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High Court Of Calcutta
S. K. SEN
RADHESHYAM KEDIA - Appellant
Versus
SRINIWAS PANDIT - Respondent
Award Case 228 Of 1983
Decided On : 08/26/1988
ARBITRATION - SCOPE OF ARBITRATION AGREEMENT - EXCEPTIONS - INTERPRETATION - ESTOPPEL - ACQUIESCENCE - VALIDITY OF AWARD - HIRE PURCHASE AGREEMENT.
Fact of the Case:
The petitioner and respondent No. 2 entered into a hire purchase agreement with the respondent No. 1. The petitioner guaranteed due performance and observance by the hirer of the terms and conditions of the agreement. A dispute arose between the parties and they agreed to refer the dispute to arbitration. The arbitrator passed an award in favor of the respondent No. 1. The petitioner filed an application to set aside the award on the ground that there was no scope for passing an award under the arbitration agreement as all the disputes had been excepted under the said arbitration clause.
Finding of the Court:
The court held that the arbitration agreement was valid and that the arbitrator had jurisdiction to proceed with the dispute. The court found that the petitioner had appeared before the arbitrator and contested the proceedings without raising any question as to jurisdiction. The court also found that the disputes referred to the arbitrator were clearly arbitrable and not included within the exception clause. The court further held that the petitioner was estopped from raising the objection of jurisdiction at this stage as he had participated in the arbitration proceedings without any protest.
Issues: 1. Whether the arbitration agreement was valid and the arbitrator had jurisdiction to proceed with the dispute? 2. Whether the disputes referred to the arbitrator were arbitrable? 3. Whether the petitioner was estopped from raising the objection of jurisdiction at this stage?
Ratio Decidendi: 1. The court held that the arbitration agreement was valid and that the arbitrator had jurisdiction to proceed with the dispute. The court found that the petitioner had appeared before the arbitrator and contested the proceedings without raising any question as to jurisdiction. The court also found that the disputes referred to the arbitrator were clearly arbitrable and not included within the exception clause. 2. The court held that the petitioner was estopped from raising the objection of jurisdiction at this stage as he had participated in the arbitration proceedings without any protest.
Final Decision: The court dismissed the petitioner's application to set aside the award.
( 1 ) THE only question for consideration in this application is what is the scope of arbitration agreement dt. 28th Jan. 1981 between R. S. Kedia and Sunil Kumar Dey and Srinivas Pandit. The relevant portion of the said arbitration agreement is set out hereinbelow :-"whereas the parties above mentioned have executed a Hire Purchase Agreement today with regard to the Motor Vehicle TDV of 315 H. P. having 6 cylinders and painted bearing No. 692 011 000606 on the Engine No. 3440-73094472 on the chasis registered under Police registration No. WGT 1674 complete with accessories. Year of Manufacture 1981. This agreement witnessed that we hereby agree that notwithstanding condition No. 15 of the said Agreement of Hire Purchase executed by us today all disputes differences claims arising out of the terms of the said Agreement of Hire Purchase with exception of the rights of the owners to seize the Article under all circumstances in terms of the Hire Purchase Agreement and all the disputes with regard to the claims under/on Demand Pronote executed by the hirer alone or both hirer and guarantor in favour of the owners in connection with the said Hire Purchase Agreement and all claims with regard to the compensation due to the instalments unpaid interest thereon, seizing expenses and charges, postage and telegrams, other incidental expenses and damages done to the vehicle in machinery, tyres and tubes etc. to the vehicle regarding which the said Hire Purchase Agreement is executed today shall be referred to the Sole Arbitration of Mr. G. P. Lath of 6 Old Post Office Street, Calcutta-1 under the provisions of Indian Arbitration Act 1940 or any statutory modifications thereof. The award and of the said arbitration shall be final and shall be binding on the parties to this agreement and the said Hire Purchase Agreement executed today provided that regarding the right of the owner to seize and take possession of their vehicle at any time under the provisions of the said Hire Purchase agreement, the decision of the owners shall be final and irrevocable and not subject to this reference to the Arbitrator. The fee of the Arbitrator in case of any such reference shall be 2% of the value of the claim of the claimant with a minimum of Rs. 25/ -. The Arbitrator shall be competent to decide the liability of the parties for the cost of the Arbitration. "
( 2 ) FOR the purpose of proper determination of the said question it is necessary to consider the facts culminating in this application. The material facts inter alia are that on or about 28th Jan. 1982 the petitioner and respondent No. 2 entered into a hire purchase agreement in writing with the respondent No. 1. In the said agreement the respondent No. 1 was termed as owner and the respondent No. 2 was termed as hirer and the petitioner was termed, as guarantor. The respondent No. 1 agreed to let on hire to the respondent No. 2 and agreed to take on hire from the respondent No. 1 one TDV motor vehicle bearing No. 692001000606 on the engine and No. 344073094472 an the chassis on inter alia the following terms and conditions :-a) the hirer would pay to the owner on the execution of the aforesaid agreement the sum of Rs. 34541. 88 p. as an initial payment by way of hire which shall become the absolute property of the owner and shall punctually pay to the owner at its address for the time being at Calcutta without previous demand 18 consecutive monthly rents or hires consisting of Rs. 9250/-each except as to the first of such payment would be made on 15th Mar. 1981 and each subsequent payment on or before 15th of every succeeding calendar month; b) the hirer would be at liberty at any time during the continuance of the said agreement to terminate the hiring by returning the said vehicle to the owner in Calcutta in the same order and condition in which it was delivered to the hirer (fair wear and tear excepted); c) the hirer would pay to the owner interest at the rate of 2% per mensem on
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