INDUSIND BANK LTD Vs. RAM LAXMAN HOTELS LTD

JUDGEMENT

(1.) THE question for consideration is whether, a third party, who was not a party to the arbitration agreement or the arbitration proceedings, can file a petition under Section 34 of the Arbitration Act, 1996 with respect to an arbitral award on the ground of the same affecting the said third party.

(2.) THE petitioner bank is averred to have granted credit facilities etc to the respondent No. 1 company. Upon default by the respondent No. 1 company, the petitioner bank initiated proceedings before the DRT, Mumbai, subsequently transferred to DRT, Pune. The said proceedings are informed to have culminated with an order in favour of the petitioner and Recovery Certificate averred to have been issued against the respondent No. 1 company. OMP. No. 370/2002 Page 1 of 5

(3.) IT is the case of the petitioner that the respondent No. 1 company, with a view to delay the recovery proceedings entered into an agreement with respondent No. 2 NRI Lead Bank alleged to be carrying on business in banking services without authority of the Reserve Bank of India. Respondent No. 1 company vide the said agreement is stated to have assigned its just and legal dues in favour of the respondent No. 2, in the contention of the petitioner, illegally. It is further the case of the petitioner that collusive arbitration proceedings were commenced between the respondent No. 1 company and the said respondent No. 2 before ADR Arbitral Tribunal, Consortium Plaza, 8-J, Gopala tower, 25 Rajendra Place, New Delhi which has been impleaded as the respondent no. 3. The said arbitral tribunal is stated to have made an interim award dated 26th July, 2002 with respect to the immovable property of the respondent No. 1 company, directing restoration of status quo ante as on 14th May, 2001 with respect thereto. The respondents No. 1 and 2 on the basis of the said interim award are stated to be making applications by way of impediment to the proceedings before the DRT, Pune and/or its recovery officer. The petitioner in the circumstances preferred the present petition for setting aside of the said interim award of ADR Arbitral Tribunal.