[Cites 4, Cited by 0]
Calcutta High Court
M/S Electronica Finance Ltd vs Kajal Dineshbhai Khunt And Anr on 26 February, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 7
ORDER SHEET
AP-COM/965/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
M/S ELECTRONICA FINANCE LTD
VS
KAJAL DINESHBHAI KHUNT AND ANR.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 26th February, 2026.
Appearance:
Ms. Sormi Dutta, Adv.
Mr. S. Chowdhury, Adv.
Mr. Sayan Ganguly, Adv.
Mr. S. Biswas, Adv.
. . .for the petitioner.
The Court:
1. Affidavit of service filed in Court is taken on record.
2. By the order dated February 3, 2026, this Court had directed that a
notice be served upon the respondents along with the copy of the order
dated February 3, 2026, indicating that the matter will be taken up on
26th February, 2026 and if the respondents failed to appear, the matter
would proceed.
3. Such notice along with the copy of the order has been duly served.
None appears despite service.
4. The petitioner is a non-banking financial company. The petitioner prays
for appointment of an Arbitrator to arbitrate upon the disputes arising
out of the term loan cum hypothecation agreement dated 1 st January,
2022. The case run by the petitioner is that the respondents
approached the petitioner for a loan, for the expansion of the business
of the respondent no.1. The respondent no. 2 agreed to stand as a
guarantors. The petitioner agreed to provide loan for an amount of
Rs.43,07,000/- and the Term Loan-cum-Hypothecation Agreement was
entered into between the parties. For the purpose of securing the loan,
the machines were hypothecated to the petitioner. The said machines
were installed at the premises of the respondent no.1 at Rajkot, Gujarat.
The loan was to be liquidated in 60 monthly instalments, but the
respondent had paid the 1st to 20th instalment and thereafter failed to
pay the remaining instalments. The last payment was made on May 5,
2024.
5. On February 24, 2025 the petitioner issued a demand notice to the
respondents calling upon the respondents to pay up the remaining
amount. The notice was issued from the office of the petitioner situated
within the jurisdiction of this Court. The payment was to be received by
the petitioner within the jurisdiction of this Court.
6. The petitioner filed an application under Section 9 of the Arbitration and
Conciliation Act, 1996 before the Chief Judge, City Civil Court at
Calcutta for appointment of a Receiver to take possession of the
machines. The Receiver was appointed. However, the Receiver could
not find the machines at the address. The petitioners have a claim of
more than Rs. 23 lakhs.
7. A notice invoking arbitration was issued on July 1, 2025 under Section
21 of the Arbitration and Conciliation Act, 1996. The loan was recalled
and the agreement was terminated. The petitioner has specifically
pleaded how this Court has jurisdiction to entertain the application.
8. The petitioner suggested names of three Arbitrators. The petitioner also
indicated that the place of arbitration shall be Kolkata. By the said
letter, the petitioner also invited objections, if any, from the respondents
with regard to the choice of Arbitrator and the venue.
9. Clause 11.4 of the said agreement contains the Arbitration Clause. In
this case venue cannot be read as a seat because there is a contrary
indication that the lender could also choose another venue for the
purpose of holding the arbitration.
10. The Clause is quoted below:-
"11.4 ARBITRATION AND JURISDICTION
Any disputes or differences arising between the Parties hereto as to
the interpretation of this Agreement or in connection with this
Agreement or any covenants or conditions thereof or as to the rights,
duties, of liabilities of any Party hereunder or as to any act,
performance or non-performance of any act. deed or thing as agreed
under this Agreement or matter or thing arising out of or relating to or
under this Agreement (even though the Agreement may have been
terminated,) the same shall be referred to a sole Arbitrator to be
appointed by the Lender, according to the provisions of Arbitration
and Conciliation Act 1996, and rules there under and any amendment
thereto from time to time.
The Language of arbitration shall be English. All cost of arbitration
including the arbitrator's fees, advocate fees, travailing cost other
miscellaneous expenses shall be borne equally by the Parties hereto.
The award of the arbitrator shall be a speaking award and shall be
final, conclusive and binding on all the Parties whether on question of
law or of fact. In the event of death, refusal, negligence, inability,
incapability of the persons so appointed to act as a sole arbitrator, a
new arbitrator shall be appointed by the Lender. The venue of
arbitration shall be Pune or such other place that the Lender may in
the sole discretion determine and Courts in Pune or such other place
shall have exclusive jurisdiction.
This Agreement shall be governed by and construed in all respects
with Indian laws and the Parties hereto agree that any matter or
issues arising hereunder or any disputes hereunder shall, at the
discretion of the Lender be subject to the exclusive jurisdiction of the
courts of the city of Pune or such other place as the Lender may deem
fit. This shall not however limit the rights of the Lender to take
proceedings in any other Court of competent jurisdictions."
11. Part of the cause of action took place within Kolkata.
12. The clause provides that the venue of arbitration would be Pune or
such other place that the lender may in its sole discretion determine.
The courts in Pune or such other place chosen by the petitioner would
have exclusive jurisdiction. There is sufficient indication that the
exclusivity of Pune as the venue has been taken away by further
incorporation of a choice given to the lender, in its sole discretion, to
choose a venue and the overall jurisdiction of courts. Thus, venue
cannot be read as a seat and Pune cannot have exclusive jurisdiction to
entertain an application for appointment of an arbitrator. Moreover, the
respondents did not object to the selection of Kolkata as the venue and
waived the right to object to the choice exercised by the lender.
13. Under such circumstances, this Court allows the application by
appointing Mr. Sourojit Dasgupta, learned Advocate, as the learned
Arbitrator, to adjudicate the disputes between the parties. This
appointment is subject to compliance of Section 12 of the Arbitration
and Conciliation Act, 1996.
14. The learned Arbitrator shall fix his remuneration as per the Schedule
of the Act.
15. All objections with regard to jurisdiction, arbitrability, admissibility
and limitation etc, are left open.
16. The application is, accordingly, disposed of.
(SHAMPA SARKAR, J.)
SP/
