O R D E R

Challenge has been made against the arbitral award passed by the sole arbitrator. Dated 19.06.2020.

2. A loan agreement has been entered between the second respondent and the first respondent and the first respondent on 27.06.2017 and the petitioner and the third respondent stood as guarantors in the above agreement. As dispute arose between the parties in respect of the loan agreement, the dispute was referred to the sole arbitrator. The sole arbitrator passed an exparte award on the ground that despite service of notice for appearance on 20.03.2020, none appeared for the petitioner and hence, the award came to be passed.

3. It is the contention of the learned counsel for the petitioner that immediately after receipt of notice, the petitioner had sent a communication along with the defence statement and the same has been acknowledged. Despite the same, the arbitrator passed the award on the ground that none present in person or through their advocate. Further on the date of hearing, it has been recorded as if the respondent purposely did not appear for the hearing on 20.03.2020. It is his further contention that in the year 2019, a similar notice for arbitration was sent by the learned arbitrator and the fate of same is not known. In the year 2020, similar notice has been sent. Hence, submitted that the arbitral award suffers incapacity of the party and also notice of the proceedings has not been sent.

4. The learned counsel for the respondent submitted that the first application filed in the year2019 has been withdrawn. However, the second application has been filed and notice has also been sent. Having receiving the said notice, petitioner has not appeared before the arbitrator.

5. It is not in dispute that the award is an exparte award and the petitioner is a guarantor. The documents available on record reveals that in the year 2019, a similar notice was issued by the same arbitrator in Arbitration Case No.74 of 2019 for the same loan amount. This Court is unable to understand how, when a claim petition is numbered and arbitration notice has been sent along with the documents, but the fate of the above Original Petition is not made known to the petitioner.

6. When the matter stood thus, notice in the present case was sent to the petitioner for the hearing date on 20.03.2020. The petitioner appears to have received the above notice and in fact, he had sent defence statement and expressed his inability to appear personally on 20.03.2020. The learned arbitrator having received the above defence statement, has returned the above on the ground the petitioner has to appear in person or through his advocate. Thereafter, the learned arbitrator has not issued any notice intimating further date of hearing and proceeded to pass an award on the ground that despite notice served on the respondent he has not appeared for the hearing on 20.03.2021 and passed the above award. Such a finding recorded recorded by the learned arbitrator is contrary to the facts. Infact, defence statement sent by the petitioner has been returned by the arbitrator. Despite the above fact, the arbitrator has proceeded as if the respondent has not appeared despite service of notice. The above facts clearly indicate that the arbitrator has not applied his mind and simply proceeded, without any notice. Further, no notice has been issued indicating further date of hearing. When the petitioner has already submitted his defence, the learned arbitrator ought to have considered the same while passing the award. Therefore, the award is certainly void not only on the ground of non service of notice but also incapacity of the parties. No opportunity has been given and hence, the award is liable to be set aside.

7. Accordingly, the award passed by the arbitrator dated 19.06.2020 is set aside. If the parties are unable to arrive at a consensus, it is well open for the respondent to seek appointment of an arbitrator under section 11 of the Arbitration and Conciliation A