Goodwill India Ltd. vs Gian Kumar And Anr.
1997 Latest Caselaw 723 Del

JUDGMENT

C.M. Nayar, J.

(1) The present petition is filed under Section 20 of the Indian Arbitration Act, 1940 for filing the Arbitration Agreement dated February 17,1988 in Court and for an order for reference of the disputes which have arisen between the parties to the named Arbitrator therein Shri Raj Paul Sagar, Advocate, Delhi or in case he is incapable to act for the reasons as stated to the sole arbitration of Shri Inderjit Gulati, Advocate.

(2) The petitioner is a Company incorporated under the Indian Companies Act, 1913 and has its registered office at Harsha Bhavan, E-13/29 Connaught Place, New Delhi-110001. It carries on the business of hire purchase of motor vehicles. It is further stated that Shri R.N. Gupta is the Managing Director of the petitioner Company and is duly authorised to sign and verify the pleadings and to institute the suit.

 (3) The petitioner Company purchased one "DYNA" Commercial vehicle with 90BHP Diesel Engine, 3290mm Wheel Base with 6 tyres and one spare wheel with tyre and tube and standard accessories as per the following:    (I)Model & Description : BU85R-MDXHT-3H Truck with High side Deck (Green) (ii) Engine No. 138-9008152 (iii) Chassis SI. No. BU85-8007169 (iv) Vehicle SI. No. 004B007178 (v) Regd. No. Hng 1121   

 (4) The vehicle was purchased from M/s. Dcm Toyota Limited, Ghaziabad vide their Invoice No. D/1485 dated February 17, 1988 for a sum ofRs.2,04,500.00 and the entire consideration price was paid by the petitioner vide cheque No. 027718 dated 18th March, 1988. The said vehicle was given under Hire Purchase Agreement dated February 17, 1988 to respondent No. 1 as hirer and respondent No. 2 signed the same as guarantor for and on behalf of respondent No. 1. The said agreement was entered into for a total sum of Rs. 2,50,000.00 which included the value of the vehicle for Rs. 2,04,500.00 , hire charges for 24 months. Rs. 42,000.00 and Rs.3,500.00 as insurance for second year making a total of Rs. 2,50,000.00 . It is submitted that respondent No, I paid a sum of Rs. 64,500.00 as initial payment leaving a balance of Rs. 1,85,500.00 to be paid in 24 monthly hires w.e.f. 8th March, 1988 as per Schedule    Bto the agreement in the following manner. (i) 11xRs. 7,600.00 each (ii) 1x11,100.00 (iii) 11xRs. 7.600.00 each (iv) 1xRs. 7,200.00   

 (5) The liability of the guarantor is alleged to be co-extensive with that of respondent No. 1 to the petitioner Company. The said respondent was given delivery/possession of the vehicle. The agreement is filed in Court and is exhibited as Public Witness PW1 /1. The averments made in paragraphs 5 of the petition may be reproduced as follows:    "The respondents after taking away the said vehicle under Hire Purchase Agreement dated 17.2.1988 failed and neglected to pay the hire instalments in terms of the said agreement and a sum of Rs. 64.324.00 is due and payable towards over due hire money and compensation charges for late payment. Besides the petitioner is entitled to a sum of Rs. 7,60,000.00 being double the monthly hire from the date of expiry of the period of agreement w.e.f. February, 1990 till the date of filing of the present proceedings as per Condition 5 of the said agreement. Hence the petitioner is entitled to a total sum of Rs.8,24,424.00 ".  

 (6) The petitioner consequently issued various notices and lastly got served a legal notice dated March 7,1994 on the respondents. On failure of respondent No. I to pay the money the petitioner asked for settlement of the disputes by way of arbitration as admittedly the disputes had arisen between the parties and are mentioned in paragraph 7 of the petition. The arbitration clause as referred to in the Agreement reads as follows:    "CLAUSEVl-(a). All disputes, differences, and/or claims, arising out of this Hire Purchase 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 Raj Paul Sagar, Advocate, Delhi or in case of his death, refusal, neglect, inability or incapability to act as an Arbitrator to the sole arbitration of Shri Inderjit Gulati Advocate, Delhi. The reference to the Arbitrators shall be within the clauses, terms and conditions of this agreement. The award given by the Arbitrator shall be final and binding on all the parties concerned. (b) It has been expressly explained by the owners to the hirer and to the guarantor that either of this aforementioned Arbitrators are usually appointed by the owners in the hire purchase agreements accepted by them and inspite of the information supplied to them, the said hirer and guarantor willingly agreed to the nomination of the said Arbitrator/s, and they shall not raise any objection against the appointment of any one of the Arbitrator/s on the ground that the Arbitrator/s is/are connected in any manner, with the owners. (e) Any party desirous of making a reference to the Arbitrator, shall give fifteen days. Registered Acknowledgement Due Notice of his intention to do so to the other party at his usual place of business or residence, or the place of their last notified address and the notice shall be deemed to have been served when it would ordinarily have been delivered by post. The notice sent by the Arbitrator to the parties by Registered Post, at the address mentioned in the Hire Purchase Agreement, will be considered sufficient service on the parties, whether such notice is received by them or not, or is refused, or is returned undelivered".  

 (7) Notice of the petition was issued to the respondents on 4th May, 1994. The respondents were duly served. I have heard learned Counsel for the parties and perused the documents on record. The learned Counsel for the respondents does not deny the execution of the arbitration agreement between the parties. 
 

 (8) In view of the above facts, this petition is allowed and the disputes which have arisen between the parties as referred to in the petition are hereby referred to the arbitration of Shri Raj Paul Sagar, Advocate in the manner as provided in Clause Vi of the Agreement. The Arbitrator shall render his Award within the statutory period. There will be no order as to costs.