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BEFORE THE LEARNED SOLE ARBITRATOR Mr. R. PALANIANDAVAN,

ADVOCATE, AT CHENNAI

Arbitration O.P No. 128 of 2022

In the matter of Arbitration and Conciliation Act, 1996 as

amended by the Arbitration and Conciliation (Amendment)
Act, 2021 (3 of 2021)

And

In the matter of Disputes BETWEEN (i) P. Ravindran, (ii)

M/s. SARC Exports, represented by its Partner Mr. Albert
Raj
AND

(iii) Ms. HemalathaKesavan under the Memorandum of

Understanding dated 24.03.2018

Ms. HemalathaKesavam,
D/o. L.S. Parthasarathy,
New No. 11, old No. 6,
1st Floor, 18th East Street,
Kamaraj Nagar,
Thiruvanmiyur,
Chennai-600041
... Claimant.
Vs

1. Mr. P. Ravindran,
S/o. Parthasarathy,
No.6, 9th Cross Street,
Indira Nagar, Adyar,
Chennai-600020

2. M/s. SARC Exports,

Represented by
Mr. Albert Raj,
S/o. Cheladurai,
110, Raja Garden,
Vanagaram,
Chennai-600 095
…..Respondents

WRITTEN ARGUMENT FILED ON BEHALF OF THE RESPONDENTS

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1. It is submitted that the Claimant herein filed the Arbitral Claim seeking for an

award directing the Respondents a) to pay a sum of Rs.7,53,725/- together with sum

of Rs. 4,62,597/- towards simple interest at the rate of 18% per annum for 29.11.2018

to 31.05.2022 in addition to profit margin of Rs.45,000/- making it all a sum of

Rs.12,61,322/- b) directing the Respondent to pay future interest at the rate of 18%

per annum on the principal sum of Rs.7,53,725/- from the date of filing the claim

petition till the date of realization c) directing the Respondent to pay the cost of the

present arbitral proceedings.

2. It is submitted that in the claim petition it is averred that the 1 st Respondent is the

friend of the 2nd Respondent and the 1st Respondent introduced the 2nd Respondent to

the Claimant in the year 2016 and at their request, the Claimant had advanced a

sum of Rs.11,50,000/- in favour of 2 nd Respondent with a promise to return amount on

or before 31.12.2017 but the 2nd Respondent repaid only Rs.2,00,000/-. On

24.03.2018, the Respondents herein entered a MOU with the Claimant to repay the

sum of Rs.9,50,000/- in 3 installments. But only Rs.2,50,000/- was repaid and after

adjusting the payment with principal and interest, the Respondents are liable to pay

Rs.7,53,725/- towards principal, Rs. 4,62,597/- towards interest totaling

Rs.12,61,332/-. On 18.12.2022, the Claimant issued notice calling upon the

Respondents to pay the amount. The reply was issued on 22.01.2022 but no payment

has been made. Thus, the claim.

3. It is submitted that the Claimant was examined as CW1 and marked 8 documents

on his behalf. The 2nd Respondent was examined as RW1.

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4. It is submitted that the contention of the Respondent that the 2 nd Respondent is an

Exporter of Onion running a Proprietorship concern in the name and style of M/s.

SARC Exports. During November 2016 Mr. Subramanian @ Pianang of Malaysia

had placed me an order for the supply of onion. As the demonetization was

introduced in the relevant point of time, he had raised money from various

creditors in piece meal, purchased onion and exported the same to the customer in

Shipping Bill No.0016FDFT1701124 dated 28.11.2016 for USD $15,390/- = Rs.

10,00,350/-. After receiving the consignment, the buyer changed his mind and

refused to clear up the bill and all the better efforts to recover the money from the

buyer proved futile. In these perplexed situations, the 1 st Respondent herein

introduced the Claimant to the 2nd Respondent and narrated the situation. At the time,

the Claimant herein, acclaimed herself as International Recovery Agent having

contact all over the world, and requested me to entrust the matter to her and undertook

to recover the bill amount from with Mr. Subramanian @ Pianang of Malaysia by

using her influence. On believing the words, the 2 nd Respondent entrusted the matter

to the Claimant and the Claimant pressurized the buyer to release Rs.2,00,000/- in a

short while and thereby gained his confidence. However, the Claimant herein adjusted

the said sum towards the initial service charge. After the passing of time, there was

no progress in recovery. When questioned, it was replied that the buyer is questioning

the authenticity of the Claimant to claim the money on my behalf and advised me to

sign in the letter of authorisation and memorandum of understanding in favour of the

Claimant to proceed with the matter further. Blindly believing the words and

without accessing the implications thereof, 2 nd Respondent signed all the papers

shown to me. The 1st Respondent was also formally asked to sign in the papers. At

that time, the claimant herein collected additional sum of Rs. 5,00,000/- from the 2 nd
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Respondent in the caption of service charges and travelling expenditure. Even then the

Claimant was keeping on dodging the matter in the pretext of one or other for years

together. Now the claimant preferred this arbitral claim alleging that during the year

2016, at the introduction of the 1 st Respondent, I have borrowed a hand loan of

Rs.11,50,000/- from the Claimant for my export business without any security and the

Respondents have promised the Claimant to settle the entire loan amount on or before

31.12.2017. The Claimant failed to aver the exact date of the loan and no documents

have been produced to substantiate the factum.

5. The Respondent denied the voluntarily execution of Memorandum of Understanding

dated 24.03.2018. It is their contention that the Memorandum of Understanding was

the fallacy of the Claimant and the Respondent were allured to sign in the

Memorandum of Understanding out of bargain and misguidance. Even the CW2 the

attesting witness of the MOU, was unable to explain the execution and thus it is clear

the MOU was not made out of free will. In the Memorandum of Understanding dated

24.03.2018 the date and time of advance of Rs.11,50,000/- was not indicated. The

failure on the part of the buyer Mr. Subramanian @ Pianang of Malaysia to release the

full payment leading to the execution of Memorandum of Understanding and the

repayment of Rs.2,00,000/- by the buyer were also admitted in the Memorandum of

Understanding. In clause 2 of the Memorandum of Understanding, it is agreed to pay

a sum of Rs.45,000/- as profit margin in addition to the settlement to the Claimant and

the said clause clearly demonstrates that the claimant was entrusted to recover the

amount from the buyer for which she is entitled for service charges and any loan

amount carries only interest but not the profit margin. The refund of loan by 3

instalments as found in the clause 1 of the Memorandum of Understanding is also

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maneuvered and the clause was added only to show to the buyer that the Claimant

is also interested in recovery.

6. It is submitted that the Respondents are not bound to pay Rs.9,50,000/- to the claimant

towards the balance principal as per the Memorandum of Understanding dated

24.03.2018The Memorandum of Understanding itself was setup by the Claimant

taking advantage of our ignorance, the Respondents are not liable to pay interest of

@18% per annum to the balance interest of Rs.9,50,000. The Claimant herein

collected total sum of Rs.7, 00,000/- from the 1st Respondent in the pretext of service

charge and flight charge for recovery of the bill amount from the buyer in the year

2018 itself. The Claimant herself made endorsements in the Memorandum of

Understanding on different dates only to suit her convenience and thus the

endorsement are self-serving to save the limitation. The Respondent are not liable to

pay Rs.7,53,725/- to the Claimant towards principal due and Rs.4,62,597/- towards

interest in addition to the profit margin of Rs.45,000/- totalling Rs.12,61,333/-.

7. The allegation that on 20.09.2021 the 1st Respondent made the last payment to the

Claimant is denies as false. As the endorsement was made by the Claimant herself, the

endorsement has no legal substance and not binding on us. The reply notice dated

22.01.2022 was only at the instance of the Claimant so to show the same to the

foreign buyer to recover the amount. The admissions made in the legal notice are not

voluntary and only after the legal notice, the real colour of the Claimant was exposed

and we have realized that a fraud was played upon us. It is settled law that in the

Money Suit, the plaintiff has to plead and prove, the lending of money. In the Claim

Petition exact date of lending of money is not pleaded and no piece of documents
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have been filed to substantiate the loan. When I was in the process of realizing the bill

amount from the Malaysian buyer, the Claimant acclaimed herself as renowned

international level recovery agent, gave rosy picture about her stature, allured me to

entrust the matter to her, collected Memorandum of Understanding, Letter of

Authorisation from the Respondent and swindled Rs.7,00,000/- in the pretext of

service charge and travelling expenditure and after looting everything, filed his

arbitral claim placing reliance on the fraudulent Memorandum of Understanding and

other correspondence which were made at her instance. As the admissions were made

out of bargain and undue influence and admissions are bad in law and admissions

would not give any unfettered right to the Claimant to file this Arbitration claim

against us. Since the lending of the loan of Rs.11,50,000/- to the Respondent is

illusory, sham and practically moonshine, the subsequent admission obtained by

adopting deceptive methods will not give raise to a cause of action to this

Arbitration Claim Petition. When the lending of loan is denied by the Respondent and

as such the principal balance and the interest claimed by the Claimant are also denied

as illusive. The claim in the caption of Profit margin to the tune of Rs.45,000/- by the

Claimant goes to the root of the case. The Claimant has no cause of action to file this

Arbitration Claim Petition and the cause of action is not pleaded in the Claim Petition.

Thus, the Claim Petition is liable to be rejected in its threshold. When the claim

averment itself is so specific that the 1 st Respondent is only an introducer, there is no

explanation as to how the award can be passed against the 1 st Respondent. The 1st

Respondent have already lost my investment in the export bill valued Rs.10,00,350/-

and also paid more than Rs.7,00,000/- to the Claimant towards service charge and

travelling expenditure to recover money from the foreign buyer. Thus, the 1 st

Respondent should not be compelled to pay the fictitious claim of the Claimant. The
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claim itself is scrupulously barred by limitation and self-endorsement of the claimant

dated 29.09.2021 will not give raise to cause of action in favour of the Claimant and

the relief of directing the Respondents to pay Rs.7,53,725/- together with interest at

Rs.4,62,597/- and profit margin of Rs.45,000/- totalling Rs.12,61,322/- and the future

interest at the rate of 18% per annum on the principal sum of Rs.7,53,725 from the

date of Claim Petition till realization are not maintainable.

8. It is submitted that it is the contention of the Claimant, the reply notice of the

Respondent dated 21.02.2022 tantamount to acknowledgement of liability and thus

the claim is within time. Without admitting the claim averments, the Respondent

state that in Exhibits-C1 and C2 MOU dated 24.03.2018, the signature of the

Respondents are not found in self-serving payment entries in the 1 st page reverse

side and also the reply notice in Exhibit C5 was also sent on 22.11.2022 (i.e.)

after 3 years from the Exhibit C1 and C2 dated 24.03.2018. Under Section 18 of the

Limitation Act, the acknowledgement shall be made before the expiration of the

prescribed period of limitation so as to revive the claim. As the

Exhibit C5 reply notice was issued after 3 years, the reply notice does not in any way

save the limitation.

9. It is further submitted that the 2nd Respondent SARC Exports is a proprietary concern

of Mr. Albert Raj. But in the cause title, the SARC Export is shown as partnership

firm represented by Mr. Albert Raj. As the proprietary concern totally differs from

partnership firm, in view of the definitions under Section 2(a) and Section 4 of the

Partnership Act and also the partnership firm has the different entity, this Arbitral

Tribunal is not empowered to pass any award against a non-existing entity.

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Therefore, it is humbly prayed that this Hon’ble Tribunal may be pleased to

dismiss the claim petition with cost and thus render justice.

Dated at Chennai on this the 21st day of November, 2023.

Counsel for the Respondents

BEFORE THE LEARNED SOLE ARBITRATOR

Mr. R. PALANIANDAVAN,
ADVOCATE, AT CHENNAI

Arbitration O.P No. 128 of 2022

In the matter of Arbitration and Conciliation Act, 1996

as amended by the Arbitration and Conciliation
(Amendment) Act, 2021 (3 of 2021)
And

In the matter of Disputes BETWEEN (i) P. Ravindran,

(ii) M/s. SARC Exports, represented by its Partner Mr.
Albert Raj
AND

(iii) Ms. HemalathaKesavan under the Memorandum of

Understanding dated 24.03.2018

Ms. HemalathaKesavam,
D/o. L.S. Parthasarathy,
... Claimant.
Vs

Mr. P. Ravindran,
S/o. Parthasarathy and Another
…..Respondents

WRITTEN ARGUMENT FILED ON BEHALF OF

THE RESPONDENTS
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C.K.M. APPAJI-197/1993

Counsel Respondents
9444004318