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HIGH COURT OF TRIPURA, AGARTALA
DEEPAK GUPTA, J.
Tata Motors Finance Limited – Petitioner
Versus
Manoj Das – Respondents
CRP No. 86 of 2014
Decided On : 18.03.2015
Arbitration - Hire Purchase Agreement - Arbitration and Conciliation Act, 1996, Section 5 & 8 - 23.1 All disputes, differences and/or claims arising out of this Loan Agreement or as to the construction, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in Mumbai in accordance with the Arbitration and Conciliation Act, 1996, or any statutory amendments thereof and shall be referred to a person to be appointed by the lender. In the event of death, refusal, neglect, inability, or incapability of the person so appointed to act as an arbitrator, the Lender may appoint a new arbitrator. The award of the arbitrator shall be final and binding on all parties concerned.
Fact of the Case:
The plaintiff purchased a vehicle under hire purchase scheme from M/s. Rajarshi Motors Private Ltd. and financed by obtaining a loan from the petitioner-Tata Motors Finance Company Ltd. The plaintiff alleged repayment of the entire loan amount and sought a declaration and clearance certificate. The defendant No.1 filed an application for arbitration under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The court found that the dispute was covered by the arbitration clause and should have been referred to arbitration. The court appointed an arbitrator and directed the parties to submit their claims and counter-claims for arbitration.
Issues: The main issue was whether the dispute covered by the arbitration agreement should be referred to arbitration or heard by the Civil Court.
Ratio Decidendi: The court held that disputes covered by an arbitration agreement should be referred to arbitration as per the Arbitration and Conciliation Act, 1996. The court also found the arbitration clause specifying Mumbai as the venue to be void as no part of the cause of action had arisen in Mumbai.
Final Decision: The petition was allowed, an arbitrator was appointed, and the parties were directed to submit their claims and counter-claims for arbitration.
1. This petition is directed against the order dated 8th July, 2014 passed by the learned Civil Judge (Senior Division), Dharmanagar, North Tripura whereby he rejected the application filed by the petitioner (hereinafter referred to as the defendant No.1) for referring their dispute to arbitration in terms of the arbitration clause of the agreement entered into between the parties.
2. The facts leading to the filing of the suit are that the plaintiff purchased one vehicle under hire purchase scheme from M/s. Rajarshi Motors Private Ltd. and this vehicle was financed by obtaining a loan from the petitioner-Tata Motors Finance Company Ltd. The vehicle in question is a Tata vehicle.
3. It is not disputed that a loan of Rs.7,63,824/- was raised and this was to be repaid over three years. The allegation of the plaintiff is that he has repaid the entire amount and, therefore, he prayed for a decree of declaration to the effect that the plaintiff has paid all the monthly installments under the loan agreement in respect of the vehicle bearing registration No.TR-02B-1588 financed by the petitioner-company. The plaintiff also prayed for a decree that the defendant be directed to issue clearance certificate regarding payment of the loan amount in respect of the vehicle.
4. The defendant No.2 i.e. M/s Rajarshi Motors Pvt. Ltd. filed written statement praying that the suit be dismissed. As far as the petitioner-defendant No.1 is concerned, it did not file any written statement but before filing written statement filed an application under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 and it was prayed that as per the agreement entered into between the parties the matter was to be referred to arbitration. It was accordingly prayed that either the suit be dismissed or the parties be directed to refer the dispute to arbitration. Along with this application a certified copy of the agreement was annexed.
5. Clause 23 of the agreement relates to arbitration and reads as follows:
“23. ARBITRATION.
23.1 All disputes, differences and/or claims arising out of this Loan Agreement or as to the construction, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in Mumbai in accordance with the Arbitration and Conciliation Act, 1996, or any statutory amendments thereof and shall be referred to a person to be appointed by the lender. In the event of death, refusal, neglect, inability, or incapability of the person so appointed to act as an arbitrator, the Lender may appoint a new arbitrator. The award of the arbitrator shall be final and binding on all parties concerned.”
6. Though the suit was filed in the year 2010 the petitioner- defendant No.1 was only served in the year 2014. On 05.4.2014 Mr. Swaroop Chandra Deb had put in appearance on behalf of the petitioner- defendant no.1 and had sought time to file written statement. The learned Civil Judge on the same directed that the parties should try to settle the matter out of Court in view of Section 89 of the Code of Civil Procedure. On the same date the learned trial Court also ordered that both sides are directed to furnish draft issues, examination-in-chief, if any, by the next date. The order dated 05.4.2014 reads as follows:
“05-04-2014
Ld. Counsel Mr. B B Das is present representing the Plaintiffs side by filing his memo of appearance.
Ld. Counsel Mr. A K Das is present representing the Defendant No.2 by filing his memo of appearance.
Ld. Counsel Mr. Swaroop Chandra Deb is present representing the Defendant No.1 by filing his memo of appearance with vakalatnama and by a petition prays for a short adjournments for furnishing of written statements on the grounds stated therein. Perused, considered and allowed, he is directed to furnish W/S before the next date. Both the parties are directed to settle the matter out of Court in view of Section 89 CPC and to furnish memo of settlement before
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