The Installment Supply (P) Ltd. vs Joginder Singh And Ors.
2001 Latest Caselaw 1639 Del

JUDGMENT

V.S. Aggarwal, J.

1. This is a petition filed under Section 20 of the Indian Arbitration Act, 1940 for filing of the arbitration agreement and for making a reference of the disputes between the parties to Shri Anand Kumar, Advocate.

2. The facts alleged are that petitioner (The Installment Supply (P) Ltd.) carriers on business of hire purchase of motor vehicles. Shri Krishan Bans Bahadur is the Manging Director of the petitioner. Joginder Singh as hirer and respondents 2 and 3 (Avtar Singh and Shiv Shankar) as guarantors made a proposal for hiring a Tata Diesel Truck Model 1984. The petitioner company accepted the proposal and the parties entered into a hire purchase agreement of 9th May, 1984. Respondent No. 1 agreed to take the vehicle on hire from the petitioner company and respondents 2 and 3 agreed to stand guarantee of respondent No. 1. In terms of hire purchase agreement respondent No. 1 agreed to pay 28 monthly Installment of hire money of Rs. 6000/- and one of Rs. 7000/- falling due on the 7th day of each month, the delivery of the vehicle was given.

3. In terms of the said hire purchase agreement respondents are stated to be jointly and severally bound to pay a sum of Rs. 1,10,266/- on account of overdue hire Installments and to return the said vehicle in the same condition. According to clause 3 of the hire purchase agreement all questions and matter in difference between the parties including the other disputes had to be referred to the sole arbitration of any of the advocates named anand Kumar, Sarveshwar Dayal and Ramesh Chand besides Virender Nath. Since disputes have arisen between the parties hence the present petition as such had been filed.

4. Written statement as filed by respondent No. 1 only. It was denied that respondent is liable to pay the alleged sum. Respondent No. 1 claims that he had paid the entire hire money along with interest. The petitioners have not correctly credited the amount. It is denied that petitioner was entitled to claim a sum of Rs. 68,767/- or that the balance as claimed was due. The arbitrator is stated to have been named by the petitioner which is of their own choice.

5. Respondents 2 and 3 failed to appear despite service and had been proceeded ex parte.

6. On 21st November, 1997 this court had framed the following issues:-

"1. Whether there is a valid arbitration agreement between the parties?

2. Relief.

7. After the issues were framed respondent No. 1 was reported to have died. No steps had been taken despite opportunity to implead the legal heirs of respondent namely Joginder Singh. It is patent that petition must be held to have abated. So far as respondents 2 and 3 are concerned, as referred to above, they had been proceeded ex parte. They had stood as guarantors of respondent No. 1. As per Clause 3 of the arbitration agreement if any disputes arise between the parties the same had to be referred to one of the named arbitrator. The said clause reads:-

"III. All questions and matters in difference between the parties hereto or their representatives touching the construction hereof or any act or thing in regard to the rights, duties and obligations or their enforcement or performance including the failure to pay a claim under the several hereinbefore recited clauses and/or arising out of or relating to this Agreement or to the subject matter hereof, shall, in accordance with the Indian Arbitration Act X of 1940 or any statutory modification thereof be referred to the sole arbitration of any one of the following:-

(1) Shri Anand Kumar (2) Sarveshwar Dayal (3) Shri Ramesh Chand (4) Shri Varinder Narain

or his nominee, at the option of the party raising the question or matter in difference. The said party shall give ten day's notice of his intention to make the reference to the other party or parties addressed to his or their usual place of business or residence of to his or their last notified address and the notice shall be deemed to have been served when it would have been delivered ordinarily. On the expiry of the said period of 10 days the party giving the notice may make a reference to the Arbitrator and it will not be necessary to make a joint submission or reference to the Arbitrator. The party raising the question or matter shall deposit Rs. 400/- as arbitration fee with the Arbitrator. The costs shall be in the discretion of the Arbitrator. The Award shall be final and binding on all the parties concerned. The provisions of Act X of 1940 or any statutory modification thereof shall apply to the arbitration and this submission shall not be determined by the death of the Hirer or of the Guarantor or the winding up of the owners. It has been expressly explained by the owners to the hirer and the guarantor that either of the aforementioned arbitrators is usually appointed an arbitrator in the hire purchase cases accepted by the owners, but in spite of this information supplied to them, the said Hirer and Guarantor have willingly agreed to the nomination of the said Arbitrator. The names of the four persons have, inconsequence, been filed in before the execution of this Agreement and no party shall be entitled to raise any objection against the appointment of the arbitrator on the ground of the Arbitrator being a person usually or invariably being appointed an Arbitrator in cases accepted by the owners or on the ground that the Arbitrator is connected in any manner with the owners."

8. The resume of the facts indicated above show that disputes had arisen relating to payments.

9. The argument that as to whether when respondent No. 1 had died, respondents 2 and 3 would be automatically discharged or not, need not be gone into. Necessarily since disputes had arisen it is a matter to be gone into by the arbitrator thus for the present this court is not expressing any, opinion in this regard.

10. For these reasons the arbitration agreement is filed and disputes between the remaining parties are referred to the sole arbitration of Anand Kumar. Parties are left to bear their own costs.