NIVEDITA REDDY Vs. ESCORT FINANCE LIMITED

JUDGEMENT

(1.) Admittedly the agreement of loan did not contain an arbitration clause. Rather there was a clause in the agreement that the Courts at New Delhi will have exclusive jurisdiction in all matters arising out of this agreement.

(2.) The petitioner had raised a loan amounting to Rs.5,85,000.00 for financing a Cielo GLF Car which was repayable in 36 equated monthly instalments or Rs.22,466.00 - each. The monthly instalments paid by the petitioner amounted to Rs.2,92,058.00. On 6/02/1998 the petitioner addressed a letter to the respondent calling upon the respondent No.1 to foreclose the contract from 3 years to 2 years which was ending by March, 1999 to March, 1998 and expressed the willingness to settle the account. Instead of settling the accounts the respondent No. 1 through their recovery people seized the vehicle on 20/02/1998 and disposed off the vehicle for an amount of Rs.2,35,000.00. Vide notice dated 10/06/1999 the respondent called , upon the petitioner to pay a further sum of Rs.4,04,601.00. In the said letter the respondent called upon the petitioner to make the payment of the outstanding amount as on 3/03/1999 together with future overdue interest @ 2.5% per month within seven days from the date of receipt of the notice, failing which the respondent would be constrained to initiate appropriate legal action in the competent court of law for recovery of the aforesaid amount payable by the petitioner. In the same notice it was also mentioned that the respondent would refer the matter for arbitration to adjudicate the disputes to the sole arbitration of Mr.K.S.Jaggi, Advocate. In reply to the said letter the petitioner stated that there was no amount whatsoever which was legally due and payable by the petitioner and as there is no existing contract interse, the question of there being any dispute did not arise. The petitioner also made it clear that in the absence of and there being no dispute the question of calling upon the Arbitrator did not arise.

(3.) Now the moot question is whether the notice dated 10/06/1999 and the reply sent by the petitioner as referred above can tantamount to arbitration agreement or not.