Kerala High Court
Rafeek B vs M/S. Shriram Finance Ltd on 20 December, 2024
AR NO.218/2024 1
2024:KER:97791
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 20TH DAY OF DECEMBER 2024/29TH AGRAHAYANA, 1946
AR NO. 218 OF 2024
PETITIONER:
RAFEEK B
AGED 32 YEARS, S/O.JAFARNEESA,
KIZHAKKUMURRY, VANDAZHY, ALATHUR TALUK,
PALAKKAD DISTRICT, PIN - 678706
BY ADVS.G.HARIHARAN
PRAVEEN.H.
K.S.SMITHA
B.R.SINDU
V.R.SANJEEV KUMAR
V.ROHITH
AFNA V.P.
REMYA MURALI
RESPONDENTS:
M/S.SHRIRAM FINANCE LTD
1ST FLOOR, DELMA EXPRESS BUILDING, OPPOSITE
CHERUPUSHPAM SCHOOL, VADAKKENCHERRY, ALATHUR
TALUK, PALAKKAD DISTRICT, REPRESENTED BY ITS
BRANCH MANAGER, PIN - 678683
BY ADVS.
C.HARIKUMAR
SANDRA SUNNY(K/926/2020)
ARUN KUMAR M.A(K/1197/2021)
FARAH JYOTHI PRADEEP(K/1240/2023)
THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON
20.12.2024, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
AR NO.218/2024 2
2024:KER:97791
ORDER
Dated this the 20th day of December, 2024
The petitioner has filed this Arbitration Request invoking Section
11 of the Arbitration and Conciliation Act, 1996 (for short “the Act of
1996”) seeking to appoint a sole Arbitrator to adjudicate the disputes
and differences between the petitioner and the respondent arising out
of a loan agreement.
2. The petitioner had purchased a TATA Prima Taurus Lorry
bearing registration No.KL-49/N-9570 on 30.09.2022 by availing
finance from the respondent Company. A loan agreement bearing No.
VDCHY2209090001 dated 30.09.2022 had been entered into between
the petitioner and the respondent. The said agreement in Article 22
contained a clause for resolution of the disputes through arbitration. As
per the agreement, the finance amount of Rs. 49,00,000/- had to be
paid in 69 monthly installments at the rate of Rs.1,12,975/- per month.
Petitioner though claims to have made remittances towards
installments regularly up to June, 2024, admittedly defaulted in meeting
the subsequent installments. Attempts for repossessing the vehicle
were made by the respondent which was not completed and the
AR NO.218/2024 3
2024:KER:97791
petitioner was informed that an Arbitrator of the choice of the
respondent had been appointed and the arbitration proceedings would
soon commence. Petitioner then issued Annexure IV letter dated
21.10.2024 objecting to unilateral appointment of the Arbitrator and
suggesting a panel of two Retired District Judges as Arbitrators. Since
Annex IV letter which has been issued in compliance with Section 21 of
the Act had been received, but not responded to by the respondent, the
petitioner has filed this Arbitration Request invoking Section 11 of the
Act of 1996.
3. The Arbitration Request was admitted and vide an interim
order, the respondent was interdicted from taking forceful possession
of the concerned vehicle. Notice was taken out and the respondent
appeared and filed a counter affidavit. Execution of the loan agreement
containing the arbitration clause is admitted in the counter affidavit. An
objection has been raised pointing out that the petitioner had chosen to
rush to the Court with this Arbitration Request without even waiting for
completion of the 30-day time period as mandated under the statute.
Regarding the panel of Arbitrators suggested by the petitioner, the
respondent has stated that the said panel is not acceptable to them. A
AR NO.218/2024 4
2024:KER:97791
copy of the lawyer notice issued by the respondent to the petitioner
inter alia informing that a Section 11 application will be moved by the
respondent seeking appointment of Arbitrator has been produced along
with the counter affidavit of the respondent as Annexure R 1 (a).
4. Heard Sri.G.Hariharan learned counsel appearing for the
petitioner and Sri.C.Harikumar, learned counsel appearing for the
respondent.
5. The learned counsel for the petitioner submits that the
respondent cannot unilaterally appoint an Arbitrator and relies on the
dictum laid down in Tulsi Developers India Pvt. Ltd. v. Dr. Appu
Benny Thomas [2021 (5) KHC 404] which followed the dictum in TRF
Ltd. v. Engineering Projects Ltd. [(2017) 8 SCC 377]. The learned
counsel for the respondent made submissions in line with the counter
affidavit filed. He too concurred that an Arbitrator can be appointed by
this Court taking note of the fact that the respondent had already
issued Annexure R1(a) for the same purpose. As regards the non
production of a copy of the agreement, in the light of the admission by
both sides regarding the existence of the arbitration clause in the
agreement between them, the same need not stand in the way of
AR NO.218/2024 5
2024:KER:97791
appointing Arbitrator by consent of parties. It is trite than an application
under Section 11 need not be dismissed on technical grounds.
6. The Hon’ble Supreme Court has in SBI General Insurance
Co. Ltd v. Krish Spinning [2024 SCC OnLine SC 1754] held that the
referral court should limit its enquiry to examining whether a Section
11(6) application has been filed within the three-year period of
limitation and that while at the stage of deciding an application for
appointment of an Arbitrator, the court must not conduct an intricate
evidentiary enquiry into whether the claims raised by the applicant are
time-barred and should leave that question for the Arbitrator to
determine. It is noted that in this case, the Section 11(6) application
has been filed within the three-year period of limitation. Counsel is at
ad idem regarding the existence of the arbitration agreement and the
need to appoint an Arbitrator to resolve the disputes between the
parties. They submitted in unison that a retired District Judge from the
panel of Arbitrators maintained by this Court may be appointed as the
Arbitrator. The place of arbitration chosen is at Kozhikode.
Accordingly, this Arbitration Request stands allowed and it is
ordered as follows :
AR NO.218/2024 6
2024:KER:97791
(i) Sri.Asokan K., Retired District Judge, Asoka Gardens,
Thuvacode Post, Chemancherry, Kozhikode 673304, is nominated
as the sole Arbitrator to resolve the disputes that have arisen
between the petitioner and the respondent.
(ii) The learned Arbitrator may entertain all disputes/ issues
between the parties in connection with the said agreement,
including questions of jurisdiction and limitation, if any, raised by
the parties.
(iii) The Registry shall communicate a copy of this order to the
learned Arbitrator within ten days from today and obtain a
Statement of Disclosure from the learned Arbitrator as stipulated
under Section 11(8) read with Section 12(1) of the Act of 1996.
(iv) Upon receipt of the Disclosure Statement, the Registry shall
issue to the learned Arbitrator a certified copy of this order with a
copy of the Disclosure Statement appended. The Original of the
Disclosure Statement shall be retained in Court.
(v) The fees of the learned Arbitrator shall be governed by the
Fourth Schedule of the Act of 1996.
Sd/-
SYAM KUMAR V. M.
JUDGE
csl
AR NO.218/2024 7
2024:KER:97791
APPENDIX OF AR 218/2024
PETITIONER’S ANNEXURES
Annexure I A TRUE COPY OF THE INVOICE DATED
30.09.2022 ISSUED BY M/S POPULAR MEGA
MOTORS (INDIA) PVT. LTD., PALAKKAD
Annexure II A TRUE COPY OF THE STATEMENT OF ACCOUNT
ISSUED BY THE RESPONDENT COMPANY
RELATING TO THE VEHICLE MENTIONED ABOVE
UPTO 25.09.2024
Annexure III A TRUE COPY OF THE RC STATUS OF THE
VEHICLE BEARING REGISTRATION NO.KL-49N-
9570
Annexure IV A TRUE COPY OF THE OBJECTION DATED
21.10.2024 SENT BY THE PETITIONER
ADDRESSED TO THE RESPONDENT
Annexure V A TRUE COPY OF THE INTERIM ORDER PASSED
IN CONNECTION WITH A.R.NO.37/2022 DATED
19.01.2022 BY THIS HON’BLE COURT
RESPONDENT EXHIBITS
EXHIBIT R1(a) The true copy of the Lawyer Notice
issued on behalf of this respondent to
the petitioner dated 14.11.2024