MADAN KUMAR S.M. Vs. KARNATAKA BANK LIMITED

JUDGEMENT

(1.) In the captioned petition, petitioner is questioning the action of respondent No.1/Bank in freezing the petitioner's saving account bearing A/c No.5832500100615101.

(2.) The factual matrix leading to the present petition, in brief, is that respondent No.2, invoking an alleged arbitration clause embedded in the loan transaction, proceeded to initiate online arbitral proceedings, which came to be registered as Arbitration Case ID No.A088277, without securing the consent or participation of the petitioner. It is the specific case of the petitioner that the very initiation of arbitral process is unilateral, lacking in foundational compliance with the mandate of law governing constitution of an Arbitral Tribunal. The learned Sole Arbitrator, upon entering reference, proceeded to pass an interim order directing the petitioner to furnish security to the tune of Rs.7,12,139.00, and in default thereof, permitted coercive action by directing the respondent-bank to freeze the petitioner's account. The proceedings culminated in a final arbitral award of even date, fastening liability on the petitioner to pay the aforesaid sum.

(3.) The gist of the petitioner's grievance is that the entire arbitral process was conducted behind her back, without affording any real or effective opportunity of participation, and more importantly, without a valid constitution of the Arbitral Tribunal in the eye of law. It is contended that the petitioner was merely intimated by way of an email enclosing the interim order and a consequential request addressed to the bank for debit freezing of her account, thereby subjecting her to drastic civil consequences without adherence to due process.