Delhi High Court
M/S Paisalo Digital Ltd vs M/S Jay Polychem (India) Ltd & Ors on 1 August, 2018
$~41
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) (COMM) 164/2018
Date of decision: 1st August, 2018
M/S PAISALO DIGITAL LTD .... Appellant
Through Mr. P. Nagesh, Advocate.
Versus
M/S JAY POLYCHEM (INDIA) LTD & ORS ..... Respondent
Through
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE CHANDER SHEKHAR
SANJIV KHANNA, J. (ORAL)
M/s. Paisalo Digital Ltd., formerly known as S.E. Investments
Ltd., has filed the present intra-Court appeal under Section 37 of the
Arbitration and Conciliation Act, 1996 (A & C Act, for short) read with
Section 13 of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015.
2. Impugned order dated 7th May, 2018 dismisses the objections filed by
appellant under Section 34 of the A & C Act, challenging the award
dated 31st July, 2015 passed by the sole Arbitrator Mr. Justice S.B. Sinha,
former Judge of the Supreme Court of India.
3. Appellant a non-banking financial company engaged in the business
of lending money on interest had entered into five loan agreements, all
dated 29th August, 2011 with M/s. Jay Polychem (India) Ltd ("respondent
company"). M/s Jay Tel Mobile Private Limited, Sandeep Singh Madhok
and Satinder Singh Madhok, Respondent Nos. 2 to 4 in the present
appeal stood as guarantors.
4. Appellant had claimed that they had granted loan/finance of
Rs.20,00,00,000/- to be repaid in twenty-four monthly installments
commencing from 30.08.2011 at flat rate of 10.75%, equivalent to
annualised rate of 23.59% on reducing balance.
5. However the actual amount disbursed was Rs. 6,00,00,000/- on
30.08.2011 and 12,56,44,000/- i.e. Rs. 18,56,44,000/-. Rs. 1,21,50,000/-
and Rs. 22,06,000/- were deducted at the time of disbursal itself on
account of first monthly instalment and processing charge respectively.
Further, the borrower i.e. the first respondent company had remitted
Rs.5,00,00,000/- by RTGS to the appellant statedly as cash collateral,
which was to carry interest at the rate of 9% per annum.
6. Arbitral Tribunal examined the loan agreements and the factual
matrix that had emerged. Considering the material and evidence on
record the Arbitral Tribunal upheld the plea of the respondents that the
actual sum given as loan was Rs.15,00,00,000/- and amount of
Rs.5,00,00,000/- remitted to the appellant on 30.08.2011 purportedly as
cash collateral should be treated as repayment of loan and adjusted from
the amount disbursed. Thus the appellant had advanced loan of
Rs.15,00,00,000/- and not Rs.20,00,00,000/-.
7. In our opinion, learned single Judge vide impugned order had rightly
refused to interfere with the award and the findings recorded therein in
view of the limited scope and jurisdiction of the Court of reappraisal on
merits. The Award is detailed and elaborately refers to the documentary
material and oral evidence to opine on the said aspect of the dispute. The
decision of the Arbitral Tribunal on the question and issue was just, fair
and reasonable. It does not warrant interference and modification in
exercise of power of judicial scrutiny under Section 34/37 of the A & C
Act.
8. Issue had also arisen on the rate of interest and levy a late fee charge
of Rs.2/- per thousand per day enhanced to Rs.6/- per thousand per day.
Arbitral Tribunal had awarded pendente lite interest @ 15%. Learned
Single Judge has modified the award directing that pendente lite interest
would be payable @ 23.59% per annum. We are not required to examine
and consider the said modification in the present appeal.
9. No other argument and issue is raised.
10. Recording the aforesaid position, we dismiss the appeal without any
order as to costs.
SANJIV KHANNA, J.
CHANDER SHEKHAR, J.
AUGUST 01, 2018
NA
