FAO(OS) (COMM) 50/2016 Page 1 of 9

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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FAO(OS) (COMM) 50/2016, CM Nos.25219-25220/2016

METAL CLOSURES PVT LTD & ORS

..... Appellants

Through:

Mr. Dayan Krishnan, Sr. Adv. with

Mrs. Pritha Srikumar Iyer, Mr.

Sulabh Rewari, Advs.

versus

RELIGARE FINVEST LIMITED & ANR ..... Respondents

Through:

Mr. Sanjay Poddar, Sr. Adv. with

Mr. Ajay Uppal, Adv.

CORAM:

HON'BLE MS. JUSTICE INDIRA BANERJEE

HON'BLE MR. JUSTICE V. KAMESWAR RAO

JUDGMENT

INDIRA BANERJEE, J. (ORAL)

1.

This appeal is against judgment and order dated 17.05.2016, passed

by the learned Single Judge, dismissing the application being OMP

(Comm.) No.112/2016 filed by the appellants under Section 34 of the

Arbitration and Conciliation Act, 1996 (hereinafter referred to ‘1996

Act’) for setting aside an arbitral award dated 17^th September, 2014

passed by the sole Arbitrator Mr.Lalit Kumar, in Arbitration Case

No.RFL/Mortgage/LRN/L-4/748 between the appellants and the

respondent.

2. Religare Finvest Limited (hereinafter referred to as ‘RFL’), a non

banking financial company, executed a loan facility agreement with the

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FAO(OS) (COMM) 50/2016 Page 2 of 9

appellants on 29^th November, 2011, pursuant to which RFL disbursed a

loan of Rs.2,10,00,000/- to the appellant No.1 Metal Closures Pvt. Ltd.,

hereinafter referred to as the appellant company on the terms and

conditions contained in the said loan facility agreement.

3. As security for the money lent and advanced by RFL to the

appellant company, the appellants mortgaged their property being

No.39/4, Khatha No.14826 (SI No.353), Doddakallasandra Village,

Uttarahalli Hobli, Bangalore, Karnataka-560062 in favour of RFL by

depositing the original title deeds thereof with RFL.

4. On or about 15^th March, 2014, RFL recalled the loan facility and

demanded a sum of Rs. 1,33,60,183.63p along with interest at 36% per

annum. The loan advanced by RFL to the appellant company was

repayable to RFL in equated monthly instalments. The appellant company

apparently defaulted in payment of instalments in terms of the said loan

facility agreement.

5. Disputes and differences arose between RFL and the appellants by

reason of alleged breaches of the said loan facility agreement allegedly

committed by the appellants. It is not in dispute that the appellant

company defaulted in payment of instalments as agreed under the

aforesaid loan facility agreement.

6. RFL invoked the arbitration clause in the said loan facility

agreement, appointed Mr.Lalit Kumar as sole Arbitrator, and submitted

its Statement of Claim before the learned sole Arbitrator inter alia

claiming a sum ofRs.1,33,60,183.63p from the appellants along with

interest.

7. The claim of RFL was allowed by an ex-parte award made and

published by the learned sole Arbitrator on 17^th September, 2014, which

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was impugned before the learned Single Bench, by the appellants by

filing the aforesaid application under Section 34 of the 1996 Act.

8. The impugned award of the learned Arbitrator was challenged

mainly on three grounds. The first ground of challenge was that the

award impugned was allegedly in violation of the principles of natural

justice. The appellants contended that the award was made ex-parte.

Notice was not served on the appellants.

9. It however, appears that the learned Single Bench took pains to

carefully look into the records of the arbitral proceedings and recorded a

finding that notice had duly been served. The learned Single Bench

found:-

“11. The Arbitral record was added.