ARB.P. 166/2024 $~14 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010609302023 + ARB.P. 166/2024 M/S SANDHU MOTOR FINANCE PVT LTD .....Petitioner Through: Mr. Sudhir Gupta and Ms. Sonali Arora, Advocates. versus JATIN ARORA & ANR. .....Respondents Through: None. CORAM: HON'BLE MS. JUSTICE JYOTI SINGH O R D E R % 21.09.2026 1. This petition is filed on behalf of the Petitioner under Section 11(5) of the Arbitration and Conciliation Act, 1996 (‘1996 Act’) seeking appointment of a Sole Arbitrator. 2. To the extent necessary, facts as pleaded in the petition are that Petitioner is a Non-Banking Finance Company incorporated under the Companies Act, 1956 and registered with Reserve Bank of India and is engaged inter alia in the business of providing personal/vehicle/home loans etc. Respondent No.1 obtained a personal loan for a sum of Rs.2,00,000/- with interest @ 34.29% per annum, for a period of seven months on 07.01.2019 and Respondent No.2 was the guarantor. Loan Agreement dated 07.01.2019 was executed between the parties with terms and conditions stipulated therein. In discharge of the loan liability, Respondent No.1 issued a post-dated cheque bearing No. 000119 dated 07.08.2019 for a sum of Rs.2,40,000/- inclusive of interest. After expiry of 7 months, Petitioner presented the cheque for encashment, however, the cheque was returned This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/09/2026 at 13:59:57 ARB.P. 166/2024 with the remarks “FUNDS INSUFFICIENT” vide cheque returning memo dated 18.10.2019. 3. It is averred in the petition that Demand Notice dated 13.11.2019 was sent to Respondent No.1 to pay the outstanding loan amount but no payment came forth, constraining the Petitioner to file a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (‘1881 Act’), which, learned counsel for the Petitioner informs the Court, has been consigned to records due to non-appearance of Respondent No. 1, who has been declared as a proclaimed offender. Petitioner sent another Demand Notice on 16.06.2021 to pay an amount of Rs. 3,73,800/-, outstanding as on 15.06.2021 along with delayed payment interest @ 36% per annum but Respondent No. 1 did not fulfil his obligation to repay the loan. Since the Loan Agreement contains an arbitration clause for adjudication of disputes arising in respect of the Agreement, Petitioner sent notice invoking arbitration dated 17.07.2021 to Respondent No. 1, but there was no response. 4. It is further averred that Petitioner appointed a Sole Arbitrator, who entered upon reference on 13.08.2021, whereafter Statement of Claim was filed on 02.09.2021, claiming a sum of Rs. 3,73,800/- along with interest. None appeared on behalf of the Respondents in the arbitral proceedings despite service and having no option, learned Arbitrator proceeded and passed an ex parte award dated 27.05.2022, awarding a sum of Rs. 2,00,000/- in favour of the Petitioner along with interest @ 34.29% per annum. Respondents failed to pay the awarded amount and Petitioner filed Ex. Comm. No. 74/2022 before the District Judge (Commercial Court-01), Shahdara District, Karkardooma, however, in light of the judgment of the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/09/2026 at 13:59:57 ARB.P. 166/2024 Supreme Court in Perkins Eastman Architects DPC and Another v. HSCC (India) Limited, (2020) 20 SCC 760, the Executing Court held that the ex parte award was non-est in eyes of law and hence, non-executable, being a nullity and dismissed the execution petition. In these circumstances, Petitioner filed the present petition for appointment of a Sole Arbitrator. 5. Notice was issued to the Respondents on 06.02.2024. Learned Joint Registrar on 19.01.2026 recorded that Respondent No. 1 was served through publication in newspaper ‘The Statesman’ dated 14.01.2026 but could not be served through ‘Rashtriya Sahara’ as the same was no longer in circulation. Right of Respondent No. 1 to file reply was closed vide order dated 25.08.2026 and right of Respondent No. 2 was closed earlier on 13.10.2025. The matter has been called twice today. None appeared on behalf of the Respondents on the first call and none appears on the second call. No steps have been taken by the Respondents to challenge the orders, whereby their rights to file replies have been closed. It appears that Respondents are not interest in contesting the present petition and are set ex parte. 6. The above narrative shows that this is a second round of litigation between the parties. Respondents chose not to appear before the Arbitrator and having no option, an ex parte award was passed in favour of the Petitioner. The award was, however, set aside by the Executing Court since the appointment of the learned Arbitrator was unilateral. Petitioner has now taken recourse to appointment of the Arbitrator afresh but even in these proceedings, Respondents have chosen not to contest. It seems that Respondents are habitual of not appearing in Court proceedings, which is evident from the fact that even in the proceedings under Section 138 of 1881 Act, Respondent No. 1 did not appear and has been declared as a proclaimed This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/09/2026 at 13:59:57 ARB.P. 166/2024 offender. 7. The Loan Agreement between the parties contains an arbitration Clause 17, whereby parties agreed that all disputes and differences concerning the said Agreement shall be adjudicated by a Sole Arbitrator to be appointed by the lender. Owing to the judgment of the Supreme Court in Perkins (supra) as also amendment to 1996 Act in 2015, Petitioner is denuded of its right to appoint an Arbitrator unilaterally. For ease of reference, Clause 17 is extracted hereunder:- “17. Arbitration and Dispute Settlement a) All disputes, differences and/or claims, arising out of this Agreement, whether during its subsistence or thereafter, shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any other statutory modification or re-enactment for the time being in force and shall be conducted by a sole arbitrator to be appointed by the Lender. The applicable law shall be Indian laws. In the event of incapacity or resignation or death of the sole arbitrator so appointed, the Lender shall be entitled to appoint another arbitrator in place of the earlier arbitrator, and the proceedings shall continue from the stage at which the predecessor had left b) The award given by the arbitrator shall be final and binding on the parties to this Agreement. The cost of the Arbitration shall be borne with by the Party/ies, in accordance with the Award passed by the Arbitrator. c) The venue of Arbitration shall be as specified in Schedule 1 hereto and the proceedings shall be conducted in English language.” 8. Under Section 11(6) of 1996 Act, the referral Court is required to determine prima facie existence of an arbitration clause. In the instant case, the Loan Agreement in question contains the aforesaid clause envisaging adjudication of disputes by Sole Arbitrator. Accordingly, Mr. Vedant Kohli, Advocate (Mobile No. 9716682909) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties. Arbitral proceedings will be held This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/09/2026 at 13:59:57 ARB.P. 166/2024 under the aegis of Delhi International Arbitration Centre (‘DIAC’). Fee of the Arbitrator shall be fixed as per fee schedule under DIAC (Administrative Cost & Arbitrators’ Fees) Rules, 2018. 9. Learned Arbitrator shall give disclosure under Section 12 of the 1996 Act before entering upon reference. 10. It is made clear that this Court has not expressed any opinion on the merits of the case and all rights and contentions of the respective parties are left open. 11. It is left open to the Respondent to prefer a counter claim, if any, before the learned Arbitrator. 12. Petition is disposed of in the aforesaid terms. JYOTI SINGH, J SEPTEMBER 21, 2026/YA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/09/2026 at 13:59:57