M G F INDIA LIMITED Vs. SUDESH KUMAR

JUDGEMENT

(1.) This is a petition under Section 20 of the Indian Arbitration Act, 1940 for reference of disputes to the Arbitrator named in the hire purchase agreement.

(2.) It is pleaded that petitioner is a registered company; respondent No.1, Sudesh Kumar, entered into a hire purchase agreement with the petitioner on 30th June, 1987 for taking on hire purchase TATA(d) Truck of 1987 model (registration No.PCK 2335); respondent No.2 signed the hire purchase agreement as a guarantor; the total amount of the hire purchase was in the sum of Rs.2,70,300/- payable in 35 months; the first payment was to be made on 1st September, 1987 being in the sum of Rs.8,500/- and subsequent payments were to be made on/or before first of each succeeding calendar month of Rs.7,700/-. As per clause 3 of the terms and conditions of the said agreement, the hirer acknowledged that he would hold the truck as hirer and bailee of the owners and shall not have any right title or interest, as purchaser thereof, until the owners transfer to him all their rights, title and interest in the said vehicle as provided in clause 4 of the Agreement. Respondent No.1 only paid Rs.1,51,700/- towards the monthly hire purchase and additional hire purchase charges. He failed to pay the balance amount of hire purchase charges, amounting to Rs.1,40,695/- despite repeated requests. It is pleaded that respondent No.1 was liable to pay a sum of Rs.6,90,397/- till 27th October, 1994.

(3.) It is also pleaded that vehicle was repossessed on 7th May, 1993 by the petitioner company; in the year 1998, the respondents served notice on the petitioner claiming damages @ Rs.10,000/- per month stating therein that due to terrorism in Punjab, the respondent No.1's business was badly affected, therefore, there was default in payment of instalment; the petitioner took away the truck from respondent No. 1 stating that the same would be plied by the company itself, and he would be paid Rs.10,000/- per month after deducting remaining instalments of the loan amount. The respondents claimed damages at the said rate. Despite service of notice, respondents did not appear.