Civil Revision No.5602 of 2008 1
In the High Court of Punjab and Haryana at Chandigarh
Civil Revision No.5602 of 2008
Date of decision: 13.7. 2009
Shriram Transport Finance Co.Ltd. and another
......petitioners
Versus
Jasbir Singh @ Jasveer Singh
.......Respondent
CORAM: HON'BLE MRS. JUSTICE SABINA
Present: Mr.V.K.Sandhir, Advocate.
for the petitioner.
Mr.Raman Walia, Advocate,
for the respondent.
****
SABINA, J.
The petitioners have filed this petition under Article 227 of
the Constitution of India for quashing of order dated 11.9.2008
(Annexure P-5) passed by the Civil Judge, (Jr.Divn.) Ludhiana, vide
which application under Section 8 read with Section 5 of the
Arbitration and Conciliation Act, 1996 (for short ‘the Act’) was
dismissed.
The case of the plaintiff-respondent, in brief, is that
Civil Revision No.5602 of 2008 2
defendant-petitioners were running the business of finance of
vehicles in Ludhiana. Plaintiff wanted to purchase new truck and,
hence, approached the defendants for advancement of loan. Vide
agreement dated 10.2.2007, loan was advanced to the plaintiff by the
defendants for purchase of truck in question. The plaintiff had repaid
the entire loan amount. Thereafter, the plaintiff again approached
the defendants for loan of Rs.1,30,000/- against the said truck. The
defendants obtained the signatures of the plaintiff on various printed
forms and blank stamps. First instalment of Rs.10,000/- was paid by
the plaintiff on 29.2.2007. Up to 23.11.2007, plaintiff repaid
Rs.49,000/- to the defendants against the loan amount. In the month
of June, 2008, plaintiff approached the defendants and demanded
statement of account but he was not supplied with the same. On
19.7.2008 the vehicle in question, which was coming from Delhi to
Ludhiana loaded with scrap worth Rs.3,00,000/-, was taken by the
musclemen of the defendants.
The plaintiff filed a suit for mandatory injunction directing
the defendants to hand over the truck bearing registration No. HR 38-
C 2431 along with scrap worth Rs.3,00,000/-, which was taken away
by the musclemen of the defendants illegally on 19.7.2008. Notice of
the suit was issued to the defendants. An application under Section 8
read with Section 5 of the Act was filed by the defendants praying
that the case be referred to the Arbitrator for arbitration. Vide the
impugned order Annexure P-5, the said application was dismissed
Civil Revision No.5602 of 2008 3
by the trial Court. Hence, the present revision petition.
Learned counsel for the petitioners has submitted that in
terms of Article 10.14 of the agreement dated 10.2.2007 (Annexure
P-3), the trial Court was bound to refer the dispute arising between
the parties to the Arbitrator. In support of his arguments, learned
counsel has placed reliance on the decision of the Apex Court in
Rashtriya Ispat Nigam Limited v. M/s Verma Transport Company
(SC) 2006 (4) RCR (Civil) 478, wherein it was held as under:-
“15. Section 8 confers a power on the judicial authority.
He must refer the dispute which is the subject matter of
an arbitration agreement if an action is pending before
him, subject to the fulfillment of the conditions precedent.
The said power, however, shall be exercised if a party so
applies not later than when submitting his first statement
on the substance of the dispute.”
Learned counsel for the petitioners has next placed
reliance on the decision of this Court in M/s Regent Automobiles v.
Indian Oil Corporation Limited and others 2008 (3) RCR (Civil)
752, wherein it was held that if there is an agreement clause in the
agreement between the parties, then it is the mandatory duty of the
Court to refer the dispute arising between the contracting parties to
the Arbitrator.
Article 10.14 of the agreement reads as under:-
“Any and all disputes, differences and / or claims arising
Civil Revision No.5602 of 2008 4
out of or in connection with the Agreement or its
performance shall settled by arbitration to be held in New
Delhi in accordance with the provisions of the Arbitration
and Conciliation Act, 1996, or any statutory amendments
thereof and shall be referred to the sole arbitrator as may
be appointed by the Lender. The reference to the
arbitrator shall be within the clauses, terms and
conditions of this agreement. The arbitrator shall be
competent to decide whether any matter of dispute or
difference referred to him falls within the purview of
arbitrator as provided for above/ or for any matter relating
to arbitration under the Arbitration and Conciliation Act,
1996. The Award given by the arbitrator shall be final and
binding on all the parties concerned.”
Thus, as per the arbitration clause in the agreement any
and all disputes, differences or claims arising out of or in connection
with the agreement or its performance shall be settled by arbitration.
Hence, in view of the arbitration clause, I am of the
considered view that it is mandatory duty of the Court to refer the
dispute arising between the parties to the Arbitrator.
Learned trial Court had erred in dismissing the application
moved by the petitioners for reference of the dispute between the
parties to the Arbitrator. The petitioners must be relegated to the
remedy of arbitration.
Civil Revision No.5602 of 2008 5
Accordingly, this petition is allowed. The impugned order
dated 11.9.2008 (Annexure P-5) passed by the Civil Judge, (Jr.Divn.)
Ludhiana is set aside. Consequently, the application moved by the
petitioners under Section 8 read with Section 5 of the Act is allowed.
The matter shall stand refer to the Arbitrator in terms of the
arbitration clause. Further consequential orders in the context shall
be passed by the learned trial Court.
(SABINA)
JUDGE
July 13, 2009
anita