Calcutta High Court
Basant Oil Carriers vs Kotak Mahindra Bank Limited on 23 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-8
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/447/2025
BASANT OIL CARRIERS
VS
KOTAK MAHINDRA BANK LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 23rd June 2025.
Appearance:-
Mr. Amitava Mukherjee, Sr. Advocate
Ms. Arpita Saha, Advocate
Ms. Antara Das, Advocate
... for the petitioner.
Mr. Abishek Guha, Advocate
Mr. A. Majumdar, Advocate
Mr. Adipta Kr. Pandit, advocate
... for the respondents.
1. This is an application for appointment of a learned arbitrator.The
petitioner relies on Clause 11.17 of the Loan cum Guarantee Agreement
dated July 5, 2023, which is as under:-
“11.17 Unless the same falls within the jurisdiction of the Debts Recovery
Tribunal established under the Recovery of Debts Due To Banks
and Financial Institutions Act, 1993, any and all claims and
disputes arising out of or in connection with this Agreement or its
performance shall be settled by arbitration by a single Arbitrator
to be appointed by the Bank. The arbitration shall be held, either
in Delhi, Chennai, Kolkata, Ahmedabad, Indore, Bangaluru or
Hyderabad at the sole and absolute discretion of the Bank.”
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2. The petitioner contends that vehicle bearing No. NL01AG0816 was
forcefully repossessed by the respondent on July 7, 2024 at Jalpaiguri.
3. An application under Section 9 of the Arbitration and Conciliation Act,
1996 was filed before this Court. This Court directed the respondentto
release the vehicle in favour of the petitioner, upon payment of a sum of
Rs.80,000/- by the petitioner,being the overdue amount at that stage.
4. The petitioner alleges that the vehicle was released on February 27, 2025
by the bank, but in a damaged condition. The petitioner raised a dispute.
Accordingly, the arbitration clause was invoked in respect of the
Agreement No. CV4656779. The petitioner’s case is that the period during
which the vehicle had sustained severe damage when the same was in the
custody of the respondent. It is further contended that during the entire
period, instalments were being paid. As the vehicle was lying in an idle
condition, the national permit, the road tax and insurance,also expired.
The petitioner suffered loss. The petitioner claimed a sum of
Rs.22,67,857.83 along with interest @12% p.a., from the respondent.
Accordingly, the arbitration clause was invoked by a notice dated March
13, 2024, calling upon the respondent to pay the aforementioned amount,
in failure of which, the respondent was called upon to refer the dispute to
arbitration. Moreover, the claim should be raised in a processing under
Recovery of Debts due to Banks and Financial Instruments Act, 1993.
5. Mr. Guha, learned advocate for the respondent submits that the
invocation was not proper. The petitioner did not nominate an arbitrator.
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6. It appears that the petitioner is aggrieved by the alleged wrongful
repossession of the vehicle by the bank from the petitioner’s custody. In
the repossession/inventory list, the Agreement No.CV4656779has been
mentioned. This Court is of the view that the cause of action arose when
the bank had repossessed the vehicle upon involving the terms of the
agreement bearing No. CV4656779. The petitioner is aggrieved by the
repossession of the vehicle. The agreement contains an arbitration clause.
The arbitration clause does not require the petitioner to nominate an
arbitrator. The clause specifically states that disputes shall be referred to
the Single arbitrator by the bank. The other contention of Mr. Guha that
the petitioner had a remedy under the Recovery of Debts due to Banks
and Financial Institutions Act, 1993, is also not accepted, inasmuch as,
the said statute enables the bank to file a proceeding for recovery of
money. The petitioner’s claim for compensation, damages etc. cannot be
adjudicated by the forum constituted under the said Act. The petitioner is
bound by the arbitration clause and so is the respondent.
7. Under such circumstances, the contentions of Mr. Guha are not accepted.
However, the issues of arbitrability, of the dispute, admissibility of the
claims etc., are matters to be decided by the learned arbitrator. The
findings hereinabove are to the extent of the referral court satisfying itself
as to the existence of an arbitration agreement and reference of the
dispute to arbitration. All questions are left open to be raised before and
decided by the learned arbitrator.
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8. Under such circumstances, this Court allows the application and refers
the dispute to a sole arbitrator.This Court appoints Mr. Arindam Mandal,
Advocate (Mobile: 8420004468) as the learned arbitrator, to arbitrate
upon the disputes between the parties. This appointment is subject to
compliance of Section 12 of the Arbitration and Conciliation Act, 1996.
The learned arbitrator shall fix his remuneration as per the Schedule of
the Act.
9. This Court has not gone into the merits of the claims of the petitioner.
10. The application is disposed of.
(SHAMPA SARKAR, J.)
dg/S.Kumar