RASAL DILIP DAMODAR Vs. SREI INFRASTRUCTURE FINANCE LIMITED

JUDGEMENT

(1.) The same award obtained by a finance company has been challenged in the two petitions; the first in point of time by the guarantor and the other by the hirer. Some of the grounds urged are common. The primary challenge in both petitions is that the award is in utter derogation of the principles of natural justice. The hirer adds that the award has been rendered by a machine programmed to routinely churn out mindless awards completely in favour of this and other finance companies.

(2.) The arbitration clause found at article 46 of the agreement contemplated the reference to the sole arbitration of a named arbitrator (the name having been filled in hand). The arbitration clause gave the arbitrator summary powers and recorded that no objection shall be taken on the ground that the Arbitrator so appointed is an employee of the owner or is in any way associated with the owner The clause recorded an agreement between the parties that the arbitrator need not give reasons in award. The following sentence in article 46 appears to have escaped the attention of the challengers:

(3.) The guarantor appears to have received subsequent notice of the arbitration proceedings. The guarantor filed a written response to the statement of claim which he described as his say. Apart from denying the contents of the statement of claim, the guarantor claimed that he had furnished a collateral security in the sum of Rs.5 lakh which was to earn interest. According to the guarantor, it was only when the guarantor sought repayment of the security together with interest thereon that the finance company refused to release the same. The guarantor, in such circumstances, instituted proceedings before the Nashik District Consumer Forum in the year 2007 which allowed the claim. The parties say that an appeal from the order of the District Forum resulted in the matter being remanded. The guarantors appeal is now pending before the National Commission. The guarantor claimed in his say that the agreement was signed at Nashik and that no copy of the executed agreement had ever been issued to him prior to the appeal being filed from the order of the District Consumer Forum. The guarantor asserted that the agreement had been entered into with one Srei International Finance Ltd and the guarantor had not been informed as to the change of name of the finance company.