MARS CONSTRUCTIONS BANGALORE Vs. KARNATAKA BANK LIMITED BANGALORE

JUDGEMENT

(1.) THE appellant's learned Advocate points out that appellants 2 and 4 are THE l.rs. Of deceased appellant 3 and that THEy are already on record. It is, THErefore, unnecessary to take any furTHEr steps. La. Ii to stand disposed of.

(2.) THE point involved in this appeal is one of someconsequence. The brief facts which are undisputed indicate that THE appellants had availed of certain overdraft facilities from THE respondent-bank for a substantial sum of money aggregating to about Rs. 15 lakhs. NeiTHEr THE loan amount nor THE interest was paid whereupon, THE bank decided to refer THE matter to arbitration. Obviously, in order to provide for an expeditious forum for THE recovery of such outstandings, THE bank had entered into an agreement with THE appellants in October 1991 whereunder it was provided for that in THE event of a dispute/difference, that THE matter may be referred to arbitration. On THE bank following this course of action, THE respondents to THE arbitration proceedings filed a suit before THE trial court contending that THE proceedings were without jurisdiction, THE main ground being that THEre is no dispute in existence. They contended that THE bank and THEmselves are not at loggerheads in respect of anything and that it was because of financial stringency and a number of factors that had contributed to THEir inability to repay THE loan that THEy were in default. The contention was that only in THE event of a dispute arising, that THE matter was to be referred to an arbitrator for resolution of that dispute and in THE absence THEreof, that THE entire arbitration proceedings were uncalled for and were without jurisdiction.

(3.) THE main argument advanced by THE appellants' learned Advocate is that THE facts of this case will indicate that THEre is no dispute between THE parties. She has submitted that even in response to THE notice of demand received from THE bank, that her clients have only demonstrated THEir inability to pay, THEy have not disputed THE fact that THE amount was advanced to THEm, THEir liability to repay THEm, etc. And that THErefore, THEre is nothing that falls for adjudication before THE learned arbitrator. According to THE learned advocate, it is necessary to construe clause 1 to THE arbitration agreement which reads as follows: