TATA CAPITAL FINANCIAL SERVICES LTD Vs. SHREE INTERNATIONAL

JUDGEMENT

(1.) This petition is filed by the petitioner under Sec. 11(5) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole Arbitrator in terms of the Clause 12 viz. arbitration clause of the loan cum guarantee agreement dtd. 10/8/2020, executed between the petitioner and respondent no. 1, through its partners i.e., respondent nos. 2 and 3.

(2.) The petitioner is a non-banking finance company, incorporated under the provisions of the Companies Act, 1956. The respondent no.1 is a partnership firm, respondent no. 2 and 3 are the current partners of respondent no. 1. The respondent no. 1, through its partners, has availed various loan credit facilities from the Petitioner from time to time, for making payments to its sellers for the goods purchased during the course of its dealership business. Respondent no.1, continued taking such loan facilities from petitioner for the years 2015, 2016, 2018, 2019 and 2020, by executing separate Channel Finance Agreements each time by representing to the petitioner of its financially sound position to honor its liabilities arising out of the aforesaid loan facilities.

(3.) The respondent no. 1, through respondent no. 2 and one Mr.Laxmikant Chaudhary (now deceased) (partner at that time), in the year 2015, approached the petitioner seeking loan facility for an amount of Rs.2,00,00,000.00. Pursuant to their request, petitioner vide its sanction letter dtd. 24/8/2015, sanctioned the loan facility for the said amount as per the terms and conditions specified therein. Pursuant to the said sanctioning, the respondent no.2 and Late Mr. Laxmikant Chaudhary executed Channel Finance Agreement dtd. 24/8/2015, and certain other documents securing the repayment such as letter of guarantee, deed of hypothecation, irrevocable power of attorney etc. The respondent No. 2 and late Mr. Laxmikant Chaudhary, stood as personal guarantors for the loan facility no. 1, in their personal and individual capacity, guaranteeing its due re-payment.