Certificate No: IN-TN57555947020157W

Case ID: A092453

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 ARBITRATION PROCEEDINGS BEFORE THE TRIBUNAL OF ARIF MOHAMMED MADANI, RETD.
Certificate No: IN-TN57555947020157W

DISTRICT JUDGE

ARBITRATOR
ARBITRATION CASE ID: A092453
Case ID: A092453

SEAT OF ARBITRATION: Chennai, India

Varthana Finance Private Limited

Varasiddhi, 3rd Floor, No. 5BC-110 Service Road, 3rd Block HRBR Layout Bangalore KA 560043 Bangalore
560043 Karanataka India
Through Authorized Signatory
Mr.Chandra Kumar and Mr. Aditya
aditya.c@varthana.com

... Claimant

VERSUS

Chadaram Dinesh
Borrower
44-34-80 Nandagiri Nagar Akkayyapalem Visakhapatnam Andhra Pradesh,530016 Visakhapatanam 530016
Andhra Pradesh India
chadaramdinesh@gmail.com
9985730240;

... Respondent(s)

Participation:
For the Claimant: Mr.Chandra Kumar and Mr. Aditya
For the Respondent(s): Advocate Yabesh Shetty and Mr.Chadaram Dinesh

AWARD

Date: 15-01-2025

1. Preliminaries:
1.1 This matter is in respect of the dispute that has arisen between the parties and in terms of the loan
agreement inter-se, such dispute is to be resolved by arbitration. For this purpose, and in light of the
amendments in the arbitration law and the judicial pronouncements regarding appointment of arbitrators,
with a view to provide each party full opportunity to present its case fairly and conveniently, and in order to
facilitate the conduct of arbitration proceedings, administrative assistance by a suitable institution or person
was evaluated. Accordingly, a list of institutions offering Alternative Dispute Resolution (“ADR”) services
including through Online Dispute Resolution (“ODR”) was considered. Presolv360 was identified as one

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 such neutral institution included in the said list that provides administrative support to the parties which has
no interest in the outcome of the dispute and no conflict of interest. Consequently, vide notice under
Certificate No: IN-TN57555947020157W

Section 21 of the Arbitration and Conciliation Act, 1996 (“the Act”) dated 14-05-2024, the Respondent(s)
were intimated of the same and views / say of the Respondent(s) were invited. Upon failure of any
response, it was understood that the contents of the notice under Section 21 of the Act were correct and
the Respondent(s) waived the right to object to the same. The reference or the arbitration process was not
challenged, and accordingly, the arbitration was registered and Case ID A092453 was assigned thereto.
Case ID: A092453

For the sake of clarity, the term Respondent(s) shall refer to ‘Respondent’, in case of sole Respondent, and
to all ‘Respondents’, in case of more than one Respondent, unless repugnant to the context.
1.2 Presolv360 administers arbitration proceedings via its platform, and empanels independent, qualified
arbitrators with the required competence, knowledge and varied expertise on its panel of arbitrators. The
panel is a broad-based panel that consists of retired judges and other professionals like lawyers,
engineers, accountants, etc, and the said panel cannot be hand-picked by any one party. The arbitration
proceedings are conducted under the Act. The undersigned was assigned to act as the arbitrator from the
said panel on behalf of all the parties to preside over the present arbitration proceedings. Notification of
registration of arbitration dated 02-07-2024 was provided to the Respondent(s). The email was first read on
08-07-2024. . . A copy thereof was provided to the Claimant. The said notification contained, inter alia, brief
description of the claim, relief or remedy sought, details of the arbitrator, video explanation and instructions
for accessing the case management system. The details pertaining to the delivery and service of all digital
communications throughout the proceedings is tracked and obtained through Email / SMS / WhatsApp
APIs (Application Programming Interface).
1.3 The undersigned submitted acceptance and consent to act as an arbitrator along with statutory disclosures
under Section 12 of the Act read with the Fifth and Sixth Schedule thereto in respect of independence,
impartiality, ability and availability to complete the entire arbitration within the time limits prescribed. The
parties were notified of the consent and disclosures made by the undersigned alongwith the procedure to
be followed for the said proceedings. . . . .
2. Claimant’s Statement of Claim and Evidence
2.1 As per the Statement of Claim, the Claimant is a company incorporated under the Companies Act and is
engaged, inter alia, in the business of providing loan / finance facilities in accordance with the guidelines
issued by the Reserve Bank of India from time to time.
2.2 It is averred that the Respondent(s) approached the Claimant seeking Educational loan. The Respondent
(s) were made well-aware of the terms of the loan as well as the repayment schedule stipulated therein and
undertook to perform all their obligations under the said loan agreement. The Claimant, on the basis of
various documents, representations and information submitted and on the basis of subsequent discussions
held, and on being satisfied with the financial credentials of the Respondent(s), agreed to, on 28-03-2023,
sanction and disburse a sum of Rs. 210000. The Respondent(s), on being convinced, satisfied and
agreeable to the terms and conditions of the loan, executed the loan agreement bearing no. 'DIG33475EL
and obtained the loan facility from the Claimant. The loan carried interest at the rate of 16% p.a., and, the
Respondent(s) were required to repay the loan, and the interest payable thereon, as per the repayment
schedule contained in the loan documents.
2.3 It is further averred that the Respondent(s) committed an act of default by failing and neglecting to pay
various amounts of instalments which fell due and payable in terms of the loan agreement. As per the
agreement, in the event of default, the Claimant shall be entitled to call upon the Respondent(s) to pay
forthwith the outstanding balance of the loan together with interest, additional interest and other charges.
Digitally signed by Arif Mohammed
Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 Accordingly, vide notice under Section 21 of the Act dated 14-05-2024, the Claimant called upon the
Respondent(s) to forthwith make payment of the outstanding sum due and payable by the Respondent(s)
Certificate No: IN-TN57555947020157W

to the Claimant.
2.4 It is stated that in spite of reminders sent by the Claimant to the Respondent(s) from time to time for the
settlement of outstanding dues under the loan facility, the Respondent(s) failed and neglected to pay the
outstanding amount of Rs. 170292 as on 14-05-2024. As per the agreement, the Respondent(s) are liable
to pay the Claimant additional interest / late payment charges and other charges.
Case ID: A092453

2.5 In view of the disputes between the parties inter-se, the Claimant registered the arbitration in terms of
clause 16 contained in the agreement read with notice under Section 21 of the Act dated 14-05-2024. In
light of the amendments in the arbitration law and the judicial pronouncements regarding appointment of
arbitrators, with a view to provide each party full opportunity to present its case fairly and conveniently, and
in order to facilitate the conduct of arbitration proceedings, administrative assistance by a suitable
institution or person was evaluated. For this purpose, the list of institutions offering ADR services including
through ODR was considered. Presolv360 is one such neutral institution included in the said list that
provides administrative support to the parties, has no interest in the outcome of the dispute and there is no
conflict of interest. Accordingly, the dispute was registered with Presolv360 to be resolved by arbitration
under the Act. The Claimant has sought an award in terms of the prayers contained in the Statement of
Claim.
2.6 The authorized signatory of the Claimant gave declaration under oath in support of the claim and annexed
copies of 1. Authority Letter, 2. Loan Documents, 3. Statement of Account, 4. Notice under Section 21 of
the Act dated 14-05-2024 as documentary evidence in support of the claim. It has been recorded that the
documents and evidences in support of the claim are true and exact copies of the originals, and the
Claimant undertakes that the physical originals from which the electronic copies have been made are
retained and available throughout the arbitration and, to the extent required by any rules or other applicable
law, for a subsequent period.
2.7 The Statement of Claim dated 15-07-2024 was filed and intimation regarding the same along with
instructions to submit Statement of Defence was communicated to the Respondent(s).It was delivered to
Respondent's email ID on 15-07-2024. . The email was first read on 15-07-2024. . Aforesaid documents
were transmitted / provided by postal / courier service bearing tracking no. RM067396124IN.
2.8 Respondent(s) were contacted via automated phone system technology (IVR) on the given contact number
on 04-07-2024 for informing about the arbitration proceedings.
3. Respondent’s Statement of Defence and Evidence
3.1 The Respondent has made submissions and uploaded certain documents as part of the response. The
Respondent’s submissions are summarized hereunder:
3.1.1 The Respondent submitted that the Claimant offered educational loan to the Respondent, and the
said loan was disbursed to Careerlabs Technologies Private Limited (“said educational institute”)
towards fees for an educational course offered by the said educational institution which assured an
internship opportunity to the Respondent in Pratian Innovation Campus (“the said company”).
3.1.2 The Respondent further submitted that the status of the said educational institute and the said
company is that they both are not functioning and have closed.
3.1.3 It is the Respondent’s contention that the above amounts to deficiency in service and that the
Respondent has been cheated. The Respondent further contends that students of the earlier

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 batches experienced the same fate.
Certificate No: IN-TN57555947020157W

3.1.4 It is averred that the Respondent along with other students who were offered internships in the said
company are still not paid the stipend as promised under the terms of the offer letter.
3.1.5 It is further averred that fraud has been committed and the Respondent has been cheated along
with other students. It is submitted that there is breach of trust committed by the said company and
said educational institute.
Case ID: A092453

3.1.6 The Respondent submitted that in spite of having knowledge of the fraud being committed by the
said company, the Claimant disbursed loan amount in the account of the said educational institute.
3.1.7 Further, it is submitted that the Respondent along with the other students sought the loan
documents executed by the parties, however, the Claimant failed to provide the same.
3.1.8 The Respondent submitted that the Claimant had assured the Respondent that the loan account will
be cancelled, however, the same has not been done.
3.1.9 The Respondent submitted that a complaint was lodged in the police station where no action was
taken and no FIR has been lodged as of yet.
3.1.10 The Respondent prayed for the loan sanctioned by the Claimant to be cancelled, and NOC be
issued.
3.2 The Claimant was directed to file its Rejoinder.
4. Claimant’s Reply
4.1 The Claimant, in its Rejoinder, reiterated the contents of the Statement of Claim and denied and disputed
the submissions of the Respondent.
4.2 The Claimant submitted that the Claimant is not a party to the agreement entered into between the
Respondent and the said educational institute and further it is submitted that the Claimant is having no
knowledge of the arrangements between the Respondent and the said educational institute and the said
company.
4.3 The Claimant submitted that the Respondent had approached the Claimant for the education loan and
thereafter, the Claimant, after perusal of the documents supplied by the Respondent, disbursed the
education loan. It is submitted that the Respondent failed to repay the monthly instalments as per the loan
agreement. Further, it is submitted that the Respondent is duty bound to repay the loan amount as per the
terms and conditions of the abovesaid agreement. In this regard Claimant relied upon Indian Bank Vs. M/s
Blue Jaggers Estates Ltd., wherein the Hon’ble Supreme Court of India held that, “The Court cannot lose
sight of the fact that the bank is a trustee of public funds. It cannot compromise the public interest for
benefiting private individuals. Those who take loan and avail financial assistance from the Bank are duty
bound to repay the amount strictly in accordance with the terms of contract. Any lapses in such matters
have to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by
adopting all legally permissible methods.”
4.4 The Claimant submitted that the officer of the Claimant informed the terms and conditions of the loan and
informed the Respondent regarding loan amount disbursement in the favor of the said educational institute,
and further informed the Respondent to repay the loan instalments, which the Respondent agreed to and
accordingly, executed the loan agreement. It is further submitted that as per Clause 23 the liability of

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 borrower is to be joint and several. In this regard the Claimant relied upon Bharti Knitting Company vs. DHL
Worldwide Express Courier [(1996) 4 SCC 704], wherein it was held that when the complainant signs the
Certificate No: IN-TN57555947020157W

contract documents, he is bound by its terms and conditions.

4.5 The Claimant further submitted that till date no complaint has been registered before the concerned
authority, nor any orders have been passed in respect of the complaint filed by the Respondent.
5. Submissions made during the oral hearing
Case ID: A092453

5.1 Oral hearing (via video conferencing) was conducted on 17-09-2024 at 11.30 a.m.
5.2 Mr. Chandra Kumar and Mr. Aditya appeared for the Claimant. Advocate Yabesh Shetty appeared for the
Respondent.
5.3 Submissions and counter- submissions were advanced by the parties.
5.4 Vide order dated 17-09-2024 the arbitration proceedings were closed, and the matter was reserved for
award.
6. Issues, findings and reasoning
6.1 Whether the arbitrator has jurisdiction over the present arbitration proceedings?
6.1.1 The Claimant and Respondent(s) executed aforesaid loan agreement whereby the Respondent(s)
availed Educational loan facility from the Claimant on 28-03-2023. Disputes arose between the
parties as the Respondent(s) defaulted by failing and neglecting to pay various amounts of
installments which fell due and payable in terms of the said loan agreement.
6.1.2 In terms of clause 16 contained in the aforesaid agreement, such dispute shall be resolved by
arbitration. For this purpose, and in light of the amendments in the arbitration law and the judicial
pronouncements regarding appointment of arbitrators, with a view to provide each party full
opportunity to present its case fairly and conveniently, and in order to facilitate the conduct of
arbitration proceedings, administrative assistance by a suitable institution or person was evaluated.
Accordingly, a list of institutions offering ADR services including through ODR was considered.
Presolv360 was identified as one such neutral institution included in the said list that provides
administrative support to the parties which has no interest in the outcome of the dispute and no
conflict of interest. Consequently, the Claimant issued notice under Section 21 of the Act dated 14-
05-2024 and views / say of the Respondent were invited in respect of the same. The reference or
the arbitration process was not challenged, and accordingly, the arbitration was registered and Case
ID A092453 was assigned thereto.
6.1.3 Records indicate that notification of registration of arbitration was duly served on the parties,
containing, inter alia, brief description of the claim, relief or remedy sought, details of the arbitrator,
video explanation and instructions for accessing the case management system.
6.1.4 The undersigned was assigned to act as the arbitrator from the panel on behalf of all the parties to
preside over the present arbitration proceedings.
6.1.5 Acceptance, consent and disclosures made were submitted as per law and parties were notified
accordingly. I confirmed therein that I am not connected with any of the parties to the matter and that
my relationship with the parties or counsel or the subject matter of this dispute does not fall under
any of the categories specified in the Seventh Schedule to the Act.
6.1.6 From the inception, right from the notice under Section 21 of the Act, the Respondent(s) were
intimated of the administration of the proceedings in the aforesaid manner. The parties were notified

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 of the details of the arbitrator, provided with an option to seek list of panel of arbitrators to choose
another arbitrator and a simplified procedure to challenge the assignment of the matter to the
Certificate No: IN-TN57555947020157W

undersigned, as per law. Accordingly, all the parties to the dispute had an equal say in the
appointment of the arbitrator, the constitution of the arbitral tribunal and also had the option to
challenge the arbitrator. No ground under Section 12(3) and none of the circumstances as specified
in Section 12(5) read with the Seventh Schedule to the Act are shown to have been existing. Both
the Claimant and Respondent(s) were made aware of the appointment of the undersigned as the
Case ID: A092453

arbitrator to preside over the present proceedings at the same time and had equal say and
opportunity with aspects concerning the appointment of the arbitrator and the constitution of the
arbitral tribunal, thus, eliminating any influence of either party in the assignment of the arbitrator.
6.1.7 With respect to the contention regarding fraud committed by the said company and said educational
institute, the same is not the subject matter of the present arbitration proceedings nor does it fall
within the purview of the agreement entered into and executed by the parties. Accordingly, the
arbitrator does not have any jurisdiction to adjudicate upon such a matter and any proceedings in
respect of the same shall be carried out independently and uninfluenced by the outcome of the
present proceedings.
6.1.8 I have gone through the authority letter annexed to the Statement of Claim as per which, the
specified representative of the Claimant therein, is duly authorized to do, execute and perform all
acts, deeds, matters and things as may be necessary for the purpose of this matter. The claim is
filed in time and no part of the present claim is barred by limitation.
6.1.9 The claim and disputes between the parties arose out of the defaults committed by the Respondent
(s) under the loan agreement, and therefore, fall within the scope of the arbitration agreement
entered into between the parties. Therefore, the arbitrator has the requisite jurisdiction over the
present arbitration proceedings.
6.2 Whether the Respondent(s) have availed the loan facility and committed the defaults as envisaged in the
Statement of Claim?
6.2.1 As per the Statement of Claim supported by declaration and supporting documents, it is submitted
that, after completion of requisite formalities, the Respondent(s) availed of and the Claimant, on 28-
03-2023, sanctioned and disbursed loan for a sum of Rs. 210000 vide loan agreement bearing no.
'DIG33475EL which carried interest at the rate of 16% p.a. The Respondent(s) was required to
repay the loan, and the interest payable thereon, as per the repayment schedule contained in the
loan documents.
6.2.2 It is further submitted that the Respondent(s) failed to pay various amounts of installments which fell
due and payable in terms of the loan agreement.
6.2.3 Accordingly, the Respondent(s) committed an act of default, and the Claimant was entitled to call
upon the Respondent(s) to pay forthwith the outstanding amount together with further interest,
additional interest and other charges.
6.2.4 Perused the submissions. It is clear that the Respondent has entered into an agreement with the
Claimant and executed a loan agreement and the Respondent defaulted in making payments of
instalments which fell due and payable in terms of the said agreement. In my view, the Claimant is
exercising its legal remedy and enforcing a contractual right. Even if I may sympathize with the
personal reasons cited by the Respondent, such reasons do not constitute a valid defence to the
failure of fulfilling contractual obligations of the Respondent towards the Claimant.

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 6.2.5 Therefore, having perused the submissions and supporting documents, and having been satisfied of
the same, I find that the Respondent(s) has availed the loan facility and committed the defaults as
Certificate No: IN-TN57555947020157W

envisaged in the Statement of Claim.

6.3 Whether the Claimant is entitled to receive the claim amount and any interest thereon, and if so, at what
rate?
6.3.1 As per the Statement of Claim and materials placed on record, after adjusting the amount already
Case ID: A092453

paid, an amount of Rs. 164753 as on 14-05-2024 is outstanding and remains unpaid towards the
Claimant in spite of reminders issued from time to time and notice dated 14-05-2024.
6.3.2 The Claimant has further shown that, as per the loan agreement, the Respondent(s) is liable to pay
interest at the rate of 18% p.a. and additional interest.
6.3.3 As per Section 31(7) of the Act, the arbitrator has power to award interest from the date on which
cause of action arose till the date of realization of dues. The Hon'ble Supreme Court has held in
State of Orissa v. B.N. Agarwalla AIR 1997 2 SC 925 the arbitrator has power to award interest
pendente lite and post-award interest. The purpose of grant of interest is not to burden the defaulting
party, but to compensate the claiming party for loss of use of such money. The rate of interest must
therefore be reasonable and not penal.
6.3.4 Considering the unique facts and circumstances in the present case, while it is established that the
loan agreement had been executed between the parties herein and the amount had been disbursed
to the said educational institute as per the said agreement, it appears that the Respondent, being a
student, has suffered on account of Careerlabs Technologies Private Limited, the educational
institution, and Pratian Innovation Campus, organization which apparently offered internship. While
the Claimant had nothing to do with the fact that the Respondent met with such fate, the
undersigned finds it equitable to direct the Respondent to pay only the outstanding principal amount
to the Claimant. This is with an intent to go beyond and grant justice for the greater good of society
and protect the future of the country. Thus, I find it just and expedient to direct the Respondent to
pay the principal outstanding amount of Rs. 164753 to the Claimant. Further, in light of the
exceptional situation, I am inclined to permit the Respondent to pay the aforesaid amount in 06
monthly installments beginning from 03 months of date of this award. The schedule of payment is
captured in the operative part below. In the event of any default on account of the Respondent, the
entire amount shall become due immediately.
6.3.5 In the event any amount has been paid by the Respondent(s) at any time during the course of the
arbitration proceedings but before the date of this Award, or at a time prior to the commencement of
the arbitration proceedings and not adjusted against the amount due, then such amount shall be
adjusted from the sum hereinabove.
6.4 Whether the Claimant is entitled to cost of arbitration proceedings, and if so, what amount?
6.4.1 In the Statement of Claim, the Claimant has prayed for costs and legal expenses of the present
arbitration proceedings. As per Section 31-A of the Act, the arbitrator has the power to award costs
of arbitration.
6.4.2 However, looking to the exceptional circumstances in the present case, there shall be no order as to
cost.
6.5 Whether the Claimant is entitled for any other relief?
6.5.1 The Claimant in the Statement of Claim has prayed for such other and further reliefs as deemed fit

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 considering the facts and circumstances of the present case.
Certificate No: IN-TN57555947020157W

6.5.2 I do not find it necessary to provide for any other reliefs and therefore, this issue is answered in the
negative.
6.6 What award?
I hereby make and publish this award in accordance with the provisions of the Arbitration and Conciliation
Act, 1996. The award is passed in favour of the Claimant and against the Respondent(s) to pay to the
Case ID: A092453

Claimant as per the following award.

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu
 AWARD
Certificate No: IN-TN57555947020157W

Based on all these considerations set forth above, the arbitrator renders the following:

A. The claim of the Claimant is partly allowed.

B. The Respondent shall be liable to pay to the Claimant a sum of Rs. 164753. In light of the exceptional
Case ID: A092453

situation, I am inclined to permit the Respondent to pay the aforesaid amount in 6 monthly installments
beginning 3 months from date of this award. Accordingly, the payment schedule shall be as follows:
Payment latest by Amount (Rs.)
30th April 2025 27459
31st May 2025 27459
30th June 2025 27459
31st July 2025 27459
31st August 2025 27459
30th September 2025 27459
In the event of any default in payment as per the schedule above by the Respondent, the entire amount
shall become due immediately.
C. In the interest of all the parties, in the event any amount has been paid by the Respondent(s) at any time
during the course of the arbitration proceedings but before the date of this award, or at a time prior to the
commencement of the arbitration proceedings and not adjusted against the amount due, then such amount
shall be adjusted from the sum awarded hereinabove.
D. There shall be no order as to cost.
E. The award is published and signed electronically. Stamp duty, whether digital or physical stamp paper, of
appropriate value be appended to the award. If such stamp paper is not available, the concerned party shall
bear the same as per applicable law. Such signed award shall be delivered to each party electronically by
email / WhatsApp / SMS, as available, and if undelivered through electronic means, by postal / courier
service for the purpose of Section 31(5) of the Act. The record of the arbitral proceedings, and physical
stamp paper, where applicable, shall be preserved for a reasonable period of time by the administrative
institution.
F. Interim measures granted, if any, stand confirmed and remain in effect until the beginning of the period from
which the award becomes eligible to be enforced in accordance with Section 36 of the Act. The arbitration
proceedings are accordingly terminated.
G. In the event the present matter is settled and a letter / certificate to that effect is issued by the Claimant,
order, if any, granting interim measures of protection shall stand automatically vacated, and the present
award shall stand satisfied and rendered infructuous without reference to this Tribunal.

Date: 15-01-2025
Seat of Arbitration: Chennai, India

Digitally signed by Arif Mohammed

Madani
2025.01.15 06:15 +05:30
Reason : Arbitral Award
Location: Tamil Nadu