CATERPILLAR FINANCIAL SERVICES INDIA PRIVATE LIMITED Vs. TIPPANNA

JUDGEMENT

(1.) This Civil Miscellaneous Petition is filed under Sec. 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator to resolve the dispute and difference between the parties herein in terms of Clause 21 of the Loan & Security Agreement dtd. 12/6/2020 at Annexure-B.

(2.) Learned counsel for the petitioner submits that the petitioner is a company incorporated under the Companies Act, 1956, and is engaged in the business of financing products primarily manufactured by Caterpillar Inc. or its Affiliates, throughout India. The respondent No.1 in the capacity of borrower and the respondent No.2 in the capacity of guarantor entered into a Loan & Security Agreement "LSA" bearing No.808-70000482 dtd. 12/6/2020, under which the respondents have availed a loan amount of Rs.22,60,000.00 from the petitioner company. The loan was to be repaid in 48 EMIs at the rate of Rs.59,815.00 per month commencing from 5/8/2020 and ending on 5/6/2024.

(3.) The respondents have grossly neglected and failed to pay the EMIs and therefore violated the terms of the LSA. The petitioner was issued a demand notice dtd. 15/6/2021 seeking repayment of the outstanding dues. However, since the respondents did not respond, the petitioner terminated the loan agreement recalling the entire loan amount including the future EMIs and issued a Demand cum Termination Notice dtd. 15/6/2021 seeking repayment of Rs.21,83,744.00 calculated as on 12/6/2021. The respondents have not complied with the demand notice. Consequently, the petitioner issued a notice dtd. 13/7/2021 at Annexure-D invoking the arbitration clause contained in the Loan and Security Agreement. When the respondents did not respond for appointment of a sole arbitrator in terms of the arbitration clause, this Civil Miscellaneous Petition has been filed.