Delhi High Court
Sangeeta Chadha & Ors. vs M/S Bansal Credits Ltd. on 7 March, 2017
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 456/2016 & IA Nos.13429-13430/2016
SANGEETA CHADHA & ORS. ..... Petitioners
Through: Mr N. M. Popli, Advocate.
versus
M/S BANSAL CREDITS LTD. ..... Respondent
Through: Mr Kunal Madan and Mr Shyam,
Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 07.03.2017
VIBHU BAKHRU, J
1. The petitioners have filed the present petition under Section 34 of the
Arbitration and Conciliation Act, 1996 (hereafter 'the Act') impugning an
arbitral award dated 19.10.2015 (hereafter 'the impugned award') rendered
by the Sole Arbitrator, Sh. R.C. Vashist.
2. The present petition was filed on 03.10.2016, which is apparently
beyond the period of limitation as specified in Section 34(3) of the Act.
However, the petitioners claim that they had not received a signed copy of
the impugned award and, therefore, the present petition is within time.
3. The petitioners further allege that respondent had played a fraud and
had secured the impugned award by claiming that a loan of ₹1 crore was
disbursed whereas infact the petitioners had only applied for a loan of
₹30,00,000/- and only ₹23,00,000/- had been disbursed by the respondent.
4. The present petition was listed for the first time on 27.10.2016 and on
the said date, it was contended on behalf of the petitioners that out of a sum
of ₹23,00,000/- disbursed to the petitioners, they had already returned more
than ₹13,00,000/- and to show their bonafides, the petitioners would deposit
a sum of ₹15,00,000/- within a period of three weeks. Notice in the petition
was issued subject to the petitioners depositing the sum of ₹15,00,000/- with
the Registrar General of this Court.
5. The petition was taken up again on 11.01.2017 and on the said date,
the learned counsel for the petitioners submitted that he was carrying a
demand draft aggregating ₹15,00,000/- and undertook to deposit the same
by 13.01.2017. Since it was not disputed that at least a sum of ₹15,00,000/-
was payable by the petitioners to the respondent, the Registry was directed
to encash the said drafts and release the funds in favour of the respondent.
6. The respondent had filed a response to the present petition claiming
that the impugned award was duly served upon the petitioners at the correct
address. The respondent has also filed postal receipts along with its reply to
indicate that the impugned award was dispatched to the respondents by
registered post. Subsequently, the respondent also filed information received
from the Office of the Senior Superintendent of Post Offices, Ghaziabad
Division, Ghaziabad pursuant to an application under the Right to
Information Act, 2005 which indicated that the postal "articles were
delivered to Shri Anil Chaddha whose mobile number is 9810000603". An
attested copy of the delivery slip was also attached with the response of the
postal authorities. The delivery slip indicates that the articles in question
were delivered at the address III-E 126; the delivery slip bears the signatures
of the recipient and the mobile number 9810000603.
7. The petitioners have flatly denied the receipt of the postal articles (the
impugned award) and it is asserted that the signatures on the delivery slip
are not that of any of the petitioners or their family members. Mr Popli,
learned counsel appearing for the petitioners also contended that the address
of the petitioners, being III-E 126, Nehru Nagar, is also similar to the
address III-E/26, Nehru Nagar and, therefore, it is possible that the
impugned award would have been delivered at the said incorrect address,
which is also occupied by a family with the surname Chadha.
8. The attested copy of the delivery slip produced by the respondent
establishes that the postal articles (stated to contain the impugned award)
were received at the address of the petitioners. The person receiving the
same had signed and also put the telephone number of petitioner no.3. A
bare perusal of the signatures also indicates that the surname of the recipient
is Chadha. Thus, the contention that the postal articles may have been
delivered at a wrong address, cannot be accepted. The mobile number
mentioned on the delivery slip is admittedly that of petitioner no.3 and it is
not possible to accept that a person residing at III-E/26, Nehru Nagar would
have accepted the postal articles addressed to the petitioners and also given
the mobile number of petitioner no.3.
9. It is clear that the arbitrator had sent the impugned award by
registered post which was duly received at the residence of the petitioners
and, therefore, the present petition is beyond the period of limitation.
10. In the given circumstances, it is difficult to accept that the petitioners
had not received the copy of the impugned award sent by registered post. It
is also not possible to accept that the postal authorities would have
manipulated the delivery slip/ receipts to show the delivery of the postal
articles at the address of the petitioners. Thus, this court finds that the
present petition is not maintainable as having been filed beyond the period
of limitation.
11. Notwithstanding that this Court finds that the present petition is
barred by limitation, it is also considered apposite to examine the petition on
merits as well.
Factual background
12. Briefly stated, the relevant facts necessary to consider the controversy
in the present petition are as under:
12.1 The respondent is a company which is inter alia engaged in the
business of providing loans and financial assistance to various borrowers.
The petitioners are individuals and had availed the financial assistance from
the respondent.
13. The respondent claimed that it had advanced a loan of ₹1 crore to the
petitioner no.1, which was guaranteed by petitioner nos. 2 and 3. It is
claimed that the said loan was also secured against equitable mortgage of the
property bearing No. III-E 126, Nehru Nagar, Ghaziabad and the title deeds
of the said property were also deposited with the respondent company. The
parties also entered into a loan agreement (being loan agreement no. S-6391-
P-14) dated 14.06.2013.
14. The respondent claimed that the said loan was to be repaid in 59
monthly instalments. The respondent claims that the petitioners paid a sum
of ₹13,40,000/- but defaulted in repayment of further instalments.
Consequently, the respondent terminated the loan agreement on 07.05.2014.
Thereafter the respondent sent a legal notice dated 18.11.2014 calling upon
the petitioners to pay a sum of ₹1,37,09,516/- comprising of ₹1,08,73,594/-
as instalments and ₹28,35,922/- as interest and incidental charges till
12.11.2014. The respondent also demanded further interest on the said sum
at the rate of 3% per month from 13.11.2014 till realisation.
15. The petitioners responded to the aforesaid notice by a letter dated
06.12.2014 issued by their advocate simply denying their liability to pay the
amount demanded without mentioning any particulars.
16. The respondent referred the disputes to Shri R. C Vashisht, who was
named as the arbitrator in the loan agreement and filed the Statement of
Claims. The arbitrator entered upon reference and by a letter dated
06.02.2015 forwarded the Statement of Claims to the petitioners and called
upon the petitioners to file their objections. He also scheduled a hearing on
12.03.2015.
17. The petitioners responded to the said notice by a letter dated
07.03.2015 issued by their advocate. The petitioners alleged that the
arbitrator was not impartial, however, the petitioners did not deny the
existence of the loan agreement in question and did not make any allegation
that the same was fabricated or doctored.
18. The petitioners did not participate in the arbitral proceedings and were
proceeded ex parte. The arbitrator considered the material on record and
passed the impugned award awarding a sum of ₹1,45,07,714/- as on
20.01.2015 (₹1,08,73,594/- as instalments and ₹36,34,120/- as interest and
charges till 20.01.2015). The arbitrator also awarded interest at the rate of
12% p.a from 21.01.2015 till the date of realisation.
19. In the meantime, the respondent also filed a petition under Section 9
of the Act [OMP(I) 255/2015] and on 18.05.2015, this court issued notice
and also directed that status quo be maintained in respect of the property
bearing no. III-E 126 Nehru Nagar, Ghaziabad. The matter was also listed
for mediation however the same was not successful. The said petition was
subsequently withdrawn on 26.04.2016. In the meanwhile, on 19.10.2015,
the arbitrator published the impugned award and the respondent also moved
the Court at District Judge Ghaziabad for enforcement of the arbitral award.
20. The petitioners allege that the arbitral award has been procured by
fraud inasmuch as the petitioners claim that only ₹23,00,000/- had been
disbursed by the respondent in the bank account of petitioner no. 1. It is
alleged that the petitioners had signed the loan agreement in blank and the
respondent had filled up the blanks to reflect a loan of ₹1 crore.
Submissions
21. Mr Matta, learned Senior Counsel appearing for the respondent had
contended that the averments made in the petition were palpably false. He
drew the attention of this Court to the request letter dated 14.06.2013 issued
by petitioner no.1 which indicated that the petitioner no.1 had requested for
a loan of ₹1 crore out of which ₹23,00,000/- was to be disbursed in the bank
accounts and ₹77,00,000/- was to be adjusted against other outstanding
loans of petitioner no.1 and her family members, which were listed out in
the annexure to her request letter.
22. Mr Matta also contended that petitioners' contention that they were
not aware of the impugned award, was erroneous as the postal authorities
had confirmed that the postal articles (containing the impugned award) were
delivered at the petitioners' address. He contended that the respondent had
initiated execution proceedings for enforcement of the impugned award
before the District Court Ghaziabad and the counsel appearing for the
petitioners had requested documents on 29.04.2016; pursuant to which, the
same were provided to the counsel. He submitted that although the Court
had not recorded that the documents had been received by the counsel, the
orders passed subsequently indicated that no grievance regarding non-
receipt of documents was made by the counsel appearing for the petitioners.
And, this clearly implied that the documents including a copy of the
impugned award had been received by the petitioners' counsel.
23. Mr N.M. Popli, learned counsel appearing for the petitioners disputed
that any loan was transferred on the request of petitioner no.1. He also drew
the attention of this Court to affidavits filed by petitioner no.2 affirming that
the loans taken earlier had been duly repaid. The petitioner no.1 had filed an
affidavit disputing the signatures on the request letter dated 28.03.2012 filed
by the respondent.
Reasons and conclusion
24. At the threshold, it is necessary to observe that there is no dispute that
the petitioners had availed a loan from the respondent. It is admitted that the
petitioner no.1 had received a sum of ₹23,00,000/- by RTGS in her account.
The respondent had claimed that in addition to the sum of ₹23,00,000/-,there
were other loans outstanding against petitioner no.1 and other members of
the family, which were discharged by passing book entries and including the
outstanding amount in the amount of ₹1 crore under loan agreement.
According to the respondent, outstanding amounts aggregating ₹77,00,000/-
were transferred to the loan account of petitioner no.1 at her request and
accordingly discharged.
25. The petitioners have disputed the same. The petitioners do not dispute
that other loans had also been availed by the petitioners/family members.
However, their case is that the said loans were repaid.
26. The principal component of the sum of ₹77,00,000/- is stated to be a
loan of ₹49,00,000/- availed by petitioner no.1 on 31.03.2011. The
respondent had filed a statement of its bank account indicating that a sum of
₹48,09,305/- was remitted by RTGS to the account of petitioner no.1 on
31.03.2011. Petitioner no.2 has filed an affidavit enclosing therewith a
statement of the loan account No. S-5081-P-28/2011 indicating that a sum of
₹48,09,250/- was received by petitioner no.1 in her bank account. Thus,
there is no material dispute as to the receipt of the aforesaid amount.
Admittedly, the said sum was disbursed after deducting certain charges by
the respondent, therefore, the minor discrepancy as to the amounts is not
material and it cannot be disputed that the sum of ₹48,09,305/- was remitted
directly into the bank account of petitioner no.1.
27. However the petitioners state that the said loan was repaid. The
respondent on the other hand disputes the same and has produced a letter
dated 28.03.2012 addressed by petitioner no.1 to the respondent, which
reads as under:-
"DATE: 28/03/12
M/S BANSAL CREDITS LTD.
1, ANSARI ROAD,
DARYA GANJ,
NEW DELHI.
Reg.:- LOAN AGAINST PROPERTY OF RS. 49 LACS
Sir,
I, Sangeeta Chadha W/o Sh. Nand Kisore Chadha R/o III-E
126, Nehru Nagar, Ghaziabad (UP) inform you that I will not
be able to repay the balance outstanding against Property
under Loan Agreement No.S-5081-P-28. I request you to
sanction a fresh loan of Rs. 49 Lacs against my Property for a
period of 5 years so that I can gradually clear off my liability.
I further request you to adjust this fresh sanction of Loan
against Property of Rs. 49 Lacs against overdue payment in
the Loan against Property under Loan Agreement No. S-
5081-P-28.
I shall be thankful to you.
Thanking you
Yours Faithfully
S/d
Sangeeta Chadha"
28. The aforesaid letter indicates that the loan disbursed on 31.03.2011
was not repaid.
29. The respondent has also produced another letter dated 14.06.2013
addressed by petitioner no.1, which reads as under:-
"DATE: 14/06/13
M/S BANSAL CREDITS LTD.
1, ANSARI ROAD,
DARYA GANJ,
NEW DELHI.
REG. :- LOAN AGAINST PROPERTY OF RS. 1 CRORE
Sir,
I, Sangeeta Chadha W/o Sh. Nand Kisore Chadha R/o III-E
126, Nehru Nagar, Ghaziabad (UP) along with my husband
Sh. Nand Kishore Chadha and my brother in law Sh. Anil
Kumar Chadha had approached your company and explained
about our family transport business not running well as a
result of which there are overdues in the loan against
Property under loan agreement no. S-5613-P-28. Besides this
there are heavy overdues against the vehicles financed under
the guarantee of my husband Sh. Nand Kishore Chadha and
my brother in law sh. Anil Kumar Chadha and also in the
vehicles financed in their name by your Company. I am
thankful that you considered our request and agreed to
sanction a loan of Rs. 1Crore against my property at III-E
126, Nehru Nagar, Ghaziabad (UP).
I now request you to disburse the loan of Rs. 1Crore against
my Property in the following manner:-
1. Rs.77,00,000/- (Rupees Seventy Seven Lacs
Only) towards the overdue payments of the loan
agreements as per the list attached.
2. Rs.23,00,000/- (Rupees Twenty Three Lacs Only)
to be paid to me to bring the family business back
on track.
I shall be thankful to you.
Thanking you
Yours Faithfully
S/d
Sangeeta Chadha"
30. The list annexed with the aforesaid letter refers to various loan
agreements and the amounts outstanding against the said loans. The list
included a specific reference to loan agreement No. S-5613-P-28 against
which a sum of ₹49,00,000/- was shown as outstanding.
31. The respondent has also produced a loan agreement being S-5613-P-
28 dated 28.03.2012 indicating a disbursal of ₹49,00,000/-. The said loan
agreement is signed by the petitioner no.1. Petitioner no.3 has also signed
the said agreement as a Co-guarantor. As per the said loan agreement,
petitioner no.1 had agreed to repay a total sum of ₹79,67,500/- inclusive of
interest at the rate of 21.46% per annum in 60 monthly instalments including
first instalment of ₹5,000/-, 58 instalments of ₹1,35,000/- and the final
instalment of ₹1,32,500/-. The statement filed by petitioner no.2 as annexure
A to his affidavit dated 01.03.2017 indicates that petitioner no.1 had
received an amount of ₹48,09,250/- on 31.03.2011 (in loan agreement No.S-
5081-P-28/ 2011) and the said loan was fully repaid by 06.07.2013. Thus,
whereas according to respondent, the amount of ₹48,09,305/- disbursed
under loan agreement No.S-5081-P-28/2011, was re-scheduled on
20.03.2012 (as loan No. S-5613-P-28) and subsequently included in the loan
agreement pertaining of ₹1 crore (loan agreement no. S-6391-P-14), which
was the subject matter of proceedings before the arbitrator. The petitioners
on the other hand claim that the said loan was discharged in the manner as
indicated in the statement of account annexed with the petitioner no.2's
affidavit of 01.03.2017.
32. In the affidavit dated 01.03.2017, petitioner no.2 has, inter alia,
affirmed certain entries reflected in the statement annexed to that affidavit
which were made in cash and were not reflected by the respondent. If the
said dates of the said entries as stated in the affidavit are co-related with the
entries in annexure A to the said affidavit, it would be clear that it is the
petitioners' case that the following amounts were paid in cash in discharge
of the loan of taken by petitioner no.1 in the following manner:-
(i)₹5,00,000/- on 08.03.2013
(ii)₹4,00,000/- on 21.03.2013
(iii)₹5,00,000/- on 02.04.2013
(iv) ₹1,35,000/- on 30.04.2013
(v) ₹10,00,000/- on 15.06.2013
(vi) ₹9,00,000/- on 17.06.2013
(vii) ₹2,50,000/- on 06.07.2017
__________
Total ₹ 36,85,000/-
33. Thus, it is the petitioners' case that, in aggregate, a sum of
₹36,85,000/- was paid in cash during the period of approximately four
months from 08.03.2013 to 06.07.2013. Mr Popli was pointedly asked
whether the petitioners have any evidence by way of receipts to show that
the respondent had received any of the aforesaid payments allegedly made in
cash. Mr Popli responded in the negative. He stated that no such receipts
were available as according to the petitioners, the respondent did not issue
receipts for payments received in cash.
34. The respondent is a company engaged in the business of extending
credit. The agreements with petitioners have been documented and it is not
possible to believe the petitioners' affidavit that they had paid a sum of
₹36,85,000/- in cash and were naive enough to do so without any
acknowledgement. It is also relevant to mention that repayment of loan in
cash for the sum specified above, is impermissible under the Income Tax
Act, 1961 and is also contrary to law.
35. I am in no manner of doubt that the affidavit affirmed by petitioner
no.2 is false as there is no plausible reason as to why the petitioners would
be compelled to make the payments in cash and that too without obtaining
any receipts from the respondent company. Thus, in my view, the
fundamental assertion that the petitioners had only received a sum of
₹23,00,000/- against a loan of ₹1 crore as claimed by the respondent, cannot
be accepted and consequently, the petitioners are not entitled to any relief.
36. It is also relevant to note that it is not disputed that the petitioners
were fully aware of the arbitral proceedings and that the arbitrator had under
the cover of his letter dated 06.02.2015 forwarded the Statement of Claims
filed by the respondent in terms of the agreement dated 14.06.2013. The
petitioners had responded to the said notice through their Advocate
challenging the authority of the arbitrator. However, they had not denied the
agreement dated 14.06.2013. Plainly, if the agreement had been manipulated
or fabricated to show a loan of ₹1 crore instead of ₹23,00,000/-, surely the
petitioners would have made a mention of it in their response. However, the
petitioners did not raise any issue regarding the genuineness of the
agreement.
37. The petitioners have annexed the loan agreement dated 14.06.2013
(loan agreement No.S-6391-P-14) which expressly indicates that the
petitioners have availed of a loan of ₹1 crore and had agreed to pay a sum of
₹1,65,00,000/- inclusive of interest at the rate of 22.18 % per annum in 59
monthly instalments, comprising of 58 instalments of ₹2,80,000/- each and
last instalment of ₹2,60,000/-.
38. The agreement includes an arbitration clause. The arbitrator has
considered the evidence produced by the respondent and has made the award
in terms of the agreement on the basis of the material on record. The
petitioners having elected not to participate in the arbitral proceedings,
cannot now make a grievance of the award being rendered ex parte.
39. In view of the above, this Court finds no ground to interfere with the
impugned award even on merits. As discussed above, this Court finds the
defence raised by the petitioners to be plainly dishonest and thus finds this a
fit case for imposition of costs. The petition is, accordingly, dismissed both
on account of being belated as well as on merits, with costs quantified at
₹2,00,000/-. The pending applications are also dismissed.
VIBHU BAKHRU, J
MARCH 07, 2017
RK
