SANJEEV NARULA Vs. TATA CAPITAL FINANCIAL SERVICES LTD

JUDGEMENT

(1.) The appellant is aggrieved by a judgment dated 10.01.2017 of a learned Single Judge rejecting his objection to the maintainability of execution proceedings filed by the Respondent, Tata Capital Financial Services Limited (hereinafter, also referred to as "Tata Capital") for the enforcement of an arbitral award.

(2.) The facts of the case briefly, that Tata Capital sanctioned a term loan to Lilliput Kidswear Ltd. ("Lilliput", together with Mr. Narula referred to as the "Appellants") for a tenure of 48 months together with interest and other terms set out in the sanction letter dated 28th July 2011. Sanjeev Narula was a Director of Lilliput at the relevant time. He acted as guarantor and signed a deed of personal guarantee on 28th July 2011 in his personal capacity to secure the loan. The guarantee was furnished in favour of Tata Capital, irrevocably, unconditionally and personally, guaranteeing repayment of all the amounts due and payable by Lilliput under the term loan agreement. As guarantor, Mr. Narula created equitable mortgage of built-up immovable property admeasuring 586.44 sq yards at 94, Block-D, Okhla Industrial Estate, Phase-1, New Delhi (herein, also referred to as the "described property") in favour of Tata Capital by depositing the original title deeds. A Memorandum of Entry dated 13th October, 2011 recorded this. Due to non-payment of the outstanding dues, despite repeated reminders, to both Lilliput and Mr. Narula, Tata Capital filed Arbitration Petition No. 782 of 2012 in the High Court of Bombay, under Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act") against both Lilliput and Mr. Narula.

(3.) The parties later sought to resolve their disputes on mutually agreed consent terms dated 8th February 2013 in the said proceedings in the Bombay High Court. In the meanwhile, a sole Arbitrator had already been appointed by the parties. The Bombay High Court in Arb. P. No. 782/ 2012 passed an order dated 8th February 2013 recording that the consent terms had been tendered. They were taken on record and the said petition was disposed of in its terms. On 28th February 2013, the parties appeared before the sole Arbitrator and he passed the following consent Award: