M.G.F. (India) Ltd. vs Lakshmi Chand Chopra
1997 Latest Caselaw 601 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 30th March, 1991 in Court and for an order for reference of the disputes between the parties to the named Arbitrator therein Shri Shashi Vansh Bahadur, Advocate. The petitioner is a Company incorporated under the Indian Companies Act, 1913 and has its registered office at 17-B, Asaf Ali Road, New Delhi-110002. It carries on the business of hire purchase of motor vehicles. It is further stated that Shri Arun Mitter is the constituted Attorney and also a Principal Officer of the petitioner company and is duly authorised to sign and verify the pleadings and to institute this suit.

(2) Respondent No. 1, it is stated, is in the business of sale of Auto Spare Parts and he entered into a Hire Purchase Agreement with the petitioner on March 30, 1991 for taking on Hire-purchase a vehicle being New Truck Model 1991 bearing Engine No. 692 D025 37137, Chassis No. 364 052 5 371 27 and Registration No. HR-42-0887. The petitioner on receipt of Proposal Form from respondent No. 1 as hirer and respondent No. 2 as guarantor hired the said Motor Vehicle to respondent No. 1 under the Hire Purchase Agreement bearing No. L-3846T12 dated March 30,1991 on the terms and conditions contained in the said agreement. The liability of the guarantor is alleged to be co-extensive with that of respondent no. 1 to the petitioner Company. The agreement stipulated that respondent No. 1 agreed to pay 34 hire instalments of Rs. 10,5000.00 each and the last one hire instalment of Rs. 9900.00 falling due on the 12th day of each month beginning from 12th June, 1991. Therefore the said respondent was given delivery/possession of the vehicle. The agreement is filed in Court today and is exhibited as P-1. The relevant clauses of the agreement are referred to in para 14 of the petition.

(3) It is further stated that respondent No. 1 paid only a sum of Rs. 1,16,000.00 towards, Hire Money as against a sum of Rs. 3,66,900.00 payable by him under the above said agreement upto the date on which the agreement was terminated by the petitioner by notice dated 20th January, 1995. A balance of Rs. 2,55,900.00 was due and payable towards Hire Money and a sum of Rs. 2 lacs as additional hire purchase charges was also payable. The respondents have made themselves liable for liquidated damages of Rs. 50,000.00 . The petitioner overall claimed a sum of Rs. 5,05,900.00 . The averments are made in paragraphs 9 of the petition which may be reproduced as follows: "9.That the respondent No. 1 has paid till date only a sum of Rs. 1,16,000.00 (Rupees one lac and sixteen thousand only) towards the monthly hire money and a sum of Rs. 2,55,900.00 (Rupees two lacs fifty five thousand and nine hundred only) is still due and recoverable as monthly hire money and also a sum of Rs. 2 lacs only (Rupees two lacs only) is still recoverable from the respondent towards Additional Hire Purchase Charges for delayed payment as per the petitioner's notice dated 20.1.1995 with further interest to be computed thereon till liquidated. Also the respondents have made themselves liable for liquidated damages of Rs. 50,000.00 (Rupees fifty thousand only) as per the notice terminating the hire dated 20.1.1995."

(4) The petitioner consequently issued notice dated 20th January, 1995 and on failure of respondent No. 1 to pay the money and to return the vehicle to the petitioner asked for settlement of the disputes by way of arbitration as admittedly the disputes had arisen between the parties. 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 Shashi Vansh Bahadur, Advocate, Delhi or in case of his death, refusal, neglect 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 is/are connected in any manner, with the owners. (c) Any party desirous of making a reference to the Arbitrator, shall give fifteen days' Registered Ack. 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."

(5) Notice of the petition was issued to the respondents on 19th April, 1995 and the learned Counsel for the petitioner has stated that the petitioner has already taken possession of the vehicle. 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.

(6) 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 Shashi Vansh Bahadur,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.

(7) I.A. No. 1246/96 The respondents have moved an application under Order Vi, Rules 4 and 5 read with Section 151, Code of Civil Procedure for issuance of an appropriate direction to the petitioner to furnish and supply the relevant and better particulars in respect of the vehicle in dispute which has been repossessed by the petitioner-Company. It will be open for the respondents to raise all the pleas as made in this application before the Arbitrator and even prefer their counter claims against the petitioner, if any I.A. is disposed of.