspect since the same is said to have been served on him on 01.05.2015. The 1st of May being a holiday on account of the labour's day, it is not known as to how the claimant can submit that the notice has been served on the first respondent. The respondents would further submit that there is a suppression of fact on the part of the claimant. The claimant had not brought to the notice of the arbitrator the fact that there was a mortgage deed in favour of the claimant. The claimant had further not given credit to the sum of Rs.4,41,000/- which had been paid by the respondents. The respondents had admitted the borrowal.

8. The respondents would also state that the interest calculated was usurious. They would further state that the arbitrator had not given a fair chance to the respondents to submit their evidence. That apart, the oral testimony of the claimant was totally contradictory to the documents that had been submitted.

9. The Principal District Judge, Puducherry, after hearing the parties set aside the arbitral award. The main reasons that had prompted the learned Judge, to arrive at this conclusion was on account of the following:

(a)