KOTAK MAHINDRA BANK Vs. S NAGABHUSHAN & ORS

JUDGEMENT

(1.) This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner challenging the Arbitral Award dated 07. 04. 2017 passed by the Sole Arbitrator in Case no. ARB/DKS/34/2016 titled M/s. Kotak Mahindra Bank v. S. Nagabhushan & Ors. (hereinafter referred to as the 'Impugned Award'). The Impugned Award holds that as the petitioner was not a signatory to the Loan Agreement executed between the respondent nos. 1 and 2 on the one hand and respondent no. 3 on the other, the reference of the disputes to arbitration by the petitioner was not maintainable and the Sole Arbitrator does not have jurisdiction to adjudicate the disputes.

(2.) The case of the petitioner, in short, is that the respondent nos. 1 and 2 had approached respondent no. 3 Citifinancial Consumer Finance India Limited for obtaining a housing loan for purchase of an immovable property being site no. 76, Cascading Meadows 2 Khata No. 119/4, Marangondanahalli Village, Bidra Halli Hobli, Banglore- 560036. Respondent No. 3 sanctioned a loan of Rs. 47. 90 lakhs to the respondent nos. 1 and 2 and accordingly Loan Agreement dated 31. 05. 2007 was executed between the respondent nos. 1 and 2 on one hand and respondent no. 3 on the other. Some of the relevant terms of the loan agreement are reproduced herein under:-

(3.) The respondent nos. 1 and 2 also created an equitable mortgage of their above mentioned property in favour of the respondent no. 3, as well as executed Deed of Declaration and Deed of Undertaking in this regard.