M.G.F. (India) Ltd. vs B.O.C. Properties Ltd. And ...
1997 Latest Caselaw 663 Del

JUDGMENT

Lokeshwar Prasad, J.

1. The petitioner named above, has filed the present petition under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') averring that the petitioner is a Company incorporated under the provisions of the Indian Companies Act, having its registered office at MGF House, 17-B, Asaf Ali Road, New Delhi and that Shri Rajiv Gupta, Director-in-Charge and constituted attorney of the petitioner-Company is duly authorised to sign and verify the present petition and to institute the present proceedings on behalf of the petitioner-Company.

2. It is averred that the petitioner-Company is carrying on the business of hire purchase and leasing at its registered office and in furtherance of its business gives on hire purchase and/or on lease equipments, vehicles etc., on usual terms and conditions incorporated in the Lease Agreements and/or Hire Purchase Agreements.

"It is further stated that at the request of respondent No. 1, the petitioner-Company purchased three Maruti Delux cars bearing Registration No. DNH 2411; DNH 3196 and DNH 3531; one Maruti Gypsy (Soft Top) bearing Registration No. DNH 2241; one Mahindra Jeep bearing Registration No. DNH 5043 and two Upkar Dumpers. The above said vehicles and Dumpers were leased out to respondent No. 1 under the Lease Agreement dated the 8th October, 1989 which was duly executed by respondent No. 1 as lessee and respondent No. 2 signed the said Lease Agreement as a guarantor. It is stated that in terms of the above said Lease Agreement, executed between the parties, the above said vehicles and Dumpers were provided by the petitioner-Company to the respondents for a period of three years w.e.f. 18th October, 1989 on payment of lease rentals besides the payment of insurance, other incidental expenses and additional lease rental charges for delayed payments @ two and a half per cent on the amount due under the agreement. The total value of the Lease Agreement was to the extent of Rs. 13,24,163/-."

3. It is further stated that in terms of the above said Lease Agreement, the petitioner is the absolute owner of the vehicles and the Dumpers and the respondents have no right, title or interest in the above said vehicles and Dumpers and were/are possessing the above said vehicles and Dumpers merely as bailees and/or trustees for and on behalf of the petitioner. It is alleged that in terms of the Lease Agreement, it is provided that on the expiry of the terms of the lease, the same could be renewed for a further period on terms and conditions to be mutually agreed between the parties. The right of the renewal, in terms of the agreement, is in the absolute discretion of the petitioner. It is further stated that upon the termination of the lease, either by afflux of time or otherwise, the respondents were liable to forthwith deliver or cause to be delivered the above said vehicles and Dampers to the petitioner at such place as may be intimately by the petitioner to the respondents.

4. It is averred that in terms of the Lease Agreement in case of default or breach of the terms and conditions of the Lease Agreement, the petitioner, without prejudice to his other rights is entitled to take possession of the said vehicles and Dumpers and is also entitled to claim liquidated damages, the arrears of monthly lease charges and also the monthly lease charges for the unexpired residue term of the Lease Agreement together with such other sums as may be payable by the respondents to the petitioner in terms of the Agreement. The above said Lease Agreement also contained an arbitration clause which reads as under :

"All disputes, differences and/or claims arising out of this Agreement shall be settled by arbitration in accordance with the provisions of the Indian Arbitration Act, 1940 or any statutory amendments thereof and shall be referred to the sole arbitration of Shri D. L. Bharghava, Advocate, Delhi or in case of his death, refusal neglect, incapability to act as an Arbitrator to the sole arbitration of Shri Inderjit Gulati, Advocate, Delhi. The reference to the arbitrator shall be within the clauses, terms and conditions of this agreement. The award given by the arbitrator shall be final and binding on both the parties."

5. It is alleged that after taking the delivery/possession of the above said vehicles and Dumpers respondent No. 1 committed breach of the terms and conditions of the Lease Agreement and has made payment of only Rs. 7,87,065/- towards lease rental and Rs. 19,000/- towards additional lease charges. It is further alleged that the respondent issued the following cheque towards payment of lease rentals, due under the agreement, which on presentation to the Banker were dishonoured :

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         Cheque No.              Date                    Amount
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    (1)   752322               19-1-1991               Rs. 36,785 
    (2)   752337               19-12-1990              Rs. 36,785 
    (3)   752339               19-2-1991               Rs. 36,785 
    (4)   752342               19-6-1991               Rs. 36,785 
    (5)   752346               19-10-1991              Rs. 36,785 
    (6)   752347               19-11-1991              Rs. 36,785 
    (7)   752348               19-12-1991              Rs. 36,785 
    (8)   752349               19-1-1992               Rs. 36,785 
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It is stated that the respondents though have been making payments by cheque and at times by demand drafts but they have failed and neglected to make the payments against the aforesaid dishonoured cheque inspite of repeated reminders. It is alleged that on the date of the filing of the present petition, the petitioner is entitled to a total sum of Rs. 7,35,700/- from the respondents. It is further stated that despite notices and reminders the respondents have failed to honour their commitment. It is stated that in view of the various defaults committed by the respondents, the following disputes/ differences have arisen between the parties which are within the ambit and scope of arbitration clause contained in the Lease Agreement and are liable to be referred to the named arbitrator :

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   (i)   Lease Rent outstanding                         Rs.  5,37,098.00 
  (ii)   Recovery of addl. lease charges for late
         payment                                        Rs.  6,28,596.00 
 (iii)   Further lease rental charges at the rate of 
         Rs. 36,785/- from the date of expiry of the
         lease Agreement on 19-9-1992 upto the date
         of the filing of the present petition
          Rs.  7,35,700.00 
  (iv)   Right to repossess the vehicles and dumpers
         by the petitioner as owners on account of
         breach of the agreement committed by the
         respondents and in default its value.          Rs. 10,00,000.00 
   (v)   Further payment of compensation charges for
         late payment from the date of filing of the
         present proceedings till the dues of the
         petitioners are paid. 
  (vi)   Damages caused to the vehicles and dumpers
         to be assessed after the same is surrendered
         to the petitioners by the respondents or
         repossessed through the Receiver appointed
         by this court. 
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6. It is stated that the petitioner-Company is the owner of the vehicles and Dumpers in question as per the Lease Agreement dated the 18th October, 1989. As per the case of the petitioner, the petitioner has to recover a total sum of Rs. 18,01,394/- towards lease rentals, additional lease rental for late payment/non payment and for wrongful retention of the vehicles and Dumpers after the expiry of the Lease Agreement. The petitioner as per the case of the petitioner is also entitled to the possession of the vehicles and Dumpers in question. It is prayed by the petitioner-Company that Lease Agreement dated the 18th October, 1989 be ordered to be filed in the court and all the disputes/differences mentioned in para 12 of the petition be referred to the named Arbitrator Shri D. L. Bhargava, Advocate, Delhi and the said arbitrator be directed to enter upon the reference and to give his award within the statutory period. The petitioner has also prayed for the costs of the proceedings.

7. Since the respondents did not appear despite publication of notice in the daily. 'The Statement' they were directed to be proceeded ex parte in the present proceedings by the learned predecessor of this court vide order dated the 22nd November, 1996.

8. The petitioner-Company, in support of its case, has adduced evidence by means of affidavit and has filed the affidavit of Shri Rajiv Gupta, Director-in-Charge and the constituted attorney of the petitioner-Company. Said Shri Rajiv Gupta, in his affidavit, filed by way of evidence, has fully supported the case of the petitioner-Company and has proved and exhibited all the material documents including the Lease Agreement containing the arbitration clause. The evidence of said Shri Rajiv Gupta, adduced by means of affidavit, has gone on record unrebutted and unchallenged which I see no reason to disbelieve.

9. From the ex parte evidence adduced by the petitioner-Company by way of affidavit of Shri Rajiv Gupta, the Director-in-Charge and the constituted attorney of the petitioner-Company which I see no reason to disbelieve, the case of the petitioner-Company, in my opinion, stands duly proved. I, consequently direct that the Lease Agreement dated the 18th October, 1989 be filed in the court and refer the disputes mentioned in para 12 of the petition to Shri D. L. Bhargava, Advocate, Delhi as the Sole Arbitrator for decision. The order is ex parte.

10. Petition allowed.