DIGITAL ILLUSION INDIA PVT LTD REPRESENTED BY ITS MANAGING DIRECTOR Vs. SHRIRAM CITY UNION FINANCE LIMITED REPRESENTED BY ITS AUTHORIZED SIGNATORY

JUDGEMENT

(1.) By consent, this appeal is taken up for final disposal. The respondents in the Arbitration Award dated 25.01.2017 and the petitioners in O.P.No.380 of 2017, are the appellants herein.

(2.) The 1st respondent has filed the claim petition in Arbitration Case No.94 of 2015, before the 2nd respondent under Section 23 of the Arbitration and Conciliation Act 1996 [in short "Arbitration Act"] stating among other things that the appellant/1st respondent therein had approached with a request to extend the financial facility to the tune of Rs. 3,00,00,000/- and it was favourably considered and the loan amount was sanctioned in their favour and they also accepted the terms and conditions and entered into a Loan Agreement dated 24.11.2011. The respondents 2 and 3 in the claim petition, joined as co-borrowers guaranteeing the due performance of the obligations under the Contract.

(3.) In terms of the said loan agreement, the loan amount of Rs. 3,00,00,000/- was disbursed in favour of the 1st respondent/appellant herein and as per the terms and conditions of the the Agreement executed, 1st respondent/appellant herein was liable to repay the same with monthly interest of Rs. 5,25,000/- on or before 25.01.2012, and the first monthly interest amount of Rs. 5,25,000/- is to be paid on or before 25.12.2011 and repay the principle amount along with interest for the second month of Rs. 5,25,000/-, aggregating to the sum of Rs. 3,05,25,000/- on or before 25.01.2012. The agreement further contemplates that in the event of delay in repayment of the loan or any other amount due to pay, the borrower has to pay interest at the rate of 24% per month from the date of Agreement till the date of payment of such amount due. According to the 1st respondent herein/ petitioner in the claim petition, the appellant herein had paid 1st monthly interest at the rate of Rs. 5,25,000/- on 25.12.2011 and paid the second monthly interest on 25.01.2012 and subsequently, defaulted in payment of Principal sum of Rs. 3,00,00,000/- and as on 21.09.2015, they are liable to pay 6,58,10,650/-. In terms of Section 11 of the Loan Agreement, the 1st respondent herein has invoked the Arbitration Clause and he has sent a communication to the Arbitrator, who in turn sent a notice to the Claimants.