MFG INDIA LIMITED Vs. GREAT INDIAN ROADLINES

JUDGEMENT

(1.) M/s MGF (India) Ltd. has filed the present petition under Section 20 of the Arbitration Act seeking filing of the arbitration agreement and for making the reference of the disputes to the named arbitrator.

(2.) The facts alleged can be delineated to be that petitioner company is carrying on the business of purchaser of motor vehicles/equipments/ machineries at its registered office at 17-B Asaf Ali Road, New Delhi. In due course of its business the petitioner purchased one Eicher Mitsubishi Canter Model FE 444 with 92.5 HP Direct Injection 4 Stroke Diesel Engine with certain configurations. The delivery of the vehicle had been given by Eicher Motors Ltd at Pithampur, Madhya Pradesh and had been brought to Delhi. The said vehicle thereafter was hired to respondent no.1 (M/s Great Indian Roadlines) under hire purchase agreement dated 7/07/1987 on the terms and conditions mentioned therein. Respondent no. 2 signed the said agreement of hire purchase as guarantor on behalf of respondent no. 1. The liability of the respondent is joint and several. The agreement was accepted and executed as well as signed on behalf of the petitioner company as well as the respondents. As per clause 6A of the agreement the parties agreed that all disputes and differences arising out of the said hire purchase agreement shall be referred to the arbitration in accordance with provisions of the Indian Arbitration Act and had agreed to appoint Shri Shashivansh Bahadur as their sole arbitrator.

(3.) The said hire purchase agreement was executed with respect to the said vehicle with a specified amount mentioned as the value of the vehicle. The amount had to be paid in 36 months. At the time of entering the agreement respondent no. 1 had paid Rs.41,995/- and the balance had to be paid in instalments. Respondents are alleged to have made defauts in the payment of hire purchase instalment and committed breach of the terms and conditions of the said hire purchase agreement. The petitioner claims a specified amount to be due as hire money, damage caused to the Canter, recovery of double the amount of average monthly hire as provided in the agreement besides damages. It has been pleaded that cause of action for purposes of the present petition arose when the petitioner re-possessed the vehicle on ccount of breach of the agreement and rescinded the contract by serving notice dated 12/08/1991 and called upon the respondents to pay the balance amount. In face of these facts and disputes having been so alleged to have arisen it is prayed that the arbitration agreement should be filed and reference be made to the named arbitrator.