Delhi High Court
M/S Indiabulls Housing Finance Ltd vs Jagdish Singh Negi And Anr on 21 May, 2025
Author: Jyoti Singh
Bench: Jyoti Singh
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 21st May, 2025
+ ARB.P. 717/2024
M/S INDIABULLS HOUSING FINANCE LTD. .....Petitioner
Through: Mr.Raghav Khanna and Mr. Sagar
Chaurasia, Advocates.
versus
JAGDISH SINGH NEGI AND ANR .....Respondents
Through: None.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J. (ORAL)
1. This petition is filed on behalf of the Petitioner under Section 11(6) of
the Arbitration and Conciliation Act, 1996 ('1996 Act') seeking
appointment of a Sole Arbitrator to adjudicate the disputes between the
parties.
2. Disputes in the present petition emanate out of a Loan Agreement
dated 25.06.2018 executed between the Petitioner and Respondents,
pursuant to which Petitioner disbursed a loan of Rs.26,06,053/- to the
Respondents for purchase of residential property bearing No. Plot No.
C-143, Second floor, Rectangle No-17, Killa No-14, Jeewan Park, Pankha
Road, New Delhi, whereunder EMIs were payable w.e.f. 10.07.2018.
Respondents, however, started defaulting in making the requisite payments
and loan was recalled. Notice was issued to the Petitioner on 13.09.2021
under Section 13(2) of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
The mortgaged property was auctioned and sold for an amount of Rs.
20,61,000/-, and Sale Certificate dated 09.02.2023 was also issued in this
regard. However, since the complete claims of the Petitioner were not
satisfied and there was an Arbitration Clause 14 in the agreement between
the parties, Petitioner issued an invocation notice dated 03.02.2024 after the
earlier arbitral proceedings commenced at the instance of the Respondents
were terminated, being in contravention of Section 12(5) of the 1996 Act in
view of the judgment of the Supreme Court in Perkins Eastman Architects
DPC and Another v. HSCC (India) Limited, (2020) 20 SCC 760.
3. Learned counsel for the Petitioner submits that the invocation notice
was sent at B-17, Lawrance Road, Industrial Area, New Delhi and Flat No.
65-I, Ground Floor, Suruchi Apartment, Plot No. 31, Sector 10, Dwarka,
New Delhi, the last known addresses of the Respondents as mentioned in the
Loan Agreement. It is urged that it is on these addresses that
communications were earlier sent by the Petitioner and received by the
Respondents, however, invocation notices came back undelivered. Petitioner
is not aware of any other address of the Respondents. It is also urged that
invocation notice was also sent by e-mail on the last known e-mail IDs of
the Respondents, but the same bounced. This, according to the counsel,
cannot be an impediment in appointing an Arbitrator inasmuch as Section 3
of 1996 Act provides that if any written communication is sent to an
addressee personally or at his place of business, habitual residence address
or mailing address but none of the said places are found after making a
reasonable enquiry, written communication is deemed to have been received
if sent to the addressee's last known place of business, habitual residence
address or mailing address by a registered letter or by any means, which
provide a record of an attempt to deliver and in support, places reliance on
the judgement of this Court in G4S Secure Solutions (India) Private
Limited v. LI Consulting Private Limited, 2021 SCC OnLine Del 4146.
4. It is further submitted that there is a clear attempt by the Respondents
to evade the delivery of invocation notice under Section 21 of 1996 Act by
moving out from the properties bearing the addresses, which were part of the
Loan Agreement as also by changing the e-mail IDs. This mala fide attempt
is further substantiated by the fact that even before this Court, Respondents
have evaded service of notices through various modes and have chosen not
to appear despite substituted service by publication in two newspapers.
5. Heard learned counsel for the Petitioner.
6. Notice was issued in this petition on 21.05.2024, returnable on
10.09.2024, on which date counsel for the Petitioner sought time to move an
application for effecting substituted service. By order dated 22.10.2024,
Court allowed I.A. 40296/2024 being an application under Order V Rule 20
of CPC, 1908 and directed the Petitioner to serve the Respondents by
publication in two newspapers, one being an English and the other in Hindi
having wide circulation in the concerned area. Order dated 16.04.2025
passed by learned Joint Registrar (Judicial) reflects that Petitioner carried
out substituted service by publication of citations in newspapers "Navbharat
Times" and "Times of India". It was recorded in the order that Respondents
did not appear despite service and accordingly, the right to file reply was
closed and matter was placed before Court.
7. The disputes inter se the parties herein emanate out of a Loan
Agreement dated 25.06.2018, which contains an Arbitration Clause 14,
which reads as follows:-
"ARTICLE 14: ARBITRATION
This Loan Documents is/ shall be governed by Indian laws and courts at
New Delhi shall have exclusive jurisdiction relating to any matter/ issue
under or pursuant to the Loan Documents. Notwithstanding anything to
the contrary. If any dispute/ disagreement/ differences ("Dispute") arise
between the Parties (including any Borrower(s)) during the subsistence of
the Loan Documents and/ or thereafter, in connection with, inter alia, the
validity, interpretation, implementation and/ or alleged breach of any
provision of the Loan Documents, jurisdiction or existence/ appointment of
the arbitrator or of any nature whatsoever, then, the Dispute shall be
referred to a sole arbitrator who shall be appointed by IHFL only. In any
circumstance, the appointment of the sole arbitrator by IHFL shall be and
shall always deemed to be the sole means of securing the appointment/
nomination of the sole arbitrator, without recourse to any other
alternative mode of appointment of the sole arbitrator. The place of
arbitration shall be New Delhi or such other place as may be notified by
IHFL and the arbitration proceedings shall be governed by Arbitration &
Conciliation Act, 1996 (or any statutory reenactment thereof, for the time
being in force) and shall be in English language. The award shall be
binding on the Parties subject to the applicable laws in force and the
award shall be enforceable in any competent court of law."
8. Disputes having arisen, Petitioner invoked the Arbitration Clause and
sent a notice dated 22.03.2024 to the Respondents proposing a list of
independent Arbitrators through registered posts on the same day at the
addresses provided by the Respondents in the Loan Agreement as also on
the last known e-mail IDs. The notices were not served as candidly admitted
by the Petitioner. In my view, learned counsel is right in his submission that
in view of Section 3 of 1996 Act, once the notices were sent through various
modes on the Respondents' last known addresses mentioned in the Loan
Agreement through Speed Post as also through electronic mode on the last
known e-mail IDs, which provide a record of an attempt to deliver, the
notice is deemed to have been received. In this context, I may refer to
passages from the judgment of this Court in G4S Secure Solutions (supra)
as follows:-
"21. It is clear from the express language of Section 3 of the A&C Act that
any written communication is deemed to have been received if it is
delivered to the addressee personally or at his place of business, habitual
residence address or mailing address. However, if none of the said places
is found after making a reasonable inquiry, written communication is
deemed to have been received if it is sent to the addressee's last known
place of business, habitual residence or mailing address by a registered
letter or by any means, which provide a record of an attempt to deliver.
22. In the present case, it is established that an attempt to deliver the
notice dated 24-9-2018 was made at the petitioner's address at 803, Ansal
Bhawan, 16 KG Marg, New Delhi 110 001.
23. Even if it is accepted that the notice was not received by the petitioner
at its registered office, it is established that an attempt to deliver was made
at the address on which the notices were agreed to be delivered by the
parties, in terms of the contract.
24. In Shabnam Gulati v. Religare Finvest (P) Ltd. [Shabnam
Gulati v. Religare Finvest (P) Ltd.2017 SCC OnLine Del 11656] , this
Court had explained the effect of Section 3 of the Act as under:
"18. Section 3(1) of the Arbitration and Conciliation Act, specifically
states that a written communication is deemed to have been received if
it is sent to the addressee's last known place of business, habitual
address or mailing address by registered letter or by any other means
which provides a record of 'attempt to deliver it'. Therefore, unlike
sub-rule (5) of Rule 9 of Order 5CPC requiring proof of
acknowledgment or any other receipt of due delivery of the summons,
or drawing of a presumption of due service only where the summons
were properly addressed but the acknowledgement was lost or misled
or for any other reason was not received by the court, under the
Arbitration and Conciliation Act sending of notice by registered letter
or by other means at last known place of business, habitual residence
or mailing address which provides the record of 'attempt to deliver
it'."
25. In view of the above, the contention that the present petition is not
maintainable for want of notice under Section 21 of the A&C Act, cannot
be accepted."
9. There is also substance in the contention that Respondents are evading
appearance even before this Court and have chosen to remain absent despite
being served through publication. Since there is an Arbitration Clause in the
Loan Agreement, whereby parties intended to refer the disputes arising out
of the Loan Agreement to a Sole Arbitrator, there is no impediment in
allowing this petition.
10. Accordingly, Coordinator, Delhi International Arbitration Centre
('DIAC') is requested to appoint a Sole Arbitrator to adjudicate the disputes
between the parties. Arbitral proceedings will be held under the aegis of
DIAC and as per its Rules. Fee of the Arbitrator shall be as per fee schedule
of DIAC (Administrative Cost & Arbitrators' Fees) Rules 2018.
11. Learned Arbitrator shall give disclosure under Section 12 of the 1996
Act before entering upon reference.
12. It is made clear that this Court has not expressed any opinion on the
merits of the case and all rights and contentions of the respective parties are
left open.
13. Petition is disposed of in the aforesaid terms.
JYOTI SINGH, J
MAY 21, 2025/shivam
