* IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on : 13.01.2026 Pronounced on : 09.04.2026 Uploaded on : 10.04.2026 + FAO 568/2016 & CM APPL. 45479/2016 FARZANA KHAN .....Appellant Through: Mr. Mukesh Kumar, Advocate.

versus SHRI RAM TRANSPORT FINANCE CO LTD AND ANR .....Respondent Through: Nemo CORAM:

HON'BLE MR. JUSTICE MANOJ KUMAR OHRI

JUDGMENT

1. The present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter the “Act”) has been preferred against the order dated 13.10.2016 passed by the learned ADJ-01, Central District, Tis Hazari Courts, in ARB-84179/16.

2. Vide the impugned order, the objections filed by the appellant under Section 34 of the Act, assailing the arbitral award dated 15.07.2014 (hereinafter the “impugned award”) passed by the learned sole arbitrator, i.e., respondent no. 2 herein, were dismissed.

The impugned award has directed the appellant to pay, inter alia, Rs.5,71,000/- plus interest @ 18% per annum on the said sum from 19.11.2013 till payment to respondent no. 1.

3. None appears for the respondents. A perusal of the proceedings shows that respondent no. 1 could not be served despite various efforts and consequently, the appellant’s application seeking substituted service came to be allowed on 24.08.2018. The order dated 15.01.2019 records that proof of service was duly filed. In view of the continued non-appearance despite service, respondent no. 1 was proceeded ex-parte on 28.03.2023.

4. Briefly, the facts of the case as culled out from the record are that the appellant and her husband had obtained a loan of Rs.2,90,000/- from respondent no. 1 on 01.07.2011 for purchase of a vehicle, repayable in 28 monthly instalments, with the total payable amount including interest being Rs.3,97,995/-. After paying a few instalments, the appellant defaulted. Consequently, respondent no. 1 invoked arbitration, wherein the impugned award came to be passed. Aggrieved thereby, the appellant preferred a petition under Section 34 of the Act, which was dismissed vide the impugned order.

5. In dismissing the Section 34 petition, the Court dealing with the objections held the appellant’s plea of ignorance to be per se false. The Court found that the appellant’s own admissions regarding the loan, subsequent default, and the specific proposal made during the arbitral proceedings to settle the debt in 10 instalments confirmed her active participation and prior knowledge of the dispute. Concluding that the objections raised by the appellant had no merit, the Court refused to interfere with the impugned award.

6. Learned counsel for the appellant assails the impugned order, contending that the Court failed to appreciate that the impugned award was passed without affording the appellant an opportunity of being heard. It is contended that as the appellant was ready to repay the remaining instalments, no dispute can be said to have arisen. It is also submitted that the impugned award directs payment of an unreasonable amount of interest.

7. The primary issues for consideration are: first, whether the arbitral proceedings suffered from procedural impropriety to the prejudice of the appellant; and second, whether the 18% per annum interest awarded on Rs.5,71,000/- from 19.11.2013 until payment is unreasonable, and if so, whether the impugned order or award is liable to be set aside on that ground.

8. At the outset, it is pertinent to note that the relationship between the parties was governed by the Loan-cum-Hypothecation Agreement dated 01.07.2011 (Ex. CW-1/2), which bears the signatures of the appellant. Clause 15 of the said agreement specifies arbitration as the mode for resolution of disputes. It is the appellant’s own case that she obtained the loan and paid a few instalments pursuant to this agreement, before defaulting on the remaining amount.

9. Insofar as the first issue is concerned, the impugned order records that notices dated 28.11.2013, relating to the submission of the statement of claim and