The court upheld that an arbitration award, when parties have duly participated in proceedings, cannot be set aside unless significant violations of law or natural justice principles occur.

JUDGMENT R.SUBBIAH, J

This Original Side Appeal (O.S.A) has been filed against the order dated 12.01.2016 passed by the learned Single Judge in dismissing O.P.No.24 of 2014 filed by the appellant herein to set aside the award dated 06.10.2010 passed by the second respondent-Arbitrator.

2. Brief facts which are necessary to decide the issue raised in this appeal, are as follows:

(a) The property bearing Door Nos.28/1 and 28/2 originally belonged to the appellant's father, namely Ameen Abousher. The appellant's father gifted a part of the above property bearing Door No.28/1, Hains Road, Bangalore, measuring an extent of 2207 Sq.Ft. consisting of ground and first floors on 26.07.2005, registered as Document No.1906 of 2005 on the file of the SRO, Bangalore, in favour of the appellant.

(b) The appellant and her father have applied for a loan from Cholamandalam DBS Finance Limited, the first respondent herein, for meeting out their personal and family expenses. The first respondent granted a loan of Rs.30 lakhs and the same has to be repaid in 126 equal monthly instalments. The first respondent, at the time of granting the loan, as per their usual practice, obtained the signatures of the appellant and her father in blank white papers, promissory notes and cheques.

(c) In order to secure the amount due under the said loan agreement, the appellant who is the sole and absolute owner of the property, had deposited the title deeds pertaining to her property at Bangalore with the first respondent with an intention to create an equitable mortgage in favour of the first respondent. The factum of the said deposit was also confirmed by a Memorandum of Deposit of Title deeds, dated 18.01.2008, registered as Document No.3867 of 2008 on the file of the Sub-Registrar, Shivajinagar, Bangalore. In the said loan transaction between the appellant and the first respondent, the father of the appellant joined as a co-borrower. The appellant was regularly paying the monthly instalments. Due to some problems with her husband in the family and also due to some financial difficulties, she was not able pay the monthly instalments on due dates every time, but nevertheless, she has been paying the dues every month.

(d) Hence, a dispute has been raised and an Arbitrator was appointed. The sole Arbitrator passed an Award dated 06.10.2010 and the operative portion of the Award reads as follows:

"In the result the Award is passed in favour of the claimant herein as follows:

The First Respondent is hereby directed to jointly and severally pay to claimant the following amounts:

i) The Claim sum of Rs.31,54,660/- (Thirty one lacs fifty four thousand and six hundred and sixty) as on 28.02.2010.

ii) further interest of 18% per annum for Rs.31,54,660.00 from the date of claim petition until the date of actual payment.

iii) The Respondents are directed to pay all the above amounts within one month from the date of this order, failing which, giving liberty to the claimant herein to take possession of the schedule mentioned asset and to sell the same at the best market price, appropriate the sale proceeds to meet the outstanding amounts i.e. Principal, interest and costs awarded by the tribunal and also the sale expenses incurred by this claimant and return the excess of the sale proceeds, if any to the respondents.

iv) in the event of sale proceeds falling short of the claim/award amount or in the event of claimant being unable to sell the asset owing to unforeseen circumstances, I hereby permit the claimant to proceed executing the award for recovery of the balance amount from the res