B. KANNAN Vs. JAYAMMAL

JUDGEMENT

(1.) The above appeal is filed by the claimant challenging the order passed by the Principal District Judge, Namakkal in Ar.O.P.No.57 of 2019.

(2.) The case of the claimant was that one R.Muthusamy had borrowed a sum of Rs.1,50,000/- from him and had executed a promissory note which contains an Arbitration clause. Under the promissory note, the said Muthusamy had undertaken to repay the same together with interest at 18% per annum. Therefore, according to the claimant, Muthusamy was required to pay a sum of Rs.2,250/- towards interest every month. Since the said Muthusamy had passed away on 20.02.2017, the claimant had issued a notice of demand to the legal representatives of the said Muthusamy calling upon them to pay a sum of Rs.1,54,500/- which was the principal, together with interest. The respondents on receiving the said notice had sent a reply denying the very execution of the promissory note and also contending that the alleged agreement cannot bind the legal representatives. In the reply notice, they had also requested for copies of the documents. However, without sending a copy of the documents, the respondent had issued another notice dated 20.05.2017, appointing an arbitrator and calling upon the respondents to pay a sum of Rs. 1,64,500/-. The respondents vide their legal notice dated 31.05.2017 had not consented to the Arbitrator appointed by the claimant/appellant, since they have disputed the very arbitration agreement. The arbitrator so appointed had recused himself vide his letter dated 21.06.2017. The applicant thereafter proceeded to appoint another arbitrator. Once again the respondent on receiving the said notice had challenged the said appointment on the ground that there was no arbitration agreement between the parties and also highlighted the fact that the documents as sought for by the respondents in their reply notice dated 09.05.2017 had not been served on them. They had also not consented for the appointment of the Arbitrator.

(3.) Despite the objection, it appears that the arbitrator had entered reference and issued notice to the respondents. Immediately on entering appearance, the respondent had taken out a petition under Sections 12 and 13 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act') stating that the petitioner has apprehension about the impartiality of the Arbitrator and called upon him to stop further proceedings in the matter. The respondent had also questioned the unilateral appointment of the Arbitrator, particularly when the same has been done despite the respondent not having given their consent. The respondent had also contended that the mandatory disclosure as provided under the Act has not been made by the Arbitrator. However, without considering the application under Sections 12 and 13 of the Act, the Arbitrator has proceeded to pass an Award in the main claim itself.