Hire Purchase - Possession - movable property - arbitration - specific relief

Cited:
1) SBP and Company vs. Patel Engineering Ltd. reported in AIR 2006 SC 450= (2005) 8 SCC 618
2) Fair Air Engineers (P) Ltd. and another v. N.K. Modi (1996 (6) SCC 385
3) R.M.A.R.A. Adaikappa Chettiar and anr. v. R. Chandrasekhara Thevar (AIR 1948 P.C. 12)
4) Atul Singh and others vs. Sunil Kumar Singh and others reported in (2008) 2 SCC 602
5) India Household and Healthcare Ltd vs. LG Household and Healthcare Ltd. reported in AIR 2007 SC 1376
6) Haryana Telecom Ltd. vs. Sterlite Industries (India) Ltd. reported in AIR 1999 SC 2354
7) Sundaram Finance Ltd. vs. NEPC India Ltd. reported in AIR 1999 SC 565
8) Rame Gowda (D) by L.Rs v. M. Varadappa Naidu reported in AIR 2004 SC 2609
9) Charanjit Singh Chadha vs. Sudhir Mehra- (2001) 7 SCC 417
10) Manipal Finance Ltd. vs. T. Bangarappa - 1994(Supp) 1 SCC 507
11) Sardar Trilok Singh vs. Satvadeo Tripathi - (1979) 4 SCC 396
12) K.A.Mathai vs. Kora Bibbikutti- (1996) 7 SCC 212
13) Orix Finance (India) Ltd. vs. Jagmandar Singh and Another reported in (2006) 2 SCC 598
14) Sm. Vidya Verma vs. Dr. Shiv Narayan Verma reported in A.I.R. 1956 S.C. 108
15) Manager, ICICI Bank Ltd. vs. Prakash Kaur & Ors. reported in 2007(1) Crimes 407(SC)

Arbitration & Reconciliation Act 1996 - The ACT
  Kolkata High Court (Appellete Side)

G.E. Capital Transportation ... vs Samir Koley on 31 March, 2009 Author: Bhaskar Bhattacharya Form No. J(2)

Heard on: 25.02.2009.

Judgment on: 31st March, 2009.

Bhaskar Bhattacharya, J.:

.........
The sum and substance of the allegations made in the plaints of those suits was that the plaintiffs for the purpose of purchasing a vehicle on loan approached the defendant and as a condition of granting such loan, the plaintiffs were asked to sign on various blank papers and blank cheques were taken from them with the assurance of giving the terms of the agreement to the plaintiffs in future, but till the filing of the suit, the financier did not supply the papers containing the terms and conditions of grant of such loan. According to the plaintiffs, they are unaware of the terms of grant of such loan and by taking advantage of the signatures taken on the papers, some oppressive terms have been introduced and for alleged violation of such terms, the financier was trying to seize the vehicles purchased by them with the amount taken as a loan. In all these suits, all the plaintiffs, however, admitted that the defendant financed them and handed over the chassis of the vehicle to them and that in the register of the Motor Vehicles Authority it is recorded that the plaintiffs are the owners and that the defendant was shown as the financier. The plaintiffs in all these matters also admitted that they paid back some amounts by instalments at a specified rate for some months.

In all these suits, on the basis of selfsame allegation as made in the plaint, the plaintiffs came up with the applications for temporary injunction for restraining the financier from disturbing their possession in the concerned vehicle and the learned Trial Judge, on such applications, issued notice upon the financier to show cause why the prayer for injunction should not be granted and at the same time, granted ad interim order of injunction or status quo regarding the vehicle for a limited period. It appears from record that in all these matters, defendant entered appearance and filed application under Sections 5 and 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) thereby alleging existence of the arbitration clause for referring the dispute involved in the suit to the arbitral Tribunal. When such applications were filed, the plaintiffs although filed written objection to those applications before hearing of such applications, came up with the applications under Section 151 of the Code of Civil Procedure thereby taking a vacillating stance. In one hand, they maintained their initial standpoint that there was no valid agreement between the parties in the eye of law as they were unaware of the terms of the agreement and on the other hand, contended that in the event it was found that there was any valid agreement for arbitration, the suits and the applications for injunction might be converted to ones under Section 9 of the Act.

In most of the matters, the learned Trial Judge converted the suit and the application for temporary injunctions to a miscellaneous case under Section 9 of the Act and again extended the ad interim order of injunction which was initially granted in the regular suit till the disposal of the miscellaneous cases. It appears that in two of these appeals, the applications under Section 9 have been finally disposed of by the order impugned and in eight of the above appeals, although the applications have been filed by the plaintiffs for conversion, the suits have not yet been converted. In the other appeals, the suits have been converted into applications under Section 9 of the Act.

...........

1) In these appeals preferred by the defendant, the plaintiffs cannot ask the Court to set aside the order of conversion made on their prayer. If a party prays for conversion only on condition that in the event of existence of an agreement for arbitration such order should be passed, in such a situation even if the Court erroneously made an order of conversion they cannot challenge the order of conversion for the simple reason that on their prayer such conversion was made and if no such prayer was made, the Court on finding that there existed an arbitration clause could not pass any further order in the suit. Moreover, having enjoyed the order of ad interim injunction they now cannot pray for setting aside the order of conversion and that too, in this appeal at the instance of the defendant.

1) A judicial authority as such is not defined in the Act. It would certainly include the court as defined in Section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum

2) if a party avails of the benefit of interim relief by taking recourse to Section 9 of the Act, it is implicit that such party accepts the existence of a valid arbitration clause. Such a plea is available only by filing a suit in the Civil Court.

When a party applies under Section 9 of the 1996 Act it is implicit that it accepts that there is a final and binding arbitration agreement in existence. It is also implicit that a dispute must have arisen which is referable to the arbitral tribunal.

3) it is now settled by the Supreme Court that if a party wants to take a plea that the agreement containing the clause of arbitration was vitiated by fraud such plea can only be decided by a Civil Court and not by the Arbitrator.

4) Tribunal cannot interfere with order of Chief Justice under Section 11

4) if a party wants to take a plea that the agreement containing the clause of arbitration was vitiated by fraud such plea can only be decided by a Civil Court and not by the Arbitrator.

5)It is now settled law that so far the immovable property is concerned, if somebody in unlawful possession is dispossessed without due process of law even by the lawful owner, the person so dispossessed of the immovable property can by simply by filing a suit under Section 6 of the Specific Relief Act within six months from the date of dispossession, get back possession even though he had no title to the property, provided, however, that the dispossession was not by a Government. But if a trespasser evicts a lawful owner and immediately thereafter, comes before court as plaintiff and prays for injunction restraining the lawful owner from disturbing his possession except by due process of law, the civil court will not assist such a person to protect his illegal possession unless such possession has ripened into a possession "acquiesced by the lawful owner". The Civil Court will protect only "settled possession" of a trespasser against the lawful owner.

6) financier had every right to take possession of the vehicle, in case of default but in the process of taking possession they should not use any excessive force which would result in an offence punishable under the law.

7) violation of personal liberty guaranteed in Article 21 by a private individual does not come within the purview of Article 21

8) A judicial authority as such is not defined in the Act. It would certainly include the court as defined in Section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum


(Bhaskar Bhattacharya, J.)

I agree.

(Tapan Kumar Dutt, J.)