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2001 Supreme(AP) 1351

Andhra Pradesh High Court
Judges : B.PRAKASH RAO
Lakshmi General Finance Ltd. - Appellant
Versus
Anantha Raja Rao - Respondent
CRP.Nos.5580 & 5581/98
Decided On : 11-02-01
Advocates Appeared :
Mr.Prabhakar Sripada, Mr.S. Srinivasvarma

Headnote:ARBITRATION AND CONCILIA-TION ACT, Sec16(1) - Plaintiff purchased vehicle availing finance from defendant - Suit for declaration of ownership of vehicle and to refund excess amount paid and to deliver vehicle and also for damages - Defendant contends that plaintiff committed default in payment and dispute has to be referred to arbitrator as per arbitration clause in agreement and that suit is not maintainable - Plaintiff denying very existence of agreement and that arbitrator cannot give finding with regard to fabrication of document and alleged fraud - Trial court dismissing application holding that arbitrator cannot give finding with regard to fabrication of document - u/S16 of new Act, arbitrator has got ampel power to go into all questions including as to existence and validity of agreement - Order of trial court rejecting application of defendant to refer dispute to arbitrator - Illegal - Parties can move arbitrator for interim directions with regard to custody of vehicle - Revisions are allowed

B. PRAKASH RAO, J.

( 1 ) THE petitioner in these two revisions is the defendant, who is aggrieved against the orders in LA. No. 1180 of 1998 dated 13-10-1998 and I. A. No. 1101 of 1998 dated 27-10-1998 in O. S. No. 316 of 1998 on the file of the III Additional Senior Civil Judge at vijayawada.

( 2 ) THE respondent-plaintiff filed the suit for declaration that he is the absolute owner of the vehicle, a lorry No. AP 16u 8328 and for furnishing the accounts, to refund the amount of Rs. 79,000/- paid excess, to deliver the vehicle and. to pay damages.

( 3 ) ACCORDING to the plaintiff, on hisapproaching the defendant for finance for purchase of two lorries, the defendant advanced Rs. 5,00,000/- for two vehicles and obtained various signatures on blank printed and stamp papers. The amount is repayable in 35 instalments, which was reduced to 23 instalments. The case of the plaintiff is that he has paid all the instalments and there is excess payment of rs. 79,000/ -. Hence the suit.

( 4 ) IN LA. No. 1180 of 1998 filed under Section 8 of the Arbitration and Conciliation act, 1996, the petitioner-defendant sought reference of the dispute to arbitration as per the arbitration clause contained in the agreement dated 30-7-1997. The case of the petitioner is that as per the request, the plaintiff was given finance and hire purchase agreement dated 22-7-1995 was entered into, as O. V. 4256 for Rs. 7,49,000/- repayable in 35 monthly instalments for the vehicle No. AP 16u 8328. Later, on his own request, a supplementary agreement dated 20-10-1995 was entered into reducing the monthly instalments from 35 to 24. Yet, he committed default in repayment of instalments. Again, at his instance, agreeing for refinance, another agreement dated 30-7-1997 was entered into viz. , R. V. 1275 for rs. 5,49,000/ -. This was assigned in favour of m/s. Express Roadways Pvt. Ltd. , on the request of the plaintiff as per assignment agreement dated 29-8-1997. Except making payment for one instalment, the plaintiff committed default. The plaintiff suppressed all these transactions and in view of default, he cannot claim ownership of vehicle till all the payments are made. The petitioner- defendant has already repossessed the vehicle on 30-6-1998. The plaintiff is due a sum of Rs. 5,25,095/ -. As per the arbitration clause No. 15 in the agreement, the dispute has to be referred to arbitration and the suit, as filed, is not maintainable.

( 5 ) IN the other application in LA. No. 1101 of 1998 filed under Order 39 Rules 6 and 7 and Order 26 Rules 9 and 10 C. P. C. , the plaintiff sought for appointment of an advocate-Commissioner to seize the said vehicle A. P 16u 8328 on the ground that the defendant has illegally and unauthorisedly taken away the vehicle from Itchapuram and now it is in its custody at visakhapatnam.

( 6 ) OPPOSING the application of the defendant and in support of his own application, the case of the plaintiff is that the allegation as to refinancing and later agreements including assignment to m/s. Express Roadways Pvt. Ltd. , are false and further that the defendant obtained his signatures on several blank papers and printed forms. As there is no due execution, the arbitration clause is not binding on him. Further, no default is committed by him and the defendant has no right to take possession of the vehicle.

( 7 ) ON a consideration of the rival submissions, the Court below while dismissing both the applications observed in la. No. 1101 of 1998 that the defendant shall keep the vehicle in safe custody without causing any damage till the disposal of the suit. The Court below sought to proceed mainly on the ground that the plaintiff is not admitting the execution of the agreements and, therefore, the very existence of the agreements is in dispute between the parties and it may not be possible for the arbitrator to give a finding with regard to the fabrication of the documents and the alleged fraud pleaded by the respondent-plaintiff.

( 8 ) SRI Prab















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