Tata Motors Finance Ltd. vs Laxmi Kant Tiwari
2014 Latest Caselaw 4663 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          CM(M) No.187/2011

%                                                      19th September, 2014

TATA MOTORS FINANCE LTD.                                 ......Petitioner
                 Through:                 Ms. Pallavi Deepika, Advocate.



                           VERSUS

LAXMI KANT TIWARI                                       ...... Respondent

                           Through:      None.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This petition under Article 227 of the Constitution of India is filed

challenging the impugned order of the court below dated 7.2.2011 which has

dismissed the application filed by the petitioner/defendant under Section 8 of

the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act').

2. The respondent/plaintiff filed the subject suit for mandatory and

permanent injunction seeking the following reliefs:-

"It is, therefore, most respectfully prayed that this Hon'ble Court may kindly be pleased to:

(a) pass a decree of mandatory injunction in favour of the plaintiff and against the defendant, thereby directing the defendant to release the vehicle/care of the plaintiff i.e. Tata Indica car bearing registration no.DL-1Y-B-3515, forthwith.

(b) pass a decree of permanent injunction in favour of the plaintiff and against the defendant, thereby restraining the defendant, its associates, representatives, agents, employees, servants etc. from selling/auctioning/creating third party charge in the abovesaid vehicle/car of the plaintiff i.e. Tata Indica car bearing registration no.DL- 1Y-B-3515.

(c) Award the cost of the suit in favour of the plaintiff and against the defendant.

(d) Pass any other relief(s) in favour of the plaintiff and against the defendant, which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case as well as in the interest of justice."

3. The petitioner/defendant-company is a financer and it financed the

subject vehicle i.e Tata Indica car bearing registration no.DL-1Y-B-3515 for

the respondent/plaintiff. The petitioner/defendant paid the amount of Rs.2.75

lacs as loan and the respondent/plaintiff executed the loan agreement dated

04.02.2008 to repay the loan amount of Rs.2.75 lacs in 36 instalments with the

first instalment being for the amount of Rs.9,401/- and the balance instalments

were to be of the amounts of Rs.9,413/-. Respondent/plaintiff defaulted in

making payment of the instalments and therefore the petitioner/defendant took

forcible possession of the hypothecated vehicle from the respondent/plaintiff.

It is against this action of the petitioner/defendant that the subject suit came to

be filed.

4. In the admitted loan agreement dated 4.2.2008, there is the

following arbitration clause:-

"23.ARBITRATION All disputes, differences and/or claims arising out of this Loan Agreement or as to the construction, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to the held in Mumbai in accordance with the Arbitration and Conciliation Act 1996, or any statutory amendments thereof and shall be referred to a person to be appointed by the Lender. In the event of death, refusal, neglect, inability, or incapability of the person so appointed to act as an Arbitrator, the Lender may appoint a new arbitrator. The award of the arbitrator shall be final and binding on all parties concerned."

5. The aforesaid arbitration clause is comprehensive because all

disputes, differences and claims arising out of the loan agreement with respect

to the vehicle in question had to be referred to arbitration. Such a

comprehensive clause clearly includes the disputes as to validity or otherwise

of taking over by the petitioner/defendant of the hypothecated vehicle. Trial

court has relied upon the judgment of Kerala High Court reported as M/s. TML

Finance Services Ltd. Vs. Mr. Vinod Kumar, 2010 (1) KLT 209 which held

that arbitration clause will not prevent the civil right of a person who has

received the loan and hypothecated the vehicle from seeking compensation and

damages for illegal taking over of possession. However, I note that the present,

subject suit which is filed by the respondent/plaintiff is not a suit for damages

and compensation but is only against the action of alleged illegal taking over

of the possession of the hypothecated vehicle and therefore the judgment in the

case of M/s. TML Finance Services Ltd. (supra) is distinguishable. The

subject matter of the present case therefore clearly falls within the arbitration

clause.

6. The second reason for dismissing of the Section 8 application of

the Act by the trial court was that the petitioner/defendant has only filed a

certified true copy of the agreement and which according to the trial court

cannot be said to be a certified copy as required in law. I have failed to

understand this reasoning of the trial court because the certified true copy is

very much the certified copy of the loan agreement and it cannot be held by the

trial court that a certified true copy is not a certified copy of the arbitration

agreement. A certified copy is used in the sense of an authenticated copy of the

arbitration agreement and once authentication to be done by the relevant person

who has seen the original arbitration agreement has been done on behalf of the

petitioner, then, there is on record that certified copy of the arbitration clause.

Hence, trial court was not justified in holding that the certified true copy of the

loan agreement is not the certified copy as required by law.

7. In view of the above, the petition is allowed. Impugned order

dated 7.2.2011 is set aside. Petitioner's application under Section 8 of the Act

will stand allowed. Parties are left to bear their own costs.

SEPTEMBER 19, 2014                                     VALMIKI J. MEHTA, J
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