1 2025:CGHC:25612 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WP227 No. 634 of 2021 1. Majda Khan W/o Hasim Khan, Aged About 40 Years R/o Ward No. 11 Manpur, P.S. Tahsil And District Surajpur Chhattisgarh, District : Surajpur, Chhattisgarh 2. Hasim Khan S/o Ali Mohammad, Aged About 45 Years R/o Ward No. 11, Manpur, P.S. Tahsil And District Surajpur Chhattisgarh, District : Surajpur, Chhattisgarh ... Petitioner(s) versus  Magma Fincorp Limited Registered Address- 24 Park Street, Kolkata, 700016, Through Branch Office Kirti Complex, Ravindranagar Chowk, Bilaspur District Bilaspur Chhattisgarh, District : Bilaspur, Chhattisgarh ... Respondent(s) For Petitioners : Mr. Gyan Prakash Shukla, Adv. For Respondent : None Hon’ble Shri Justice Rakesh Mohan Pandey Judgment On Board 19/06/2025 1. The petitioners have preferred this petition assailing the order passed by the learned First Additional District Judge, Surajpur, District – Surajpur (C.G.) in M.C.C. No. 63/2019 dated 31.07.2021 whereby the learned Court below rejected the application moved under Section 34 of the Arbitration and Conciliation Act, 1996. 2. Facts of the present case are that the petitioners herein took a home loan from the respondent – Company for a sum of Rs. 6,80,000/- and an agreement was entered into between the parties on 22.09.2015 in Digitally signed by AJINKYA PANSARE Date: 2025.06.25 14:51:24 +0530 2 this regard. As per the terms of the agreement, the petitioners were required to return the said amount along with interest within a period of 15 years by EMIs. The petitioners paid around nine installments and thereafter defaulted. Respondent sent several reminders and requests to the petitioners to make payment of the dues but to no avail. Thereafter, as per Clause 11 of the agreement dated 22.09.2015, the respondent terminated the agreement vide notice dated 26.12.2016 and demanded the outstanding amount to the tune of Rs. 7,17,643/-. Subsequently, vide letter of reference dated 12.01.2017, the respondent referred the matter to the one Paritosh Kumar Pal (Advocate) and appointed him as the Arbitrator as per Clause 24 of the agreement. Arbitration meetings were held on 01.03.2017 and 27.03.2017 wherein there was no representation on behalf of the petitioners; neither any counter statement was filed nor any accommodation was sought. Subsequently, on 29.04.2017, the Arbitrator proceeded with the matter and passed an award to the tune of Rs. 7,17,643 in favor of the respondent. Thereafter, an execution case was filed by the respondent wherein the petitioners filed an application under Section 34 of the Act, 1996 on 03.09.2019 and the same was dismissed vide order dated 31.07.2021. 3. Learned counsel for the petitioners submits that the agreement for the appointment of an Arbitrator was never executed between the parties and the award has been passed by the learned Tribunal in the absence of the petitioners which is in violation of the principles of natural justice. 4. Heard. 5. Perusal of the award would show that one Paritosh Kumar Pal 3 (Advocate) was appointed as Arbitrator to adjudicate the dispute involved in this case pursuant to Clause 24 of the agreement entered into between the parties on 22.09.2015. The arbitrator entered into reference on 31.01.2017 and directed the respondent (claimant) to file its statement of claim by 10.02.2017; the petitioners to file counter statement by 21.02.2017 and directed the parties to exchange their respective pleadings and thereafter, attend the first meeting of the Arbitration on 01.03.2017 at NPS Business Centre, 2nd Floor, 7A, Kiran Shankar Roy Road, Kolkata @ 4:30 p.m. In the first meeting i.e. 01.03.2017, there was no representation on behalf of the petitioners and on the second meeting i.e. 27.03.2017, none appeared on behalf of the petitioners and no statement of defense was filed. Finally, the Arbitrator passed the award on 29.04.2017. For the first time, the issue regarding the lack of jurisdiction of the Arbitrator was raised at the execution stage and the same was rejected vide order dated 31.07.2021. 6. Recently, the Hon’ble Supreme Court in the matter of M/S Gayatri Project Limited Versus Madhya Pradesh Road Development Corporation Limited1 rendered in Civil Appeal No. 6856 of 2025 has summed up the exposition of law conveyed in the matter of L.G. Chaudhary (II) (supra) in so many words which reads thus:- 35. In view of the above exposition of law, what has been conveyed by this Court in LG Chaudhary (II) (supra) in so many words is that:- (i) Where the arbitration proceedings are still underway, but no statement of defence has been filed, there it would be open for the parties to 1. MANU/ SC/ 0700/ 2025 4 raise an objection of lack of jurisdiction in view of the applicability of MP Act, 1983. The parties will also be at liberty to approach the High Court by way of a petition under Article 227 of the Constitution for seeking a transfer of the arbitration proceedings to the M.P. State Arbitration Tribunal under the MP Act, 1983. (ii) Where the arbitration proceedings are still underway, but statement of defence has already been filed i.e., the relevant stage for raising an issue of jurisdiction is already crossed, there it would not be open for the parties to raise an objection of lack of jurisdiction in view of the applicability of MP Act, 1983. Furthermore, in such scenarios since the arbitration proceedings have already commenced and made substantial progress, it would not be appropriate to transfer such proceedings to the M.P. State Arbitration Tribunal under the MP Act, 1983, and the better course of action would be to let the arbitration proceedings conclude. (iii) As per LG Chaudhary (II) (supra) where the arbitration proceedings have concluded and an award has been passed, and if no objection to the jurisdiction in view of the applicability of MP Act, 1983 was taken at the relevant stage then such an award cannot be annulled only on the ground of lack of jurisdiction. (iv) Any award passed by an arbitral tribunal under the Act, 1996, where otherwise the MP Act, 1983 was applicable, such an award may be challenged or assailed in terms of Section 34 and thereafter Section 37 of the Act, 1996 and other relevant provisions thereunder. 5 (v) Any award passed by an arbitral tribunal under the Act, 1996, where otherwise the MP Act, 1983 was applicable, such an award must be executed in terms of the MP Act, 1983 and the relevant provisions thereunder. (vi) Where the objection based on applicability of the MP Act, 1983 had been raised in the written statement or statement of defence, but the parties never took steps towards challenging the jurisdiction of the arbitral tribunal under Section 16 of the Act, 1996 or where such plea of jurisdiction was turned down in view of thef pronouncement of LG Chaudhary (II) (supra), then even in such cases, as per the decision of this Court in Modern Builders (supra), the award should not be disturbed or set-aside only on the ground of lack of jurisdiction. position of law that was prevailing prior to LG Chaudhary (II)(supra) i.e, such challenge to the jurisdiction was decided prior to the date of pronouncement of LG Chaudhary (II) (supra), then even in such cases, as per the decision of this Court in Modern Builders (supra), the award should not be disturbed or set-aside only on the ground of lack of jurisdiction. 7. The Hon’ble Supreme Court in the matter of M/S Gayatri Project Limited (supra) after elucidating the law laid down in the matter of L.G. Chaudhary (II) (supra) has come to the conclusion that objection regarding lack of jurisdiction in view of the applicability of Act, 1983 can be raised where arbitral proceedings are still underway, but no Statement of Defense has been filed and parties may approach the High Court by way of a petition under Article 227 of the Constitution for 6 transfer of the arbitration proceedings. 8. Taking into consideration the above-discussed facts and the law laid down by the Apex Court in the matter of M/S Gayatri Project Limited (supra), I do not find any ground to interfere with the order impugned. Consequently, this petition fails and is hereby dismissed. No cost(s). Sd/- Rakesh Mohan Pandey JUDGE Ajinkya