MOTOR AND GENERAL FINANCE LIMITED Vs. C MOHAMMED

JUDGEMENT

(1.) The petitioner, named above, has filed the present petition under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') with the prayer that the Hire Purchase Agreement dated the 8th April, 1986, containing arbitration clause, be ordered to be filed in the Court and the disputes/ differences between the parties, mentioned in the petition, be referred to the sole arbitrator Sh. Vikramjit Sen, Advocate. The case of the petitioner, in brief, is that the petitioner entered into a Hire Purchase Agreement dated the 8th April, 1986 with respondent No. 1 as hirer and respondent No.2 as a guarantor in respect of a Tata Diesel Truck, Model 1986, bearing registration No. KBF - 4995 (hereinafter referred to as the 'said vehicle'). Under the Hire Purchase Agreement the hirer was to pay to the owners at New Delhi a sum of Rs 68,713.54 as initial payment by way of hire which was to belong to the owners and was not refundable under any circumstance by the owner to the hirer. In terms of the said Hire Purchase Agreement, respondent No. 1 agreed to pay 47 instalments of hire money (46 hire instalments of Rs 5.300/- each and the last hire instalment of Rs 3,700/-), falling due on 7th of each month beginning from 7.6.86. The liability of respondent No.2, the guarantor, in terms of the said agreement was co- extensive with that of respondent No. 1 to the petitioner. Respondent No. 1 was given the delivery/ possession of the said vehicle.

(2.) It is alleged that respondent No. 1 paid only a sum of Rs 41,200/ towards hire money as against the sum ofRs 1,43,100/- payable towards hire money, Rs 4,000/- towards compensation charges as per the agreement, incidental expenses and other expenses making a total of Rs 1,28,198/-.

(3.) The petitioner company vide notice" dated 29.7.88, issued to the respondents terminated the hire of the said vehicle and called upon the respondents to pay the total outstanding amount including interest on overdue instalments incidental expenses calculated upto 7.7.88 and to return the said vehicle to the petitioner. It is alleged that in terms ofthe said Hire Purchase Agreement, the respondents are jointly and severelly bound to pay a sum of Rs 1,28,198/- calculated upto 7.8.88 and overdue interest and incidental charges to the petitioner. It is next alleged that the Hire Purchase Agreement contained an arbitration clause to the effect that all disputes, differences and/or claims arising out ofthe said Hire Purchase Agreement are liable to be referred to the named arbitrator.