Delhi High Court
Religare Finvest Limited vs Skil Infrastructure Limited & Ors. on 24 July, 2024
Author: C.Hari Shankar
Bench: C.Hari Shankar
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 224/2024 & I.A. 10338/2024, I.A. 32413/2024
RELIGARE FINVEST LIMITED .....Petitioner
Through: Ms. Mudrakshi, Advocate.
versus
SKIL INFRASTRUCTURE LIMITED & ORS .....Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT (ORAL)
% 24.07.2024
1. This is a petition under Section 11 (6) of the Arbitration and
Conciliation Act, 1996, seeking intervention of the Court to appoint an
Arbitrator to arbitrate on the disputes between the petitioner and the
respondents.
2. During the course of these proceedings, Corporate Insolvency
Resolution Process (CIRP) was initiated against Respondent 1 and a
moratorium has been put in place by the National Company Law
Tribunal, Bombay by order dated 1 February 2024.
3. In that view of the matter, the petitioner has moved IA
32413/2024 under Order I Rule 10 of the Code of Civil Procedure,
1908 (CPC) for deletion of Respondent 1 from the array of parties.
4. Accordingly, IA 32413/2024, seeking deletion of Respondent 1
from the array of parties, is allowed.
Digitally Signed By:AJIT Digitally Signed
KUMAR ARB.P. 224/2024 Page 1 of 5 By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:25.07.2024 Signing Date:25.07.2024
15:17:18 15:14:49
5. Ms. Mudrakshi, learned counsel for the petitioner, submits that,
in terms of paras 4 and 5 of the judgment of the Supreme Court in
Alchemist Asset Reconstruction Co Ltd v. Hotel Gaudavan Pvt Ltd1,
the institution or continuation of legal proceedings against a corporate
debtor immediately ceases on a moratorium under Section 14(1)(a) of
the Insolvency and Bankruptcy Code, 2016 coming into effect. In
these circumstances, Ms. Mudrakshi, learned counsel submits that her
client does not intend to institute arbitral proceedings against
Respondent 1, vis-a-vis whom her client would avail appropriate
remedies as are available in the law.
6. She, therefore, restricts this petition to appointment of an
arbitrator to arbitrate on the disputes between the petitioner and
Respondents 2 to 5.
7. Ms. Mudrakshi points out that Respondents 2 to 5 are
guarantors against the loan which was advanced by the petitioner to
Respondent 1. She submits that there are independent Deeds of
Security between the petitioner and each of the said respondents.
These Deeds of Security have been placed on record. Ms. Mudrakshi
has taken me to one such Deed of Security, which contains the
following clause, envisaging resolution of disputes between the parties
by arbitration:
"27. All disputes under this Deed shall be settled by arbitration
in accordance with the provisions of the Indian Arbitration and
Conciliation Act, 1996. There shall be a sole arbitrator to be
appointed by RFL and the award thereupon shall be binding upon
1 (2018) 16 SCC 94
Digitally Signed By:AJIT Digitally Signed
KUMAR ARB.P. 224/2024 Page 2 of 5 By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:25.07.2024 Signing Date:25.07.2024
15:17:18 15:14:49
the Security Provider and RFL. The arbitration shall be held at
such place as may be decided by RFL. Laws of India shall apply
exclusively."
8. Though Clause 27 contemplates arbitration by a Sole Arbitrator
to be appointed by the petitioner, the Clause is obviously unworkable
in view of the law laid down by the Supreme Court in Perkins
Eastman Architects DPC v. HSCC (India) Ltd2.
9. In these circumstances, the petitioner addressed a joint notice
under Section 21 of the 1996 Act to all the respondents, calling on
them to liquidate the loans provided by the petitioner, failing which
arbitral proceedings would be initiated.
10. None of the respondents have condescended to respond the
notice, resulting in the filing of the present petition before the Court
by the petitioner.
11. Though Respondents 2 to 5 have been duly served by speed
post, courier and email, they have not appeared when the matter has
been called out. It is seen that they were also not entering appearance
before the learned Joint Registrar.
12. The existence of the arbitration clause in the Deeds of Security
between the petitioner and each of the Respondents 2 to 5 cannot be
disputed. The dispute between the petitioner and the said respondents
is prima facie arbitrable. Even otherwise, given the position of law as
2 (2020) 20 SCC 760
Digitally Signed By:AJIT Digitally Signed
KUMAR ARB.P. 224/2024 Page 3 of 5 By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:25.07.2024 Signing Date:25.07.2024
15:17:18 15:14:49
recently enunciated in SBI General Insurance Co Ltd v. Krish
Spinning3 this Court, exercising jurisdiction under Section 11(6) of
the 1996 Act, is only required to satisfy itself regarding the existence
of a valid arbitration clause and that the respondents are party to the
said clause. Other issues have ideally to be decided by the Arbitral
Tribunal.
13. The liabilities of Respondents 2 to 5 being joint and several and
relatable to a common amount loaned by the petitioner to Respondent
1, the interests of justice would be facilitated if one arbitral Tribunal is
appointed to deal with the disputes between the petitioner and all the
Respondents 2 to 5.
14. As such, this court appoints Mr. Aniruddh Sharma, Advocate
(Cell: 9999080715) as the Arbitrator to arbitrate on the disputes
between the petitioner and Respondents 2 to 5. The learned Arbitrator
shall be entitled to charge fees in accordance with the Fourth Schedule
to the 1996 Act. The learned Arbitrator is also requested to file the
requisite disclosure under Section 12(2) of the 1996 Act within a week
of entering on the reference.
15. This petition stands disposed of in the aforesaid terms.
16. This application seeks permission to effect substituted service
on Respondents 2 to 5. As Respondents 2 to 5 have not turned up
3 2024 SCC OnLine SC 1754 Signature Not Verified
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KUMAR ARB.P. 224/2024 Page 4 of 5 By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:25.07.2024 Signing Date:25.07.2024
15:17:18 15:14:49
despite having been duly served by speed post, courier, and email, I do
not see any necessity to effect substituted service on them.
17. Accordingly, the application is disposed of.
C.HARI SHANKAR, J
JULY 24, 2024
mk
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Digitally Signed By:AJIT Digitally Signed
KUMAR ARB.P. 224/2024 Page 5 of 5 By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:25.07.2024 Signing Date:25.07.2024
15:17:18 15:14:49
