SUNDARAM FINANCE LTD Vs. P SAKTHIVEL

JUDGEMENT

(1.) M/S.Sundaram Finance Ltd., is the Revision petitioner herein. It had entered into a loan agreement with the first respondent herein on 07.10.2014. A vehicle was hypothecated in favour of the Revision petitioner as the first charge. The second respondent herein is the guarantor. The loan amount of Rs. 7,38,224/- was repayable in 47 monthly installments. The first respondent, however, committed default. As a result, the hypothecated vehicle was seized on 30.08.2016 and sold. Even after the appropriation of the sale proceeds, the amount due under the contract was Rs. 2,37,932/-. Since the first respondent did not pay the same despite demand, arbitration proceedings were initiated as per Article 22 of the loan agreement. A Claim statement was filed on 19.04.2017 before Sri.V.K.Thirunavukkarasu, a retired District Judge, who was nominated as the Sole Arbitrator to adjudicate the dispute/claim between the parties.

(2.) The Sole Arbitrator passed an interim order dated 26.07.2017 under Section 17 of the Arbitration and Conciliation Act, 1996, attaching the property of the respondents as they failed to furnish security as ordered by the Arbitral Tribunal on 31.05.2017. A copy of the said order was communicated by the Arbitrator to the learned Principal District Judge, Karur District, for enforcement. The interim order passed by him was also enclosed.

(3.) After the receipt of the aforesaid order from the Arbitrator, the learned Principal District Judge, Karur, by communication bearing D.No.3038 dated 06.09.2017, informed him that an Arbitrator is not competent to pass an order of attachment of properties which are not the subject matter of the arbitration. The relevant paragraphs of the said communication read as under:-