[Cites 3, Cited by 0]
Rajasthan High Court - Jodhpur
M/S Sundaram Finance Limited vs M/S National Construction Company ... on 3 February, 2026
Author: Yogendra Kumar Purohit
Bench: Yogendra Kumar Purohit
[2026:RJ-JD:6137-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Misc. Appeal No. 871/2024
M/s Sundaram Finance Limited, having its Registered Office At
21 Patullos Road Chennai India And Branch Office At 201 Second
Floor Plot No 637/B Residency Road Bhansali Tower, Near
Manidhari Hospital, Jodhpur Through Its Authorized Signatory
Mr. Jitendra Mertiya So Shri Premaram Mertiya Aged About 35
Years R/o Behind Anand Cinema Sojati Gate Jodhpur, Rajasthan.
----Appellant
Versus
1. M/s National Construction Company, Represented By Its
Partner Mr Khimji Bhai Harji Patel, Address Harsh Plaza
1St Floor Opposite Mandvi Octroi Naka Bhuj District
Kachchh Gujarat.
2. Mr. Khimji Bhai Harji Patel, S/o Mr. Harji Devraj Patel
Address 13 Didhamedar Colony Bhuj Dist Kachchh
Gujarat.
3. Mr Bhikhalal Harji Patel S/o Harji Valji, (Since deceased)
through its legal representatives:-
3/1. Nilesh Bhai Bhikhalal Patel S/o Late Shri Bhikhalal Harji
Patel,
3/2. Dhansukh Bhai Bhikhalal Patel S/o Late Shri Bhikhalal
Harji Patel, Both resident of Mirzapur Tehsil- Bhuj Dist
Kachchh Gujarat
----Respondents
For Appellant(s) : Mr. S. Mukunth Sr. Adv. Asst.
Mr. Jitendra Mertiya (in person)
Mr. Sanjay Gupta
For Respondent(s) :
HON'BLE MR. JUSTICE ARUN MONGA
HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
Order (Oral)
03/02/2026
Per : Arun Monga, J.
1. The appellant is before this Court, being aggrieved by the
order dated 03.01.2024 passed by the learned Commercial Court,
Udaipur, whereby the execution petition filed by the appellant
seeking enforcement of the arbitral award dated 24.03.2016 was
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dismissed, inter alia, on the ground that the appointment of the
arbitrator, being unilateral, was hit by Section 12(5) of the
Arbitration and Conciliation Act, 1996 (as amended).
2. Brief facts of the case are that the respondents approached
the appellant for a vehicle loan. Under a Loan Agreement No.
H028000345 dated 13.03.2013 the loan was sanctioned. The
agreement contained an arbitration clause authorizing the
Managing Director of the appellant to appoint a sole arbitrator. The
respondents committed default from the second instalment
onwards, resulting in termination of the agreement and
acceleration of the entire outstanding dues. Despite issuance of a
legal demand notice dated 30.10.2013, the respondents failed to
clear the outstanding amount or surrender the hypothecated
vehicle, whereupon the Managing Director appointed a sole
arbitrator on 23.12.2013.
2.1. The appellant thereafter filed a claim before the Sole
Arbitrator for recovery of Rs. 31,31,634/- along with interest. The
respondents, despite due service of notices, failed to appear and
were proceeded ex parte. An arbitral award dated 24.03.2016 was
passed in favour of the appellant.
2.2. No challenge under Section 34 of the Arbitration and
Conciliation Act, 1996 was preferred by the respondents.
Consequently, the appellant filed an execution application before
the Commercial Court, Udaipur, asserting territorial and pecuniary
jurisdiction.
2.3. However, the execution application was dismissed by order
dated 03.01.2024 on the ground that the arbitral award was non-
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[2026:RJ-JD:6137-DB] (3 of 4) [CMA-871/2024]
executable, as the arbitrator had been appointed unilaterally by
the appellant.
3. Heard the learned Senior Counsel who would argue on the
lines of grounds taken in the appeal and perused the case file.
4. At the very threshold, a query was posed by the Court to the
learned Senior Counsel as to how the Court at Udaipur has got the
territorial jurisdiction since the arbitration proceedings were
conducted at Madras, the arbitral award was rendered at Madras,
the respondents are admittedly based at Bhuj in the State of
Gujarat, and even the delivery of the vehicle financed under the
loan agreement had taken place at Bhuj.
5. On all counts, therefore, it prima facie transpires that the
Commercial Court at Udaipur lacks territorial jurisdiction to
entertain the execution petition.
6. Learned Senior Counsel, having addressed arguments on
merits for some time, submits that in case this Court is inclined to
set aside the impugned order for lack of territorial jurisdiction then
liberty be granted to the appellant company to institute the
execution proceedings in accordance with law before the Court of
appropriate jurisdiction.
7. In the premise, since we are of the considered view that the
execution petition filed before the Commercial Court at Udaipur
was not maintainable for want of territorial jurisdiction, the
impugned order dated 03.01.2024 is set aside. To that extent, the
appeal is partly allowed, with liberty to the appellant to refile the
execution petition before the Court of competent territorial
jurisdiction.
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8. In parting, we may also hasten to add that though the
impugned order has been set aside on the ground of lack of
territorial jurisdiction, however, prima facie, it appears that in view
of the judgment of Hon'ble the Supreme Court in Perkins
Eastman Architects DPC & Anr. v. HSCC (India) Ltd. 1, the
unilateral appointment of the arbitrator seems to be
impermissible in present case.
9. Be that as it may, the said issue is left open to be
adjudicated, should the objection be taken. As far as the
impugned order is concerned, the same having been set aside on
the ground of lack of territorial jurisdiction, any opinion or finding
rendered therein shall not bind either of the parties.
(YOGENDRA KUMAR PUROHIT),J (ARUN MONGA),J
35-suraj/-
1 (2020) 20 SCC 760
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