The Writ Petition is filed seeking mainly the following relief:

"To set aside/reverse the order dated 17.11.2008, passed by the learned Court of the Munsiff of Hosdurg in the Interlocutory Application No.3475 of 2008 in Original Suit No.233 of 2008, titled as "Mr.Vinod Kumar V. vs. M/s.TML Financial Services Ltd." and may consequently be pleased to allow the application filed by the petitioner under Section 8 of the Arbitration and Conciliation Act, 1996, thereby referring the matter to arbitration, to be conducted by the Arbitrator."

2. Petitioner is the defendant in O.S.No.233 of 2008 on the file of the Munsiff Court, Hosdurg, and the respondent, the plaintiff. Suit is one for damages for a sum of Rs.50,000/- and also for a declaration that the plaintiff is not liable to repay the outstanding instalments defaulted on the loan availed from the defendant for the purchase of a vehicle in view of its illegal seizure by the defendant. P3 is copy of the plaint in the above suit. Petitioner/defendant, on appearance, moved an application for stay of the suit contending that the parties are governed by an arbitration agreement, and therefore, all disputes and differences are to be resolved only by a reference to arbitration. P4 is the copy of that application. Arbitration agreement entered between the parties was also produced with that petition. P1 is the copy of that agreement. Respondent/plaintiff filed a counter that the dispute presented before the court for adjudication does not fall under the arbitration agreement, and therefore, Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') has no application to the case. The learned Munsiff, after hearing both sides, upheld the contention raised by the respondent/plaintiff and dismissed P4 petition. P5 is the copy of that order. Propriety and correctness of that order is challenged in the Writ Petition invoking the supervisory jurisdiction vested with this court under Article 227 of the Constitution of India.

3. I heard the learned counsel on both sides. Learned counsel for the petitioner submitted that the petitioner is a non banking financial company engaged in the business of finance. Since the respondent had defaulted in payment of the instalments due for the financial assistance provided by the petitioner/company to purchase a vehicle in terms of the hire purchase agreement under which the vehicle stood hypothecated to the petitioner/company, with the assistance of the police, the vehicle was seized and later, it was released by the police to the petitioner/company under P2 kachit. The agreement executed by the parties for providing financial assistance to the defendant to purchase the vehicle, copy of which is produced as P1, it is submitted clearly spell out that the disputes and differences, if any, between them in respect of the loan arrangement have to be resolved by way of arbitration. P3 suit filed by the respondent/plaintiff claiming damages and also for declaration that he is not liable to pay the defaulted instalments of the loan, according to the learned counsel, is not maintainable, and the civil court has no jurisdiction to adjudicate on the dispute canvassed, as such disputes have to be resolved only by the process of arbitration as provided under the agreement between the parties. On the other hand, learned counsel for the respondent/plaintiff contended damages is claimed in view of the illegal seizure of the vehicle and that is not a matter falling under dispute or difference as covered by the arbitration agreement. The arbitration agreement entered between the parties in respect of the loan arrangement cannot oust the jurisdiction of the civil court to entertain the suit for damages and adjudicate the issues involved thereunder when the suit claim is based on seizure of the plaintiff's vehicle illegally, submits the learned counsel. Civil court has competency to go into the question whether the dispute is covere