Calcutta High Court
Vigles Security Private Limited vs L And T Finance Limited on 22 January, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OD-1
ORDER SHEET
APOT/412/2024
IA GA-COM 1 OF 2024
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
VIGLES SECURITY PRIVATE LIMITED
VS
L AND T FINANCE LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 22ndJanuary, 2025.
Appearance:
Mr. Ratul Das, Adv.
Mr. Karanjeet Sharma, Adv.
Ms. Shreya Goenka, Adv.
...for the appellant/petitioner
Mr. Ritoban Sarkar, Adv.
Ms. Shrayashee Das, Adv.
Mr. Rohan Kumar Thakur, Adv.
Mr. TridibeshDasgupta, Adv.
. ..for the respondent
The Court:This is an application under Section 37 of the Arbitration
and Conciliation Act, 1996. The order dated October 24, 2024 passed by the
learned sole Arbitrator is under challenge in this proceeding. By the order
impugned, the learned Arbitrator had imposed a debit freeze on the account of
the petitioner maintained with the Axis Bank, Sector 9, Gurgaon, Haryana for
the sum of Rs. 20,47,178.30.
It was directed that in case of failure on the part of the petitioner to
deposit the said amount of Rs.20,47,178.30 within seven days from the date of
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the order, there would be an order of attachment/debit freeze of the bank
account till the disposal of the arbitration proceeding. The concerned Branch
Manager of the bank was directed to debit freeze the said accounts of the
petitioner in terms of the order. The petitioner came to know of such order,
when the bank had marked debit freeze on the said account.The petitioner’s
contention is that neither a notice under Section 21 of the Arbitration and
Conciliation Act,nor the statement of claim and nor the order impugned, were
served upon the petitioner. Further contention of the petitioner is that
unilateral appointment of an arbitrator by the financial company was contrary
to law laid down by the Hon’ble Apex Court.
The petitioner further contends that by letter dated December 4,
2024, the learned Arbitrator was requested to supply copy of the order and the
pleadings. The learned Arbitrator did not take any step.Another application,
throwing a challenge to the arbitrator was filed on December 6, 2024.
Thus, it is contended by the petitioner that the learned arbitrator
lacked jurisdiction to embark upon the adjudication of the dispute between the
parties and hence the order passed by the learned arbitrator was null and void.
Mr. Sarkar, learned advocate for the respondent submits that the
learned arbitrator was appointed prior to the decision of the Hon’ble Apex
Court with regard to unilateral appointment in a pending proceeding. The ratio
laid down by the Hon’ble Apex Court would not be applicable. Moreover, the
fact that the petitioner had defaulted in paying more than of Rs. 20 lakh to the
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finance company, is not in dispute. The arbitration clause is also not in
dispute. Under such circumstances, the learned arbitrator had balanced the
convenience and inconvenience of the parties by passing the impugned order.
According to Mr. Sarkar the learned Arbitrator was appointed on October 17,
2024.
An injunction is imposed on the test of three parameters.Prima facie
case, balance of convenience and inconvenience and irreparable loss and
injury. With regard to the, prima facie case, Mr. Das has satisfied the Court
that the learned arbitrator had been unilaterally appointed, which was contrary
to the law laid down by the Hon’ble Apex Court. The appointment wassome
time in October, 2024 when the decisions were already pronounced and the
Hon’ble Apex Court had laid down the principle that unilateral appointment of
an arbitrator was contrary to the principles of party autonomy as it deprived
one of the parties from appointing an arbitrator in spite of agreement to have
their dispute resolved by arbitration.
Reference is made to the decision in:-
1. Bharat Broadband vs. United Telecom : 2019) 5 SCC 755;
2. Perkins Eastman Architects DPC &Anr. Vs. HSCC (India) Limited.
: (2020) 20 SCC 760.
Thereafter, the Hon’ble Constitution Bench passed a decision on November 8,
2024 in the matter of Central Organisation for Railway Electrification vs. ECI
SPIC SMO MCML (JV) a Joint Venture Company reported in 2024 SCC OnLine
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SC 3219. The same principles were reiterated. With regard to the balance of
convenience and inconvenience, it appears that the order had practically put a
complete halt on the operation of the bank account which, according to the
petitioner, has led to difficulty in running its day to day business. The balance
of convenience and inconvenience in this case is tilted against the petitioner.
With regard to the irreparable loss and injury, this Court is of the view,that
protective measures in favour of the respondent cannot override the
inconvenience that has been caused to the petitioner.The order which was
passed as aninterim measure,amounted to granting the main relief of the
claimant.
There will be stay of operation of the order dated October 24, 2024
for a period of six weeks
Let affidavit-in-opposition be filed by the respondent within two
weeks, reply thereto, if any, be filed within a week thereafter. Let this matter
appear in the monthly list of March, 2025.
The concerned bank shall act on the basis of the server copy of the
order and remove the debit freeze from the said account.
(SHAMPA SARKAR, J.)
TR/
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