Calcutta High Court
Lakshman Prasad Agarwal vs Neogrowth Credit Private Limited on 25 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 71
ORDER SHEET
APOT/15/2025
IA NO:GA-COM/1/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL APPELLATE DIVISION
LAKSHMAN PRASAD AGARWAL
VS
NEOGROWTH CREDIT PRIVATE LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 25th June, 2025.
Appearance:
Mr. Aniruddha Chatterjee, Sr. Adv.
Mr. Chayan Gupta, Adv.
Mr. Anujit Mookherji, Adv.
Mr. Rittick Chowdhury, Adv.
Mr. Pourush Bandopadhyay, Adv.
Mr. Pritish Chandra, Adv.
...for the Appellant
The Court:
1. Despite several opportunities and service, the respondent has failed to
appear before the Court.
2. APOT/15/2025 is an appeal under Section 37(2) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the said Act). The
appellant is aggrieved by an interim order passed under Section 17 of
the said Act by a learned Arbitrator sitting at Delhi on 18th November,
2024. The order is quoted below:-
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” ORDER
a) It is hereby directed to retrain the respondents from
withdrawing any amount from Bank Account
No.3102135000009601 in KARUR VYSYA BANK having its
IFSC Code KVBL0003102, office Branch at:-KOLKATA
SHAKESPEARE SARANI, NO 20 SHAKESPEARE SERRANI,
PARK STREET, KOLKATA – 700005;
b) In case the Respondents fails to clear the outstanding
amount of the Claimant as above under the Loan Agreement,
it is hereby ordered that the claimants are allowed to take
possession of the movable/immovable properties/assets
specified in Schedule-I of the application by removing same
from the possession and custody of the Respondents.
c) Reliefs in terms of prayer (b) to the effect Mr. Bhaskar
Barik/Titas Manna Authorized person of the claimant
company is appointed as Receiver with the directions to seize
the movable/immovable properties/assets specified in
Schedule-I of the application by removing same from the
possession of the Respondents & prepare the inventory
accordingly;
d) The receiver Mr. Bhaskar Barik/Titas Manna is hereby
authorized to take necessary police aid for taking possession
of the goods mentioned in Schedule 1 and accordingly, the
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SHO/Officer’s in charge in whose jurisdiction the
movable/immovable properties/assets are found, is directed
to provided necessary police aid to the receiver for execution
of this order;
e) Till the possession of the said movable/immovable
properties/assets are handed over or taken by the claimant,
the respondents, their servants and/or agents are hereby
restrained from selling, transferring, and/or creating any
third party rights or interest, or parting with possession of
the said movable/immovable properties/assets in any
manner whatsoever.
f) The Receiver shall file his report alongwith inventory
prepared (if any) within 10 days from the date of execution of
the present order.”
3. The said order has been challenged on the ground of lack of jurisdiction
of the learned Arbitrator and the unilateral appointment. An arbitral
proceeding is already pending before a learned Arbitrator at Mumbai.
The appellant was never informed about the change of venue from
Mumbai to Delhi as also the change of an Arbitrator. Initially, the
respondent had unilaterally appointed one Mr. Rajendra Brijmohan
Agarwal as an Arbitrator. The Delhi High Court terminated the
mandate of Mr. Agarwal and appointed Ms. Neeta Jain as a substitute
Arbitrator.
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4. The appellant had already filed a suit before the City Civil Court at
Calcutta and an ad interim injunction was passed. In view of the order
passed by the learned City Civil Court on August 24, 2022, the
Arbitrator deferred the proceeding. The appellant was surprised to find
out that the respondent had initiated a proceeding before the learned
Arbitrator at Delhi, without any further reference to the earlier
proceeding and without any intimation to the appellant. By a letter
dated November 13, 2024, the petitioner raised an objection with regard
to the jurisdiction of the learned Arbitrator and brought the order
passed in the suit, to the notice of the learned Arbitrator. Without
deciding on such questions the learned Arbitrator passed the impugned
order, exparte. The order is challenged before this Court on the ground
that the learned Arbitrator could not have continued with the
proceeding on the ground of unilateral appointment and also because
the arbitral proceeding was pending before Smt. Neeta Jain, who was
appointed as the substitute Arbitrator by the Bombay High Court. The
learned Arbitrator appointed by the Bombay High Court was already in
seisin of the matter and had adjourned the proceedings in view of the
interim orders passed in the suit.
5. It is next submitted that by the interim order, the operation of the bank
account in Karur Vysya Bank, Kolkata, has been restrained and a
Receiver has been appointed to seize all immovable and movable assets
specified in the Schedule-I of the application.
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6. This Court finds that the entire cause of action arose within the
Ordinary Original Jurisdiction of this Court. The bank account which
has been frozen is within the Ordinary Original Jurisdiction of this
Court. Despite several opportunities and intimation to the respondent,
it failed to appear. The respondent also continues business within the
Ordinary Original Jurisdiction of this Court. It appears that the
respondent is not interested to contest this application. The subject
matter of arbitration is the loan which was availed of by the appellant
and the entire transaction, according to the appellant, as pleaded and
as supported by documents took place within the original jurisdiction of
this Court. The scope of for interference by this Court under Section
37(2) of the Arbitration and Conciliation Act.
“(2) An appeal shall also lie to a Court from an order of the
arbitral tribunal-
(a) accepting the plea referred in sub-section (2) or sub-
section (3) of section 16; or
(b) granting or refusing to grant an interim measure under
7. Court, under Section 2(1)(e) of the said Act, in the case of an arbitration
other than international commercial arbitration, is the principal Civil
Court of original jurisdiction in a district, and includes the High Court
in exercise of its ordinary original civil jurisdiction, having jurisdiction
to decide the questions forming the subject-matter of the arbitration, as
if the same had been the subject-matter of a suit, but does not include
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any Civil Court of a grade inferior to such principal Civil Court, or any
Court of Small Causes. An appeal was filed in Mumbai from an interim
order passed by the arbitrator who was unilaterally appointed. The
Bombay High Court passed an order. The law is well settled that the
provision of section 42 of the said Act will not apply to an appeal under
section 37(2) of the said Act. Reference is made to the decision in
Pandey & Co. Builders (P) Ltd. vs. State of Bihar and Another
reported in (2007) 1 SCC 467. Moreover, the respondent waived the
venue clause, by approaching the learned Arbitrator at Delhi and the
proceeding continued in Delhi.
8. Under such circumstances, in exercise of power under Section 37(2)(b),
this Court sets aside the order of injunction and allows the appeal. The
reasons behind of such decision are as follows :-
(a) During the pendency of an arbitral proceeding before
an Arbitrator appointed by the Bombay High Court, another
Arbitrator, sitting at Delhi passed an exparte interim order
which directly impacts and affects not only the day-to-day
business of the appellant, but also prevents the appellant from
enjoying the assets / movable and immovable properties,
auctioned in the schedule.
(b) The learned Arbitrator sitting at Delhi was unaware of
the proceedings in Bombay and was informed on November 13,
2024 about the pending suit. Objection as to jurisdiction and
unilateral appointment were raised. The learned Arbitrator was
7requested to hold a video conference to enable the appellant to
make necessary submissions. The learned Arbitrator did not
respond to the said letter and did not decide on the objection
raised by the appellant. Such objection was in terms of section
12(3) and 13 of the said Act, which are quote below :-
Section 12(3) is quoted below:-
“12 (3) An arbitrator may be challenged only if– (a)
circumstances exist that give rise to justifiable doubts
as to his independence or impartiality, or (b) he does
not possess the qualifications agreed to by the parties.
Section 13 is quoted below:-
13. Challenge procedure.–(1) Subject to sub-section (4),
the parties are free to agree on a procedure for
challenging an arbitrator.
(2) Failing any agreement referred to in sub-section (1),
a party who intends to challenge an arbitrator shall,
within fifteen days after becoming aware of the
constitution of the arbitral tribunal or after becoming
aware of any circumstances referred to in sub-section
(3) of section 12, send a written statement of the
reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-section
(2) withdraws from his office or the other party agrees to
the challenge, the arbitral tribunal shall decide on the
challenge.
(4) If a challenge under any procedure agreed upon by
the parties or under the procedure under subsection (2)
is not successful, the arbitral tribunal shall continue
the arbitral proceedings and make an arbitral award.
(5) Where an arbitral award is made under sub-section
(4), the party challenging the arbitrator may make an
application for setting aside such an arbitral award in
accordance with section 34.
(6) Where an arbitral award is set aside on an
application made under sub-section (5), the Court may
decide as to whether the arbitrator who is challenged is
entitled to any fees”
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(c) The learned Arbitrator was required to dispose of the
said letter as the letter was in the nature of a challenge to the
procedure.
9. The learned Arbitrator shall decide on the objection raised by the
appellant first and thereafter, take a decision on the application filed
under Section 17 of the Arbitration and Conciliation Act, 1996. The
appellant may file an additional objection.
10. The appeal and the connected application are, accordingly, disposed
of.
(SHAMPA SARKAR, J.)
B.Pal