Shri Ram Transport Finance ... vs Kartikram
2023 Latest Caselaw 465 Chatt

         HIGH COURT OF CHHATTISGARH, BILASPUR

                  Arbitration Appeal No.9 of 2018

       Shri Ram Transport Finance Company Limited, Through
       Its Branch Manager, Shri Ram Finance, M.M.Tower, First
       Floor, Axis Bank, Akashvani Road, Nayapara, Jagdalpur,
       Police Station and Tahsil Jagdalpur, Civil District
       Jagdalpur, Revenue District Bastar, Chhattisgarh, Mob.
       No. 9009778705.

                                                    ---- Appellant

                                 Versus

    1. Kartikram, S/o Late Khirnath Pujari, aged about 34 years
       R/o Nayapara Aasna, Police Station and Tahsil Jagdalpur,
       Civil District Jagdalpur, Revenue District Bastar,
       Chhattisgarh.

    2. Prakashchandra Khatri, S/o Hemraj Khatri, aged about 55
       years, R/o H.No.46, Masjid Road Jagdalpur, Police Station
       and Tahsil Jagdalpur, Civil District Jagdalpur, Revenue
       District Bastar, Chhattisgarh.

    3. Shri B.R.Nikunj, retired District Judge and Arbitrator, R/o
       Hig-08, Laxmi Niwas Lodhipara Sarkanda, Police Station
       Sarkanda, Tahsil, Civil and Revenue District Bilaspur,
       Chhattisgarh.

                                                ---- Respondents


  For Appellant              :      Mr. Ratnesh Kumar Agrawal,
                                    Advocate.
  For Respondents No1 & 2. :        Mr. Rakesh Thakur, Advocate.



             Hon'ble Shri Justice Arvind Singh Chandel

                        Judgment on Board

23.01.2023


       1. This appeal has been preferred under Section 37(1)(B)

          of the Arbitration and Conciliation Act 1996 by the

          Appellant being aggrieved with order dated 23.11.2017

          passed by the learned District Judge, Bastar at
   Jagdalpur     (C.G.)   in   Miscellaneous      Civil    Suit    No.

  12/2015, whereby the learned District Judge allowed

  the application filed by Respondents No.1 & 2 under

  Section 34 of the Arbitration and Conciliation Act 1996

  and set aside the award dated 08.12.2014 passed by

  the Arbitrator/Respondent No.3.


2. Facts

of the case are that Respondent No.1 had

obtained a loan to the tune of Rs.4,00,000/- from the

Appellant Company for purchase of truck bearing

Registration Number CG 17 H 0898. Respondent No.2

is the guarantor of said loan. Both the Respondents

No.1 & 2 executed a loan agreement in favour of the

Appellant Company. Later on, Respondent No.1

deposited Rs.3,63,000/- in installments against the

said loan. Since, Respondent No.1 has not deposited

remaining amount of the loan, the Appellant Company

taken the possession over the vehicle bearing

Registration Number CG 17 H 0898 and gave a legal

notice to Respondent No.1 on 08.10.2014. As the

Respondent No.1 failed to deposit the remaining

amount of loan, as per the terms of the agreement, the

Appellant Company referred the matter before

Arbitrator i.e. Respondent No.3. Vide order dated

08.12.2014, learned Arbitrator passed an award of

Rs.17,12,085 against Respondent No.1. Thereafter, an

application under Section 34 of the Arbitration and Conciliation Act, 1996 was preferred by Respondents

No.1 & 2 before the learned District Judge, Bastar at

Jagdalpur (C.G.). Vide impugned order dated

23.11.2017, the learned District Judge allowed the

application and rejected the award passed by the

Arbitrator on the ground that information of the

arbitration proceedings was not legally given to

Respondents No.1 & 2. Hence, this appeal has been

preferred by the Appellant/ Finance Company.

3. I have heard learned counsel appearing on behalf of the

parties and perused the record available with utmost

circumspection.

4. Undisputedly, Respondent No.1 had taken a loan of

Rs.4,00,000/- from the Appellant Company for

purchasing of a vehicle. There is no dispute on the

point that in installments total Rs.3,63,000/- has

already been deposited by Respondent No.1 against the

said loan and Rs.40,000/- left to be paid. There is also

no dispute on the point that no personal notice was

served upon Respondents No.1 & 2, whereas, it was

served through paper publication.

5. On perusal of award passed by the learned Arbitrator it

appears that On 30.09.2014, the arbitrator ordered for

issuance of notice to Respondents No.1 & 2 through

Registered Post with acknowledgement due. On 30.10.2014, when the matter was listed, it was found

that acknowledgement due of the sealed envelop in

which the summons were sent was not returned.

Therefore, the learned Arbitrator has passed the order

for serving notice through paper publication.

Thereafter, on 23.11.2014, the notice was published in

daily newspaper namely Highway Channel Jagdalpur

which is not the popular newspaper and lesser known

to public. Despite of that the learned Arbitrator

proceeded ex-parte order against Respondents No.1 & 2

mentioning that the notice was duly served upon them.

6. On perusal of order sheet and other material available

on record, it is well established that the notice was not

duly personally served to Respondents No.1 & 2 though

it was served through paper publication and that was

also lesser known newspaper. Therefore, the learned

District Judge has rightly held that the notice was not

duly served upon Respondents No. 1 & 2 as contained

in Section 34(2)(क)(3) of the Arbitration and Conciliation

Act 1996.

7. I do not find any merit in this appeal. Accordingly, the

same is liable to be and is hereby dismissed as no

merit.

Sd/-

(Arvind Singh Chandel) Judge Shubham