Madras High Court

M/S.Pmr Software Technology Pvt. ... vs Citifinancial Consumer Finance ... on 23 February, 2021

                                                                        O.P.No.207 of 2013



                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                Dated : 23.02.2021

                                                     CORAM:

                                     THE HONOURABLE Mr.JUSTICE M.SUNDAR

                                                O.P.No.207 of 2013

                  1. M/s.PMR Software Technology Pvt. Ltd.,
                     Door No.14 Plot No.2036
                     15th Main Road, Anna Nagar West,
                     Chennai-600 040.
                  2. P.Muthuvelraj
                     S/o.Paramasiva Naidu,
                  3. Sangamitra
                     W/o.P.Muthuvelraj
                  4. P.Markkannathas
                     S/o.Paramasiva Naidu
                                                                          ... Petitioners
                                                      Vs.
                  1. Citifinancial Consumer Finance India Limited,
                     Regd. Office at;
                     3 LSC Pushp Vihar,
                     New Delhi-110 062.

                  2. The Branch Manager,
                     Citifinancial Consumer Finance India Ltd.,
                     “Citadel” 117 (New No.54)
                     Dr.Radhakrishnan Salai,
                     Mylapore, Chennai-600 004.

                  3. Shri.Rajiv Shukla
                     Sole Arbitrator,
                     B.147, L.G.F, Lajpat Nagar-1,
                     New Delhi.

                 1/8
https://www.mhc.tn.gov.in/judis/
                                                                                 O.P.No.207 of 2013



                  4. M/s.L & T Housing Finance Limited,
                     Rep. by its authorised Officer,
                     KGN Towers, 5th Floor,
                     No.62, Ethiraj Salai,
                     (Commander-in-Chief Road),
                     Egmore, Chennai-600 105.
                     (R4 impleaded as per the order dated 27.08.2020
                       made in A.No.4507/2015)
                                                                                 ... Respondents

                  Prayer: Original Petition filed under Section 34 of the Arbitration and
                  Conciliation Act, 1996, praying to set aside the award was passed by the 3rd
                  Respondent/Arbitrator on 30.11.2012 in Ref.No.2189 of 2012 and received
                  by the petitioners on 23.02.2013 determining a sum of Rs.2,68,75,773.10
                  (Rs.Two Crores Sixty Eight Lacs Seventy Five Thousand Seven hundred
                  Seventy Three and Paise Ten only) as due to the claimant/respondents 1 and
                  2 together with an interest of 18% p.a. from 24.01.2012 till date of
                  realization giving credit to intervening payments and also declared that the
                  Respondent claimant shall be entitled to realize the amounts by selling the
                  mortgaged property and also awarded a cumulative cost of Rs.9500/-; award
                  costs to the petitioners herein.

                                   For Petitioners   : Mr.Varun Srinivasan

                                   For Respondents : R1 to R3 – No appearance
                                                     Mr.D.Pradeep Kumar for R4

                                                        *****




                 2/8
https://www.mhc.tn.gov.in/judis/
                                                                                  O.P.No.207 of 2013



                                                       ORDER

Mr.Varun Srinivasan, learned counsel of N.V.S.Associates (Law Firm)

on behalf of the four petitioners and Mr.D.Pradeep Kumar, learned counsel

for contesting fourth respondent are before me.

2. This Court is informed that respondents 1 and 2 have assigned the

alleged debt to fourth respondent, in other words fourth respondent has

stepped into the shoes of respondents 1 and 2. To be noted, sole Arbitrator,

who constituted AT and made the impugned award has been arrayed as

respondent no.3. Though in the considered view of this Court, this may not

be necessary. However, as territorial jurisdiction issue has arisen and

captioned OP is being disposed of on this ground, I refrain myself from

saying anything on this issue or for that matter on anything on merits.

3. Both the learned counsel submit that the fulcrum of this lis is an

agreement captioned 'HOME EQUITY AGREEMENT' dated 16.06.2008 and

the Arbitration Agreement between the parties being Arbitration Agreement

within the meaning of Section 2(1)(b) read with Section 7 of 'The Arbitration

and Conciliation Act, 1996 (Act No.20 of 1996)' [hereinafter 'A and C Act'

for the sake of brevity] is in the form of a Clause in this Home Equity

https://www.mhc.tn.gov.in/judis/ O.P.No.207 of 2013

Agreement, that clause is clause 10.7 (h) and the same reads as follows:

'10.7 THE BORROWER AGREES/CONFIRMS AS FOLLOWS:

(a) ......

(b) ......

(c) ......

(d) ......

(e) ......

(f) ......

(g) ......

(h) In the event of any dispute or differences arising under this Agreement including any dispute as to any amount outstanding, the real meaning or purport hereof (“Dispute”), such Dispute shall be finally resolved by arbitration. Such arbitration shall be conducted in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996 or any amendment or reenactment thereof by a single arbitrator to be appointed by the Lender. The venue of arbitration shall be at New Delhi and the arbitration shall be conducted in English language.'

4. A perusal of the impugned award i.e., Arbitral Award dated

30.11.2012 made by the sole Arbitrator reveals that the arbitral proceedings

were held in New Delhi.

https://www.mhc.tn.gov.in/judis/ O.P.No.207 of 2013

5. To be noted, captioned OP is an application under Section 34 of A

and C Act assailing the impugned award. In this view of the matter, the BGS

SGS Soma principle, which is to the effect that the juridical seat becomes

exclusive jurisdiction qua Supervisory Court assumes significance. To be

noted, in Engineering Projects India Ltd., Vs. Balaji Projects reported in

MANU/TN/0392/2021 relevant paragraph is 24 and the same reads as

follows:

'24. In BGS SGS Soma, Hon-ble Supreme Court after survey of various prior judgments, concluded that whenever there is designation of place of arbitration in an arbitration clause as being 'venue' of arbitration proceedings, the expression 'arbitration proceedings' would make it clear that 'venue' is really 'seat' of arbitration proceedings. Relevant paragraph in BGS SGS Soma is paragraph 82 and the same reads as follows:

'82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the “venue” of the arbitration proceedings, the expression “arbitration proceedings” would make it clear that the “venue” is really the “seat” of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as “tribunals are to meet or have witnesses, experts or the parties” where only hearings are to take place in the “venue”, which may lead to the conclusion, other things being equal, that the venue so stated is not the “seat” of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings “shall be held” at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular

https://www.mhc.tn.gov.in/judis/ O.P.No.207 of 2013

place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a “venue” and not the “seat” of the arbitral proceedings, would then conclusively show that such a clause designates a “seat” of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that “the venue”, so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the “stated venue”, which then becomes the “seat” for the purposes of arbitration.'

6. There is no disputation or disagreement before me about the

aforementioned obtaining legal position.

7. It is brought to my notice that the records of the Arbitral Tribunal

pertaining to the impugned award, which were requisitioned are also before

me as part of the case file.

8. It is open to the petitioners to present captioned OP in the

jurisdictional Supervisory Court in New Delhi. Though obvious, it is open to

the petitioners to seek benefit under Section 14 of The Limitation Act, 1963

(Act No.36 of 1963) but all that would be in the domain and discretion of

jurisdictional Supervisory Court as it would not be proper for this Court to

say anything even on this aspect of the matter owing to lack of territorial

jurisdiction.