Tata Motors Finance Limited vs Sahidullah Mallick

Sudip Ahluwalia, J.—This revisional application is directed against the impugned order No. 13 passed by the learned 5th Bench, City Civil Court at Calcutta in T.S. No. 420 of 2011 on 24.1.2012. The learned Court below in passing the said order was pleased to reject an application filed on behalf of the petitioner/defendant under Section 8 read with Section 5 of the Arbitration and Conciliation Act.

It may be mentioned that the suit was filed by the respondent who has not appeared to contest the present application in this Court inspite of service of notice as noted in an earlier order passed on 11.9.2009. In the said suit his prayer was for declaration that the repayment of his installments in pursuance of a loan admittedly taken by him were fully covered in view of issuance of various cheques by him, and that the defendant/petitioner had no right to interfere with the peaceful running and possession of his vehicle bearing Registration No. WB-19E 1829.

The respondent had further sought a permanent injunction to restrain the petitioner/defendant and its agents and employees from seizing or interfering with his peaceful running and possession of the aforesaid vehicle.

The LCR shows that shortly after filing of the suit, the O.P. moved an application for temporary injunction under Order 39 Rules 1 and 2 read with Section 151 of the CPC. The learned Court below after hearing the plaintiff/O.P. was pleased to grant him interim relief till 30th March 2011. Subsequently, the petitioner/defendant appeared in the suit to contest the same. The matter was thereafter routinely adjourned with extension of the interim order till the defendant/petitioner on 11.07.2011 filed the aforesaid application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, which was ultimately rejected vide the impugned order.

The contention of the petitioner/defendant in the said application was that the suit was not maintainable in the Civil Court in view of the existence of the Loan Agreement executed between the parties, which contained an Arbitration Clause whereby it became incumbent upon them to have any or all disputes arising between them out of the said agreement to be settled by arbitration.

It is further seen from the LCR that the defendant had actually filed a certified copy of the aforesaid agreement allegedly entered into by the parties on 30.6.2010 in the form of Annexure P-1 to contest the application. The same is found to be intact on pages 37 to 45 of the LCR.

But after hearing both sides, the learned Court was pleased to reject the petitioner''s application on the following grounds:--

1) That the original or certified copy of the Arbitration Agreement was not annexed;

2) That the document actually filed by the defendant/petitioner did not bear signature of the parties on any of its pages;

3) That the document did not bear the Seal and rubber stamp of the defendant/petitioner;

4) That there was no description on the part of the vehicle in question on account of which it could not be held that the agreement related to the vehicle which was the subject matter of the suit and;

5) That the time for repayment of the loan or installments had not expired.

In view of the real nature and substance of the dispute involved the observations of the learned Court below was that the document placed before it was not an agreement per se on account of non-existence of the parties'' signatures on each of the pages, the absence of the defendant''s Seal ands rubber stamp and non-mentioning of the particulars of the vehicle for purchasing which the loan in favour of the plaintiff/O.P. was sought to be granted, are all rather clerical in nature.

It is seen that the signature of the plaintiff/OP, as also of one Satindar Kaur as authorized signatory to the last page annexed to the printed proforma agreement, do actually exist along with the date (30.6.2010) thereupon.

Thereafter, the learned Court below observed that the agreement produced before it did not disclose the material particulars of the vehicle in the form of its Chassis number, Engine number and Registration number etc. To some extent there appears to be substance in this observation. But it is material to note that the cost of the vehicle in question, i.e., Rs. 3,07,677/- as shown in the column 3(f) of the Annexure to the agreement exactly tallies with the amount disclosed in the relevant Para No. 2 of the plaint.

Similarly, the repayment schedule as mentioned in the relevant column No. 6, i.e., by 47 monthly installments of Rs. 7,460/- each also tallies with the averments made in Para 3 of the plaint. Furthermore, in Para 2 the plaintiff/OP went so far as to specifically mention, ".... The plaintiff made the body of the said vehicle from his own resources."

The above averment of the plaintiff/OP leaves no doubt that the vehicle he was referring to in the plaint is the same in respect of which the loan agreement in question was executed, although the Chassis number or Engine number were not specified in the relevant column. In any case, nowhere in the plaint the plaintiff had made out a case that there was never any agreement executed and entered into between the parties regarding the loan taken by him. His only stress before the learned Court below was that the vehicle in question was not covered under the agreement, and that the defendant had no authority to seize or take possession of the same.

However, on perusal of the said loan agreement (Annexure P-1) it is seen that Clause No. 18 therein specifically provides for taking possession, seizure, recovery, removal of the asset etc. by the lender/defendant from the borrower in the event of default.

As already observed earlier, the observation of the learned Court below that the agreement in question did not appear to be in relation to the suit vehicle is not convincing in view of the matching of loan and repayment amount figures as also the own averment of the plaintiff/OP that he had constructed the body of the same from his own resources thereby practically conceding that the Vehicle was the same as the one covered under the loan agreement, although he had made certain improvements upon the same from his own resources.

In this view of the matter, the learned Court below does appear to have acted with material irregularity in not laying credence upon the loan agreement relied upon by the defendant/petitioner, which specifically contained an Arbitration clause (Item No. 23) therein. Its jurisdiction to entertain the proceeding once the loan agreement did appear before it along with the defendant''s application for referring the matter to Arbitration apparently stood ceased in view of the decision of the Apex Court in Civil Appeal No. 6399 of 2009 in re "Magma Leasing & Finance Limited & Anr. v. Potluri Madhavilata & Anr." wherein it was held:--

"23. Section 8 is in the form of legislative command to the Court and once the pre-requisite conditions as aforestated are satisfied, the Court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the Court and the Court has to refer the parties to arbitration."

For the above reasons, the impugned order appears to be unsustainable and is accordingly set aside. The Revisional Application is therefore allowed without Costs.

The LCR be sent back along with a direction upon the learned Court below to proceed further in accordance with law.