THE HON’BLE SRI JUSTICE N.V.SHRAVAN KUMAR Arbitration Application No.277 of 2024

ORDER

This Arbitration Application is filed under Section

11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a Sole Arbitrator for the purpose of adjudication of the dispute between the applicant Company and the respondent in accordance to Article 5.2 of the Demand Loan Agreement dated 12.02.2018.

2. The facts of the case in brief are that respondent approached the applicant/Company in the year 2018 and applied for a loan amount of Rs.2 Crores for personal necessities and accordingly, a ‘Demand Loan Agreement’ dated 12.02.2018 was executed between the respondent and Applicant. Subsequently, a loan of Rs.1 Crore was sanctioned to on 13.02.2018 and another Rs.1 Crore was sanctioned on 16.02.2018 to the respondent. Thereafter, respondent failed to repay the loan despite repeated requests, mails and phone calls from the Applicant Company. It is submitted that as on 01.01.2020, respondent had acknowledged that an amount of Rs.2,19,86,147/- was due towards the Applicant Company.

3. It is further submitted that as per Article 5.2 of loan agreement dated 12.02.2018, there exists an arbitration clause which reads as follows:

“5.2 Arbitration:

(a) Thereafter the said dispute shall be resolved or addressed by either party within 30 days from the date of notice.

(b) If the Lender and Borrowers are not able to resolve any dispute that may arise among them, the parties agree to resolve the same by way of Arbitration by referring the same to a sole named Arbitrator.

(c) The said sole arbitrator shall resolve the said dispute so referred to him in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The said arbitrator shall pass an award after giving opportunity to the parties and the said award shall be final and binding on the respective parties.

(d) The parties shall mandatorily exhaust this alternative efficacious in house mechanism of Arbitration as covenanted in this Agreement. Without exhausting this remedy, none of the parties are entitled to approach any court of law.”

4. The Applicant Company issued legal notice on

07.06.2024 invoking the abovementioned arbitration clause by nominating their arbitrator. The respondent replied to the said notice on 15.06.2024 denying the allegations made against the respondent and would submit that dispute is already pending before the Magistrate, Hyderabad in C.C.N.I.No.3893 of 2022 and 4015 of 2022 and in that regard refused for appointment of sole arbitrator for adjudication of disputes between the parties. Learned counsel for the applicant submits the disputes before the Magistrate, Hyderabad pertains to cheque bounce case.

5. Today, when the matter is taken up for hearing, none appeared on behalf of the respondent, though notice was served. The disputes aroused between the parties are governed by clause 5.2 of Demand Loan Agreement dated 12.02.2018 and the parties shall settle the same under the Arbitration and Conciliation Act, 1996 as per the agreement dated 12.02.2018.

6. Therefore, Hon’ble Mr.Justice MSK Jaiswal, (Retd.), H.No.3-4-340/1, Flat No.201, Saraswathi Residency, Barkatpura, Hyderabad – 500 027, (Mob: 94931-93422; 92472-02646) is appointed as sole arbitrator to adjudicate the dispute between the parties.

7. The parties shall appear along with a copy of this order before the Arbitrator.

8. Accordingly, the Arbitration Application is disposed of. No costs.

9. Office to communicate a copy of this order to the learned Arbitrator.

Miscellaneous petitions, pending, if any, shall stand closed.

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N.V.SHRAVAN KUMAR, J

28.08.2025 MRM