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2004(2) JLJ 185
Dipak Misra and Shantanu Kemkar, JJ.
Brahan Dutt Shukla v. Ashok Leyland Finance
First Appeal No. 205 of 2001; against the judgment and decree passed by VI Additional District Judge, Jabalpur, in Civil Suit No.5-A of 2001;
Decided on 26.9.2003.
The respondent was noticed by the trial Court, and it filed its reply to the application under Order 39 Rules 1 and 2 of the Code of Civil Procedure and also filed an application raising preliminary objection about the maintainability of the suit. [Para 4
The trial Court after hearing the parties on the aforesaid applications i.e. application for grant of injunction as well as on the application about the maintainability of the suit, held that the appellant-plaintiff was not entitled for any interim relief. The learned trial Judge further held that the suit itself was not maintainable and accordingly dismissed the suit filed by the plaintiff-appellant. [Para 5
Held: The trial Court has rightly refused to entertain the suit for declaration and injunction holding it to be not maintainable, in view of the existence of arbitration clause in the hire purchase agreement. (2000) 4 SCC 539 followed. [Para 12
(2) Arbitration and Conciliation Act, 1996--Ss. 5, 8 and 34--dispute covered under the arbitration clause of the agreement of hire-purchase--to be referred to the arbitrator--civil suit not maintainable--allegation of making full payment--to be examined by arbitrator.
It is amply clear that the appellant has filed a suit about a dispute which is covered under the agreement of hire-purchase and as per clause 16 of the hire-purchase agreement entered into between the parties, the disputes must be referred to the Arbitrator. In view of sections 5 and 8 of the Act not only the civil Court but all the judicial authorities are restrained from intervening in the matters governed by Part I of the Arbitration and Conciliation Act, 1996 except where so provided in Part I. [Para 11
The appellant who is bound by the hire-purchase agreement is free to demonstrate before the Arbitrator as how he has paid the entire dues and if such evidence is produced before the Arbitrator, certainly the Arbitrator will look into it, because such dispute would also fall within the domain of the Arbitrator. If such disputes as has been sought to be raised by the appellant are allowed to be entertained by the civil Court, the very purpose of the arbitration agreement would be frustated. The entire scheme of the Act provides for challenge only to the arbitration award by taking recourse to section 34 of the Act but not otherwise. (2000) 4 SCC 539 followed. [Para 12
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Kemkar, J. -- 1. The appellant has filed this appeal under section 96 of the Code of Civil Procedure against the decree dated 15th March, 2001 passed by the learned VIth Additional District Judge, Jabalpur in Civil Suit No. 5-A/200l.
2. Brief facts necessary for disposal of this appeal are as follows:
The appellant filed a civil suit against the respondent for declaration and injunction praying for following reliefs:
"A. A decree be passed declaring that the arbitration proceeding be initiated by the defendant at Chennai is illegal and void and further a decree for permanent injunction be passed restraining the defendant taking any steps towards initiation of arbitration proceedings as mentioned in notice dated 16.12.2000.
B. Any other relief which being and appropriate under the circumstances of the case be passed along with cost of the suit."
3. By way of interim relief the appellant filed an application under Order 39 Rule 1 and 2 of the Code of Civil Procedure praying that the defendant-respondent be injuncted from initiating the arbitration proceedings as mentioned in the notice dated 16.12.2000 at Chennai against the plaintiff-appellant.
4. The respondent was noticed by the trial Court, and it filed its reply to the application under Order 39 Rules 1 and 2 of the Code of Civil Procedure and also filed an application raising preliminary objection about the maintainability of the suit.
5. The trial Court after hearing the parties on the aforesaid applications i.e. application for grant of injunction as well as on the application about the maintainability of the suit, held that the appellant-plaintiff was not entitled for any interim relief. The learned trial Judge further held that the suit itself was not maintainable and accordingly dismissed the suit filed by the plaintiff-appellant. Aggrieved I by the aforesaid order of dismissal of the suit, the appellant has filed the present appeal.
6. Having heard the learned counsel for the parties and upon perusal of the record, we are of the opinion that the appeal is sans merit.
7. Admittedly, the parties have entered into a hire-purchase agreement which stipulates a condition which is as under:
"Condition No. 6
16. It is agreed between the parties that in case of any dispute arising under this Agreement the same shall be referred to an Arbitrator at the option of the Owner. The Arbitrator shall be nominated by the Owner and the award of the Arbitrator shall be final and binding on all the parties concerned, including the Guarantor. The venue of such arbitration shall be at Chennai. It is further agreed that in the event of said Arbitrator dying or being unable to act for any reason; the owner shall be entitled to appoint in his place another Arbitrator who shall be entitled to resume the said arbitration proceedings from the stage at which it was left by his predeccessor."
8. The contention of the learned counsel for the appellant is that he being an unemployed graduate took loan for purchasing a truck from the respondent, the respondent seized the truck because he was not repaying loan amount which is impermissible in law. His further submission is that the notice for initiation of the arbitration proceedings at Chennai is illegal because the transaction was held at Jabalpur.
Further submission of the learned counsel is that even if there is any agreement for arbitration that became extinct no sooner the respondent then has taken the step for seizing and selling the truck of the appellant and hence for the purpose of taking further steps in the matter a fresh agreement or proceeding ought to have been initiated as there was novation of contract.
9. Shri Pratul Shandilya, learned counsel appearing on behalf of respondent has submitted that in view of the judgment of the Apex Court rendered in the case of P. Anand Gajapathi Raju and others v. P. V.G. Raju (Dead) and others (2000) 4 SCC 539 the suit filed by the appel1ant has rightly been held to be not maintainable by the Court belo
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