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2016 Supreme(All) 260

ALLAHABAD HIGH COURT
BEFORE : SUNEET KUMAR, J.
BALLABH LAL ....Petitioner
Versus
KUKKOO MOTORS FINANCE PVT. LTD. AND ANOTHER ....Respondents
(Civil Misc. Writ Petition No. 1101 of 2016, decided on 23rd February, 2016)

Advocates:
Counsel :
Dinesh Kumar for the Petitioner; S.C. for the Respondents..

Headnote:Arbitration and Conciliation Act, 1996 – Sections 8 and 11(6) – Agreement – Dispute – Referring of matter to arbitrator – Since there was an agreement between the parties, to refer dispute or differences arising out of agreement to arbitrator – It would be obligatory for Court to refer parties to arbitration in terms of agreement – Court below justified in referring parties to seek redressal under Arbitration Act as per arbitration clause. [Paras 14 to 16]

       Result; Petition Allowed.

JUDGMENT

Hon’ble Suneet Kumar, J.—The plaintiff/applicant has approached this Court assailing the orders passed by the Courts below purportedly under Section 8 of the Arbitration and Conciliation Act, 1996, whereby, the parties have been referred to the Arbitrator in terms of the agreement.

2. The facts would reveal that the applicant instituted a suit being Original Suit No. 594 of 1998 (Sri Ballabh v. Kukkoo Motors Finance Pvt. Ltd) for permanent injunction restraining the respondent-finance company from transferring the vehicle, as well as, seeking mandatory injunction to return the vehicle to the applicant. The applicant purchased a truck after obtaining loan of Rs. 1,50,000/- from the respondent-finance company, the applicant defaulted, thereafter, upon termination of the Hire-Purchase agreement the vehicle was seized and auctioned by the respondent-finance company. It is averred in the plaint that the respondent- finance company had taken signatures on blank papers, further, the applicant had not signed any agreement with the respondent-company.

3. The respondent appeared and filed an application under Section 8 contending that the parties be referred to arbitration.

4. Initially, the trial Court rejected the application filed under Section 8, however, in revision, the order was reversed and the matter remanded. Upon remand, the trial Court considering the material available on record and the agreement allowed Section 8 application and directed the parties to submit name of the Arbitrators under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). The revisional Court affirmed the order. Aggrieved, the applicant is assailing the revisional order dated 29 August 2009, as well as, review order dated 10 December 2015 passed by the Additional District Judge, Court No. 2, Mathura in Civil Misc. Case No. 15 of 2010 (Ballabh Lal v. Kukkoo Motors Finance Pvt. Ltd).

5. The revisional Court in the impugned order categorically noted that there is an agreement between the parties, whereon, the applicant appended his signature, therefore, was of the opinion that the trial Court committed no error in referring the parties to settle the dispute through an arbitrator. However, the revisional Court declined to interfere with the consequential order passed by the trial Court directing the parties to submit the name of the arbitrators under Section 11 of the Act. The applicant preferred a review application contending that the case cited by the revisional Court has since been overruled by the Supreme Court, therefore, an error apparent on the face of the record.

6. Be that as it may, learned counsel for the applicant would not dispute that the applicant approached the respondent-finance company to obtain loan which was duly sanctioned and released to the applicant, thereafter, the applicant purchased the vehicle which was on hire purchase owned by the respondent-finance company. It is sought to be urged that certain blank papers and document were got signed from the applicant by the finance company, of which, he had no knowledge. The averments in the plaint would neither allege fraud or misrepresentation on behalf of the respondent-finance company nor would reflect that the dispute that is being sought to be raised is beyond the scope of the arbitration agreement. The dispute, inter se, parties primarily relates to non payment of the loan and the consequential action taken by the respondent-finance company to recover the dues by seizing the vehicle and thereafter auctioning it.

7. In these circumstances, the Courts below were justified in referring the parties to seek arbitration as per arbitration clause. The second part of the order passed by the trial Court directing the parties to suggest name of arbitrators under Section 11 of the Act, in my opinion, was without jurisdiction.

8. It has been settled by the Constitution Bench (Seven Judges) of Supreme Court in S.B.P. and Company v. Patel Engineering Limited and ano















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