Bombay HC: Malhotra's Forgery Claims Dismissed in SBI Global Dispute

Summary: Sanjeev Malhotra's attempt to overturn a decision made by an arbitration panel in favor of SBI Global Factors Ltd. was dismissed by the Bombay High Court. The court found no merit in Malhotra's objections, which included claims of forgery and procedural delays.

Background of the Case

Sanjeev Malhotra, once a director at Rayalseema Commodities Ltd., was involved in a legal dispute with SBI Global Factors Ltd. over trade finance facilities. The conflict started when SBI Global sought recovery of over Rs. 43 crores, claiming Rayalseema defaulted on their credit facilities.

The Arbitral Award

On April 4, 2024, an arbitration panel decided that Malhotra and Rayalseema must together pay SBI Global about Rs. 43 crores, along with 18% interest from April 1, 2011. The decision also required them to fulfill specific obligations under a 2007 agreement.

Malhotra's Objections

Malhotra challenged the decision under a section of the Arbitration Act, arguing:

1. Lack of Proof of Debt: Malhotra claimed SBI Global failed to show there was an existing debt.

2. Delay in Award: He pointed out a significant delay in the decision being announced.

3. Casual Dismissal of Forgery Claims: Malhotra alleged that his signature on the guarantee was forged.

4. Unresolved Interim Applications: He argued that several temporary applications were not addressed.

Court's Analysis

Judge Sandeep V. Marne dismissed Malhotra's petition, stating:

• Debt Admission: The court noted that Rayalseema "almost admitted" the claim, and the debt was sufficiently proven.

• Delay Justification: The delay in the decision was partly due to Malhotra's own legal actions, including multiple applications.

• Forgery Allegations: The forgery claim was considered an afterthought, lacking strong evidence.

• Interim Applications: The court found these applications either resolved or not important to the final decision.

The court upheld the decision made by the arbitration panel, emphasizing that the objections lacked merit and were attempts to avoid financial responsibility. Although the petition was dismissed, no additional costs were imposed on Malhotra due to existing financial penalties.