HMG INDUSTRIES LTD. Vs. CANARA BANK

JUDGEMENT

(1.) This is an application filed under Sec. 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of a Sole Arbitrator to adjudicate upon disputes between the applicant and the respondent. The applicant is a public limited company. The respondent is a nationalized bank.

(2.) It is the case of the applicant that vide a Debenture Trust Deed dtd. 25/7/1995 between the parties, the respondent-bank was appointed as a Debenture Trustee. Later, in the year 2006, an Amended Scheme of Compromise between the applicant and the secured creditors, including debenture-holders, unsecured creditors, equity shareholders, preference shareholders and workers was sanctioned by this court. According to the applicant, the scheme does not contemplate the respondent-bank continuing as a trustee. The respondent-bank has since raised demand on the applicant in a sum of Rs.1,22,46,357.00 towards its fees and has sought to take legal action against the applicant. It is at this stage that the applicant has invoked clause 5 of the Amended Scheme of Compromise and called upon the respondent-bank to pay to the applicant a sum of Rs.2,75,00,000.00 being alleged loss suffered by the applicant due to retention of original title deeds by the respondent-bank. Thus, the applicant is before this court seeking appointment of a Sole Arbitrator.

(3.) The respondent-bank has opposed the application. According to the respondent, there is no arbitration agreement between the parties and hence the application is not competent. The matter has been pending since last four years. For various reasons, it is seen to have been adjourned from time to time mainly at the instance of the parties ' Advocates. Eventually, on 6/6/2022, both sides stated that they have filed written submissions and they did not wish to make oral submissions. Accordingly, the matter has been taken up today.