M.G.F.(India) Ltd. vs Pinkey Bhatia & Another
1998 Latest Caselaw 216 Del

ORDER

C.M.Nayar, J.

1. The present petition is filed under Section 20 of the Indian Arbitra-

tion Act, 1940 for filing the Arbitration Agreement dated June 19,1991 in Court and for passing an order for reference of the disputes between the parties to the named Arbitrator.

2. 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. Shri Rajiv Gupta is Director-in-charge and constituted attorney of the petitioner company and is conversant with the facts of the case and is authorised by the power of attorney executed in his favour by the Board of Directors to initiate, sign, verify, institute and file the present proceedings. The petitioner company is carrying on the business of hire purchase and leasing at its registered office and purchased one Maruti 1000 CC A/C Car bearing Engine No.140399, Chassis No.105555 and Registered No. DL-5C-2525 from M/s Pasco Automobiles vide their Invoice No.0701-55012-NA dated 4.5.1991 for a sum of Rs.3,77,006.81. Thereafter the petitioner company entered into a lease agreement dated 19th June, 1991 in respect of the said vehicle with respondent no.1 and respondent no.2 signed the said agreement as guarantor for and on behalf of respondent no.1. The terms and conditions of the agreement are reproduced in paragraph 5 of the petition which reads as follows:-

"5. That the terms and conditions of the said Lease Agreement inter alia provides that the said vehicle was taken by the lessee i.e. respondent No.1 on lease from the lessor i.e. petitioner on the terms and conditions mentioned in the said agreement for a term of three years commencing on 6th June 1991 and also agreed to pay to the petitioner during the said term monthly rental as provided in Schedule II of the said agreement @Rs.12800/- each except the last one being of Rs.10,500/-. The first payment was to be made on 6.6.1991 and all subsequent lease rentals were to be paid on or before the 6th day of each subsequent month. The total lease rental under the agreement was Rs.4,58,500/- payable in 36 lease rentals. Besides the petitioner was entitled as and by way of compensation charges for late payment of any lease rental @ 2-1/2 per mensem and on the amount due and remaining in arrears of any lease rent not paid on the due date besides other incidental expenses incurred on behalf of the lessee by the petitioner."

3. The petitioner company has stated in paragraph 10 that at the time of filing of the present proceedings the following amounts have fallen due under the lease agreement:-

""i) Arrears of Lease rentals Rs.2,32,900.00

ii) Compensation charges for late payment upto 26.7.94 Rs.1,07,932.00"

4. Therefore, it is contended that the disputes have arisen between the parties which are required to be referred to the named arbitrator in terms of the lease agreement. The disputes are referred to in paragraph 12 of the petition which may be reproduced as under:-

"12. That in view of the aforesaid circumstances, the following disputes and differences have arisen out of the said Lease Agreement between the petitioner and the respondents which are within the ambit of arbitration clause contained in the Lease Agreement and are referable to the named arbitrator-

i) Recovery of lease rent due Rs.2,32,900.00

ii) Compensation charges for late payment upto 26.7.94 Rs.1,07,932.00

iii) Right to repossess the Car by the petitioner as owners on account of breach of the agreement committed by the respondents and in default its value. Rs.4,00,000.00

iv) Further payment of compensation charges for late payment @ 2-1/2% from the date of filing of the present proceedings till the dues of the petitioners are paid.

v) Damages for breach of the lease agreement and to the Car committed by the respondents. Rs.2,00,000.00"

5. Notices were issued to the respondents who were served by publication in the 'Statesman' dated January 14, 1997. The citation has been placed on record. No one has appeared in Court on behalf of the respondents and they were directed to be proceeded against ex-parte vide Order dated August 14, 1997. Evidence by way of affidavit has been filed by Shri Rajiv Gupta, Director-in-charge and constituted attorney of the petitioner company who has reiterated the averments made in the petition. True copy of the certificate of incorporation of the petitioner company is marked as Exhibit PW-1/1. Copy of the power of attorney issued in favour of Mr.Rajiv Gupta is marked as Exhibit PW-1/2. Copy of the Invoice is marked as Exhibit PW-1/3. The original lease agreement is marked as Exhibit PW-1/4. The true copy of the statement of account is marked as Exhibit PW-1/5.

6. Clause 39 of the lease agreement contains the arbitration clause which reads as follows:-

"39.A. 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 sall be referred to the sole arbitration of Shri D.L.Bhargava, Advocate,Delhi or in case of his death, refusal, neglect, incapability to act as an Arbitrator to the sole arbitration of Sh.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 of this agreement.

B. It has been expressly explained by the LESSOR to the LESSEE that either of the aforesaid mentioned arbitrators are usually appointed by the LESSOR in the Lease Agreement accepted by them and inspite of the information supplied to them the said LESSEE has willingly agreed to the nomination of the said Arbitrator/s and he shall not raise any objection against the appointment of any one of the Arbitrator/s on the ground that the Arbitrator/s are connected in any manner with the LESSOR.

C. 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 Lease 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. I have heard learned counsel for the petitioner and perused the documents on record. In view of the above facts this petition is allowed and the disputes which have arisen between the parties are hereby referred to the arbitration of Shri D.L.Bhargava, Advocate in the manner as provided in clause 39 of the Agreement. The Arbitrator shall enter upon the reference within four weeks from today and render his Award within the statutory period. There will be no order as to costs.