The Motor & General Finance Ltd. vs Sunil Kumar M.B. And Anr.
2001 Latest Caselaw 1799 Del

JUDGMENT

V.S. Aggarwal, J.

1. The present suit has been filed by the Motor & General Finance Limited under Section 20 of the Arbitration Act, 1940. It seeks the arbitration agreement to be filed and for making a reference to the sole arbitrator Shri Inderjit Gulati, Advocate.

2. The facts alleged are that plaintiff is a duly incorporated company. It carries on the business of hire purchase of motor vehicles. Shri A.K.Ahluwalia is the general attorney and is authorised to sign and verify the pleadings. On 30.6.1986, defendant No.1, as Hirer and defendant No.2 as a Guarantor, made a proposal to the plaintiff for hiring a Tata Diesel Truck Model 1986. The plaintiff company accepted the proposal. Defendants No. 1 and 2 entered into a Hire Purchase Agreement, whereby defendant No.1 agreed to take the vehicle on hire from the plaintiff and defendant No.2 stood as a guarantor of defendant No.1. The liability of the guarantor in terms of the agreement was co-extensive with that of defendant No.1.

3. In terms of the Hire Purchase Agreement, defendant No.1 agreed to pay 45 Installments of Hire money i.e. 27 Installments of Rs. 5,700/- and the remaining Installments of,600/- each. The same had to be paid on 7th of each month. It was agreed between the parties that in case of differences between the parties, they shall be settled by referring the matter to the sole arbitration of Shri Inderjit Gulati and failing him Shri Vikramjit Sen. The plaintiff claims that the amounts have not been paid. The disputes have arisen and, therefore, the arbitration agreement should be filed and reference should be made to the arbitrator.

4. In the written statement filed, defendant No.1 contested the suit. It was pleaded that the vehicle in question was originally purchased by one Y. Rajendran, who was the agent of Plaintiff company under Hire Purchase Agreement. As per the said agreement, he obtained an amount of Rs. 1,70,000/- from the plaintiff company for purchase of the vehicle. He purchased a Tata Diesel Bus, and registered the same as KRA-6429 before the Quilon Regional Transport Office. Defendant No.1 approached the authorised representative of the plaintiff at Quilon. The representative made him to believe that he purchases the vehicle No. KRA 6429. The same would be transferred to defendant No.1 with the consent of the plaintiff and he will have to pay Rs.1,60,000/- with interest. The branch manager of plaintiff obtained the signatures of the respondent on certain blank printed forms. Defendant No.1 paid Rs.2.00 lakhs to Shri Rajendran. Later plaintiff asked defendant No.1 to pay Rs. 11,400/- to company as part of the Installments. The plaintiff, vide their letter of 11.6.1986 informed the defendant No.1 that transaction was being transferred in his favor. He was required to pay the specified amount in Installments. He denied that there is any agreement to pay flat rate of interest. The amount of Rs.2,37,750/- is stated to have already been paid. He further contends that there was no arbitration agreement and papers were signed from respondent No.1 when they were blank.

5. On 11.4.1986, this court had framed the following issues:-

1. Whether the petition has been instituted, signed and verified by an authorised person on behalf of the petitioner company? OPP

2. Whether the defendant had signed the documents when they were blank? If so, to what effect?

3. Whether there is an arbitration agreement between the parties? If so, to what effect?

4. To what relief, if any, is the plaintiff entitled?

6. Subsequently, there was no appearance on behalf of the defendants and they were proceeded ex parte on 28.8.1998. The plaintiff was permitted to lead evidence by way of affidavits and documents have since been exhibited.

ISSUE No.1:-

7. The plaintiff produced the General Power of Attorney in favor of Shri A.K.Ahluwalia. Shri Ahluwalia has even filed his affidavit to state that he is the authorised power of attorney of the plaintiff and has been authorised to file the present suit and sign and verify the plaint. The original even has been to sign and verify the plaint, therefore, it must be held that the plaint has been instituted, signed and verified by a duly authorised person.

ISSUE No.2:-

8. The onus of this issue was on the defendants. There is no evidence, which has been produced, and therefore, there is nothing to indicate that the signature of the defendants were obtained on blank papers. The issue is decided against the defendants.

ISSUE No.3:-

9. The affidavit of Shri A.K.Ahluwalia indicates that the agreement had been signed between the parties, which has been proved on the record. The copy of the agreement has been proved as Ex.PW-2/1. It is purported to have been signed by the parties. Perusal of the same clearly shows that under Clause 6, it has been agreed that all disputes and differences shall be referred to the sole arbitration of Shri Inderjit Gulati, Advocate. In the present case as is apparent from the nature of the pleadings and evidence on record, disputes have arisen between the parties about the amount, claimed by the plaintiff, referred to in the plaint and consequently it must be held that there is a valid arbitration agreement between the parties and the matter is required to be referred to the sole arbitrator.

ISSUE No.4:-

10. For the reasons given above, the petition is allowed. Arbitration agreement is filed and reference is made to Shri Inderjit Gulati, Advocate to go into the disputes referred to in the plaint.