Calcutta High Court
Srei Equipment Finance Limited vs Marina Piling Company Pvt. Ltd. And Anr on 9 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OC-19
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/198/2025
SREI EQUIPMENT FINANCE LIMITED
VS
MARINA PILING COMPANY PVT. LTD. AND ANR.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 9th June 2025.
Appearance:
Mr. Swatarup Banerjee, Adv.
Mr. Sariful Haque, Adv.
Mr. Saubhik Chowdhury, Adv.
Ms. Tapasika Bose, Adv.
...for petitioner.
1. This is an application for appointment of an arbitrator under Section 11(6)
read with Sections 14 and 15 of the Arbitration and Conciliation Act,
1996.
2. The petitioner submits that the erstwhile learned arbitrator, who was
unilaterally appointed by the petitioner, has recused. The respondents
were represented by their learned advocate who had raised an objection
with regard to continuation of the proceedings. Upon consideration of the
objections raised as to the constitution of the tribunal, the learned
arbitrator recused. It appears that the matter did not progress at all.
3. As the respondents were not appearing before the Court, despite repeated
directions, the Court had directed substituted service. The affidavit of
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service is taken on record. It appears that paper publications have been
effected in two new papers at Navi Mumbai.
4. The dispute arises out of a loan agreement. The petitioner claims to have
provided financial assistance of Rs.2,84,74,400/- to the respondents and
the loan-cum-hypothecation agreement was entered into on December 5,
2018. The respondent No. 1 is the borrower and the respondent No. 2 is
the guarantor. The repayment schedule required payment of
Rs.3,63,15,000/- including interest, in 45 instalments, commencing from
February 15, 2019. Each monthly instalment would become payable on
every 15th day of the succeeding calendar month.
5. It is submitted by Mr. Banerjee, that a part of the 7 th instalment had been
paid by the respondents. Thereafter, the respondents defaulted. Even
after repeated reminders, the respondents failed and did not pay the
monthly instalments. By a notice dated December 24, 2019, the
agreement dated December 5, 2018 was duly terminated and a demand
was raised for Rs.3,07,11,263.65/-. It is submitted that more than Rs. 3
crores is payable. The petitioner raised demand notice on December 24,
2019. It is submitted by the petitioner that the period excluded by the
Hon’ble Apex Court between March 15, 2020 and February 28, 2022
(Covid Period) shall be applicable in computing the period of limitation
with regard to the claim, in this case.
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6. The petitioner had unilaterally appointed a learned advocate as the
arbitrator. Thereafter, the petitioner went into CIRP. The petitioner has
now come out of the CIRP and an asset reconstruction company namely
NARCL is the successful resolution applicant.
7. Upon recusal of the learned arbitrator who was unilaterally appointed,
this application has now been filed upon due service of a further notice
under Section 21 of the Arbitration and Conciliation Act, 1996. The
petitioner draws the attention of this Court to the order dated December
16, 2024, by an order of injunction on the secured asset was passed and
the Court had granted liberty to the petitioner to proceed for appointment
of a receiver. It is submitted that a receiver has since been appointed by
this Court.
8. Under such circumstances, this application is allowed, taking into
consideration the arbitration clause as also the jurisdiction clause. The
agreement provides that the same is subject to the exclusive jurisdiction of
the courts at Kolkata and all disputes arising out of the said agreement,
including interpretation thereof, shall be decided by an arbitrator.
Although, the clause provides for appointment of an arbitrator by the
company, in view of the settled principle of law, such procedure of
appointment is no longer permissible. Thus, the mechanism for
appointment of an arbitrator in the present matter has no legal sanction
in view of section 12(5) of the Arbitration and Conciliation Act, 1996..
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9. Under such circumstances, the application is allowed. This Court
appoints Mr. Justice Subrata Talukdar, former Judge of this Court 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. All objections that are
available to the respondents, shall be raised before the learned Arbitrator.
The arbitrability of the dispute, admissibility of the claim, jurisdiction etc.
are all left open, to be decided by the learned arbitrator.
10. The application is disposed of.
(SHAMPA SARKAR, J.)
S. Kumar / R.D. Barua
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