Kannan C.V vs M/S Mahindra & Mahindra Financial ...
2021 Latest Caselaw 19829 Mad

                                                                            CMA No.1757 of 2021

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                  DATED: 28.09.2021

                                                       CORAM:

                                   THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE

                                                 CMA No.1757 of 2021
                                               and CMP No.9335 of 2021

                     1.Kannan C.V
                     2.Mrs.Praseetha Kannan                                 .... Appellants

                                                           vs

                     M/s Mahindra & Mahindra Financial Services Ltd.,
                     New No.244, (Old No.713), 3rd Floor,
                     Level 4, Carex Centre, Rear Block Mount Road,
                     Thousand Lights, Chennai - 600 006                     ... Respondent

                               Civil Miscellaneous Appeal filed under Section 37 of the
                     Arbitration and Conciliation Act, 1996 against the order passed in
                     Interim Order dated 15.03.2021 in RR No.1 in NV20-NPA-
                     ARB(M&M):QD119/RR57/5216596 of 2020 passed by the Arbitrator
                     Mr.K.Ragavendran.

                                      For Appellants   :    Mr.J.Venkatachalam
                                      For Respondent   :    Mr.A.Prabhakaran




                     1/8


https://www.mhc.tn.gov.in/judis/
                                                                                CMA No.1757 of 2021

                                                 JUDGMENT

(Heard through Video Conference)

This appeal has been filed challenging the order dated 15.03.2021

passed by the sole Arbitrator Mr.R.Ragavendran in RR No.1 in NV20-

NPA-ARB(M&M):QD119/RR57/5216596 of 2020 passed under

Section 17 of the Arbitration and Conciliation Act, 1996, directing the

respondent to take custody of the subject vehicle from the appellant,

which is the subject matter of the loan agreement No.52116596, dated

29.01.2018.

2. Admittedly, the appellant has availed the loan under the

aforesaid agreement from the respondent for the purpose of purchasing a

vehicle, which was registered as KL49J6726, under the loan agreement

dated 29.01.2018. The appellant has to repay the loan amount of

Rs.45,57,000/-(Rupees forty five lakhs fifty seven thousand only) in 60

equal monthly instalments. The monthly instalment amount payable by

the appellant under the loan agreement is Rs.75,950/-(Rupees seventy

five thousand nine hundred fifty only).

3. According to the respondent, the appellant has defaulted in

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

repayment of the loan amount. According to them, the appellant has paid

the monthly instalments only upto June 2019 and thereafter, he has

committed default. The respondent initiated arbitration proceedings in

accordance with the arbitration clause contained in the agreement and

Mr.Ragavendran has been appointed as the sole Arbitrator.

4. By order dated 15.03.2021, on an application filed by the

respondent in RR No.1 in NV20-NPA-ARB(M&M):QD119/RR57/

5216596 of 2020, the sole Arbitrator has directed the respondent to

re-possess the vehicle from the appellant, which is the subject matter of

the loan agreement dated 29.01.2018. Aggrieved by the order dated

15.03.2021 passed by the sole Arbitrator under Section 17 of the Act of

1996, the present appeal has been filed by the appellant under Section 37

of the Act of 1996.

5. Heard Mr.J.Venkatachalam, learned counsel for the appellant

and Mr.A.Prabhakaran, learned counsel for the respondent.

6. The primary ground of challenge to the impugned award passed

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

under Section 17 of the Act of 1996 is that the sole Arbitrator has not

taken into consideration the moratorium period declared by the

Government of India with regard to collection of payments during the

Government imposed lockdown, from March 2020 to October 2020,

before passing the impugned order. According to the learned counsel for

the appellant, the appellant has paid the dues under the loan agreement

upto March 2020 and only due to the moratorium issued by the

Government of India, the appellant has stopped making payment from

March 2020 onwards. However, it is the contention of the learned

counsel for the respondent that the appellant has committed default even

from June 2019 onwards and not from March 2020, as alleged by the

learned counsel for the appellant.

7. Even though the learned counsel for the appellant submits

before this Court that the appellant has paid a sum of Rs.20,00,000/-

(Rupees Twenty lakhs only) towards repayment of the loan amount

under the loan agreement, no documentary evidence has been produced

before this Court to prove that the appellant has paid the said sum. The

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

monthly instalment amount payable under the loan agreement is

Rs.75,950/-(Rupees Seventy five thousand Nine hundred fifty only) and

the total value of the loan contract is Rs.45,57,000/-(Rupees Forty five

lakhs Fifty seven thousand only), which has to be paid in 60 equal

monthly instalments. According to the respondent, the appellant has paid

the monthly instalment only upto June 2019, and thereafter committed

default.

8. It may be true that the Government of India has granted

moratorium during the initial period of pandemic to the borrowers in

order to grant them some relief considering the lockdown. However,

even if such moratorium is applicable, it was only for a limited period,

i.e., six months. Taking advantage of the same, the appellant seems to

have committed perpetual default. Admittedly, the possession of the

vehicle, which is the subject matter of the loan agreement, is presently

with the appellant for nearly twelve months after expiry of the

moratorium period, which expired even according to the appellant in

October 2020 itself. Till date, the appellant has not surrendered the

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

vehicle to the respondent in accordance with the terms and conditions of

the loan contract, which clearly stipulates that in case of default, the

appellant has to surrender the vehicle. As seen from the materials and

documents available on record, it is clear that the appellant is a defaulter

under the loan contract entered into with the respondent. No

documentary evidence has been produced till date by the appellant to

prove that he has paid monthly instalment upto March 2020 without

default, when the moratorium period is alleged to have commenced.

9. The impugned order has been passed under Section 17 of the

Arbitration and Conciliation Act, 1996 directing the respondent to take

custody of the hypothecated vehicle from the appellant. Admittedly,

when the appellant is a defaulter under the loan contract entered into

with the respondent, the sole Arbitrator under the impugned order has

exercised his discretion judiciously by directing the respondent to re-

possess the vehicle from the appellant.

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

10. This Court does not find any infirmity in the findings given by

the sole Arbitrator under the impugned order. Accordingly, the civil

miscellaneous appeal is dismissed. No costs. Consequently, connected

miscellaneous petition is closed.

28.09.2021

Index: Yes/No sr/rgi

To

Mr.R.Ragavendran (Arbitrator) "Green Enclave", No3/7, Flat No.4, 1st Floor, Annai Parvathi Street, Thoraipakkam, Chennai - 600 097.

https://www.mhc.tn.gov.in/judis/ CMA No.1757 of 2021

ABDUL QUDDHOSE, J.

sr/rgi

CMA No.1757 of 2021

28.09.2021

https://www.mhc.tn.gov.in/judis/