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madhu mittal (director)     05 March 2013

Separate arbitration, only for due installments, every time

A loan payable by 24 postdated cheques of equated monthly installment was given to Mr. X, the borrower, on the guarantee of Mr.Y. There is an arbitration clause also in guarantee deed as well as terms and conditions of loan. My question is:

Whether after dishonour of 3 or 4 cheques of borrower, arbitration proceeding regarding the amount of  these 3 or 4 dishonoured  cheques can be initiated against guarantor in addition to action u/s 138 against borrower and whenever other more cheques of borrower were dishonoured, another  arbitration proceeding can be initiated against guarantor in addition to action u/s 138 against borrower of this second set of dishonoured cheques and so on. As cause of action arise each time whenever cheques are dishonoured.



Learning

 3 Replies

Rajendra Shrivastava (advocate)     05 March 2013

yes it is right.

Adv k . mahesh (advocate)     07 March 2013

yes cause of action is same and the cheque are for submitted for montly instalment then you can file one case for all cheuqes by sending him one legal notice by mentioning all the cheque particulars in one notice 

R.K Nanda (Advocate)     25 March 2013

u can either go for arbitration or 138 proceedings and not both.


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