Disputes between borrowers and credit institutions regarding the non-updation of credit information are not covered under the arbitration provisions of Section 18 of the Credit Information Companies (Regulation) Act, 2005, as they are specifically addressed under Section 21(3) of the Act.

This writ petition has been filed for direction to the first respondent to appoint an arbitrator as envisaged under Section 18(2)a of the Credit Information Companies (Regulation) Act, 2005.

2. The petitioner is the proprietor of Rajalingam Group of Transports. He has been associated with several group of companies including the second respondent. In order to obtain loans, a credit score is required in terms of Section 2(g) of the Credit Information Companies (Regulation) Act, 2005 (hereinafter called as 'the Act'). The first respondent is empowered to permit credit information companies to register under itself. Such credit information companies issued credit scores, which determines the credit worthiness of borrowers, based on which the lenders lend loans. The petitioner's lenders credit information company is Trans Union CIBIL whose credit score is called as CIBIL score.

2.1 The petitioner used to avail loans from the second respondent against immovable properties. Due to various reasons, the petitioner ran into severe financial crisis. Therefore, the petitioner invested on vehicles, manpower, new geographies and technology to endorse his commercial operations for which he approached nationalised banks for meeting his requirements. However, the nationalised banks refused to extend any working capital facility to the petitioner. Later the petitioner found the cibil records on the reason for refusal of loan.

According to the petitioner, it is because of the second respondent failed to update requirements as directed in terms of law and provisions of the Credit Information Companies (Regulation) Act, 2005. Even after full settlement of financial loans, the second respondent has failed to update the zero balance accounts with cibil. Therefore, the petitioner was made to suffer financially and economically and subjected to mental trauma and loss. Hence, the petitioner had sent so many e-mails to the second respondent seeking updation of the petitioner's cibil records. The petitioner also approached the Trans Union CIBIL for obtaining the credit score report. However, the said report is also false and he was shown as wilful defaulter.

2.2 As per the guidelines of the first respondent, the second respondent failed to record the closure of the previous loans availed by the petitioner and update the credit score of the petitioner. The failure of non updating the credit scores and the delay in updating the credit scores of the petitioner created great loss and hardship to the petitioner. The second respondent is solely liable and responsible for all loss and hardship caused to the petitioner. Therefore, the petitioner lodged complaint dated 26.11.2019 to the Ombudsman, Non Banking Financial Companies(hereinafter called as 'NBFC') of the second respondent.

Therefore, the petitioner requested the first respondent to invoke provision under Section 18(1) of the Credit Information Companies (Regulation) Act, 2005 for the disputes and differences which arisen between the petitioner and the second respondent to refer the same to the arbitration and request for an arbitrator to be appointed by the first respondent in terms of (2) of the Act. However, there is no reply. Hence the writ petition.

3. On perusal of the counter filed by the first respondent and also the submissions made by the learned counsel appearing for the first respondent revealed that on receipt of the complaint from the petitioner, NBFC Ombudsman issued notice to the second respondent. On receipt of the said notice, the second respondent had replied and the petitioner's cibil score was rectified. As such, the grievance of the petitioner was resolved with the intervention of NBFC Ombudsman and the complaint was closed. In fact, the said report was duly communicated to the petitioner on 06.04.2020. However without satisfying with the report of the NBFC Ombudsman, the petitioner has approached this Court for direction to appoint an arbitrator under Section 18(2)(a) of the Act.

I