# In the matter of SREI Equipment Finance Ltd. vs. Whitefield Papermills Ltd And Anr.

> HC judgment dated 2025-02-24. Citation: TCN-2025-HC-00041. Srei Equipment Finance Limited filed an application for the appointment of an arbitrator in a…

- **Court:** HC
- **Order date:** 24 Feb 2025
- **Citation:** TCN-2025-HC-00041
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/srei-equipment-finance-ltd-vs-whitefield-papermills-ltd-and-anr-02fddc0f

## Summary

### Background

Srei Equipment Finance Limited filed an application for the appointment of an arbitrator in a dispute with Whitefield Papermills Ltd and Anr. The loan agreement between the parties, dated July 1, 2019, contained an arbitration clause. Srei sought arbitration based on this clause. Whitefield Papermills opposed the application, alleging fraud and misrepresentation in the agreement and transactions. They argued that the Reserve Bank of India had indicated the transactions were fraudulent before the NCLT, Kolkata Bench. Whitefield also contended that the agreement involved the creation of a mortgage over immovable property and was not registered, making it unsuitable for arbitration. The applicant argued that the agreement was valid and the disputes should be referred to

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## Facts

Srei Equipment Finance Limited and Whitefield Papermills Ltd and Anr. entered into a loan agreement dated July 1, 2019, which contained an arbitration clause (Clause 17). A dispute arose between the parties, and Srei sought to invoke the arbitration clause. Whitefield opposed the arbitration, claiming the agreement and transactions were fraudulent. They alleged that the Reserve Bank of India had indicated the transactions were fraudulent before the NCLT, Kolkata Bench. Whitefield also argued that the agreement involved the creation of a mortgage over immovable property and was not registered. Srei argued that the agreement was valid and the disputes should be referred to arbitration. The Reserve Bank of India approached the NCLT, Kolkata Bench with the allegations that

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## Issues and analysis

### Issue 1: Whether an arbitrator should be appointed given the existence of an arbitration agreement between …

**Ratio:** The Arbitration and Conciliation Act imposes an affirmative obligation on every judiciary

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**Reasoning:** The court noted that the existence of the arbitration agreement was not in dispute. The

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**Interpretation:** The court interpreted Section 11 of the Arbitration and Conciliation Act, 1996,

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**Application:** The court applied the ratio by acknowledging the existence of the arbitration

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## Parties

- **Judges:** Shampa S…
- **Appellants:** SREI Equipment…
- **Respondents:** Whitefield…
- **Other parties:** Kohi…
- **Advocates:** Jishnu…; Swatarup Ba…; +9 more

## Timeline

- **2019-07-01 — Loan Agreeme…**: Date of the loan agreement between Srei Equipment Finance Limited and Whitefield…
- **2023-05-25 — Notice Invoking…**: Date of the notice invoking arbitration,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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