Calcutta High Court
Basant Oil Carriers vs Kotak Mahindra Bank Limited on 23 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-7
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/446/2025
BASANT OIL CARRIERS
VS
KOTAK MAHINDRA BANK LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 23rdJune 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 May 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. NL01AG-0815 was
forcefully repossessed by the respondent on July 3, 2024 at Ranchi.
3. An application under Section 9 of the Arbitration and Conciliation Act,
1996 was filed before this Court. This Court directed the bank to release
the vehicle upon payment of a sum of Rs.81,000/-by the petitioner, being
the overdue amount.
4. The petitioner alleges that the vehicle was released February 22, 2025 by
the bank, but in a damaged condition. The petitioner raised a dispute with
regard to such action of the respondent. Accordingly, the arbitration
clause was invoked in respect of the Agreement No. CV4656803. The
petitioner’s case is that the period during which the vehicle was in the
possession of the bank, severe damage was sustained. It is further
contended that during the entire period, monthly 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.24,23,914/- along with interest @12% p.a.
from the respondent. Accordingly, the arbitration clause was invoked by a
notice dated March 13, 2024. The petitioner called upon the respondent
to pay the aforementioned amount, in failure of which, the respondent was
called upon to refer the dispute to arbitration.
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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The remedy of the petitioner would be under the Recovery of Debts Due to
Bank and Financial Institution Act, 1993.
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.CV4656803 has been
mentioned. The said agreement contains an arbitration clause. Under
such circumstances, this Court cannot hold that invocation is bad in law.
Secondly, this Court also finds that the arbitration clause does not require
the petitioner to nominate an arbitrator. The clause specifically states that
dispute shall be referred by the bank, to a sole arbitrator. 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, under the said statute, the bank can file
a suit for recovery of the money due. The petitioner’s claim for
compensation, damages etc. cannot be adjudicated by the forum created
by the said statute. 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, admissibility 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
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questions are left open to be raised before and decided by the learned
arbitrator.
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