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* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 19^th March 2024 + ARB.P. 771/2023 ADITYA BIRLA FINANCE LTD. ..... Petitioner Through: Mr. Aman Vasisth and Mr. Mahdip Datta Parashar, Advocates.

versus ANJALI NAG AND ORS ..... Respondents Through: None.

HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

J U D G M E N T

ANUP JAIRAM BHAMBHANI J.

By way of the present petition under section 11 of the Arbitration & Conciliation Act 1996 (‘A&C Act’), the petitioner seeks appointment of a Sole Arbitrator to adjudicate upon the disputes that are stated to have arisen between the parties

2. Notice on this petition was issued on 07.08.2023.

3. As recorded in last order dated 31.01.2024, since no reply has been filed by respondents Nos.1 to 3 and they have chosen not to be represented, the said respondents have been set ex-parte.

4. As recited in para 4 of the petition, no relief has been sought by the petitioner against respondents Nos.4 and 5, who are pro-forma parties.

5. In response to the query made by the court vide last order dated

31.01.2024 as to the maintainability of the present petition, since the Signature Not Verified petitioner had already invoked its remedy under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’), the court has heard Mr. Aman Vasisth, learned counsel appearing for the petitioner, at length.

6. Mr. Vasisth argues, that what the petitioner is invoking by way of the present petition filed under section 11 of the A&C Act is the arbitration agreement comprised in clause 25 of 03 separate Deeds of Personal Guarantee, all dated 27.01.2022, executed by respondents Nos.1 to 3 in favour of the petitioner. Mr. Vasisth submits, that though a financial facility was availed by respondents Nos.4 and 5 from the petitioner, proceedings under section 9 of the A&C Act are pending before the Bombay High Court against respondent No.4 (which is the sole proprietorship concern of respondent No.2); and respondent No.5 is undergoing Corporate Insolvency Resolution Process before the National Company Law Tribunal, Kolkata.

7. Counsel submits, that the petitioner is seeking reference to arbitration of the petitioner’s claims against respondents Nos.1 to 3, who (latter) had furnished personal guarantees to the petitioner against the financial facility extended by the petitioner to respondents Nos.4 and

5.

8. Mr. Vasisth has drawn attention to Invocation Notice dated

10.01.2023 (‘Invocation Notice’), which was issued by the petitioner only to respondents Nos.1 to 3, invoking clause 25 of the Deeds of Personal Guarantee furnished by the said respondents.

9. For completeness, it is pointed-out, that an earlier Joint Legal Demand Notice dated 02.12.2022 (‘Joint Demand Notice’) was also Signature Not Verified issued by the petitioner, again, only to respondents Nos.1 to 3 invoking their respective personal guarantees.

10. However, no reply is stated to have been received either to the Joint Demand Notice or to the Invocation Notice from the said respondents.

11. Mr. Vasisth argues, that it is the settled position of law, that parallel proceedings are maintainable under the A&C Act as well as under the SARFAESI Act, since proceedings under the SARFAESI Act are not adjudicatory in nature and are only enforcement proceedings in respect of a debt.

12. In the present case, counsel submits, the debt owed by respondents Nos.1 to 3 to the petitioner would first be required to be adjudicated, and under clause 25 of the Deeds of Personal Guarantee, parties have agreed to have such adjudication referred to arbitration.

13. At this point, it is necessary to extract the provision of the arbitration agreement between the parties, which is comprised in the aforementioned clause 25 of the Deeds of Personal Guarantee, which reads as under :

“25. All claims or disputes arising out of or in relation to this Guarantee shall be settled by Arbitration. The Arbitration tribunal shall consist of a sole arb