Sri Lakshmi Enterprises vs R. Ramakrishnan

K. Raviraja Pandian, J.—The civil revision is filed against the order of the trial court made in IA No. 989 of 2005 in OS No. 340 of 2005

on the file of the District Munsif, Krishnagiri.

The case of the petitioner is that the respondent herein filed a suit in OS No. 340 of 2005 for mandatory injunction directing the petitioner herein

to handover the vehicle repossessed by the petitioner on default committed by the respondent as per the terms of the agreement. The respondent

entered into hire purchase agreement with the petitioner agreeing to pay Rs. 4,560 every month relating to the vehicle from 10.04.2005 for a

period of 24 months. The respondent committed default in repayment and hence the vehicle was repossessed. Hence, the respondent filed the suit

with prayer as stated above. In the suit the petitioner herein filed an application u/s 8 of the Arbitration and Conciliation Act, 1996 to refer the

matter to the arbitrator. That application has been rejected by the trial court. The correctness of the said order is now put in issue in the civil

revision petition.

Heard the learned counsel on either side and perused the materials on record.

I am of the view that the order impugned cannot be legally sustained. In view of the statutory provision contained in the Arbitration and

Conciliation Act, 1996 and in the light of various decisions on that issue, differentiating 1940 Act and 1996 Act and concluding that when the

dispute is covered under the arbitration agreement, it is mandatory on the part of the court to refer the dispute to the arbitrator for adjudication, the

order of the trial court has to be set aside. The trial court is directed to refer the dispute to arbitration for adjudication. It is open to the petitioner to

name the arbitrator before the trial court.

With these observations, the civil revision petition is allowed and the impugned order is set aside. Consequently, the connected CMP is closed.

No costs.