2023 (2) TMI 327

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....ile, the petitioner alleges that the first respondent placed on its website incorrect information provided by the second respondent in respect of the alleged default by the petitioner in respect of loan facilities extended by the second respondent to the borrower. In these circumstances, the petitioner seeks constitution of an arbitral tribunal in terms of Section 18 of the Credit Information Companies (Regulation) Act 2005 (the Act of 2005). The petitioner points out that by communication of 19.07.2021, the petitioner addressed all the three respondents herein and informed them that unless necessary correction is made in respect of the incorrect information, an arbitral tribunal should be constituted in terms of Section 18 of the Act of 2005. The present petition is filed in these facts and circumstances. 2. The petition is opposed by the respondents herein on multiple grounds. In order to underscore that such objections may be entertained in a petition under Section 11 of the Arbitration and Conciliation Act,1996(the Arbitration Act), learned counsel for the second respondent relied on Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1 and Indian Oil Corporation Limited ....

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....he judgment of the Calcutta High Court and an appeal is pending against the order passed in O.A.No.360 of 2008, which were relied upon by learned counsel for the petitioner. Both learned counsel for the second and third respondents contend that arbitration is provided for under Section 18 only if the dispute relates to the business of credit information. In order to decide whether this objection is valid, it is necessary to set out under Section 18(1), which reads as under: "18.Settlement of dispute:--(1) Notwithstanding anything contained in any law for the time being in force, if any dispute arises amongst, credit information companies, credit institutions, borrowers and clients on matters relating to business of credit information and for which no remedy has been provided under this Act, such disputes shall be settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996 (26 of 1996), as if the parties to the dispute have consented in writing for determination of such dispute by conciliation or arbitration and provisions of that Act shall apply accordingly." 4. On examining the text of Section 18, it is clear that it applie....

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.... collation of credit information, the provision of such information to its users and the provision of credit scores. Under Section 19 of the Act of 2005, both the credit information company and the credit institution are required to ensure that the data relating to the credit information maintained by them is accurate and complete. Section 19 reads as under: "19.Accuracy and security of credit information:-- A credit information company or credit institution or specified user, as the case may be, in possession or control of credit information, shall take such steps (including security safeguards) as may be prescribed, to ensure that the data relating to the credit information maintained by them is accurate, complete, duly protected against any loss or unauthorised access or use or unauthorised disclosure thereof." 6. When Sections 14 and 19 are read together, it appears that a dispute between a borrower or client, on the one hand, and the credit information company and credit institution, on the other, in relation to the accuracy or completeness of the credit information collected, processed or collated by them would qualify as a dispute relating to the business of cred....

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....ion or proceeding pending in relation to any debt or to the initiation of any legal action or proceeding in respect of any debt. By referring to a writ petition filed in the Bombay High Court by the petitioner, he contended that the NCLT proceedings were not interfered with. He also referred to a resolution plan submitted by the petitioner before the NCLT and alleged suppression of material facts. By relying on Sukanya Holdings Private Limited v. Jayesh H.Pandya, (2003)5 SCC 531, learned counsel raised the last related contention that the dispute pending before the NCLT and the dispute proposed to be raised before the arbitral tribunal cannot be bifurcated. 10. In order to test the validity of the contention on the interim moratorium, it is necessary to extract Section 96(1) of the IBC. The said provision is as under: 96. (1) When an application is filed under section 94 or section 95- (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and (b) during the interim-moratorium period- (i) any legal action or proceeding pen....