GOODWILL INDIA LIMITED Vs. M G VIJAYA KUMAR

JUDGEMENT

(1.) The present petition under Section 20 of the Arbitration Act has been filed by the petitioner praying for a direction for filing the arbitration agreement in Court and for reference of the disputes to the named Arbitrator in terms of the arbitration agreement between the parties. The petitioner is a duly incorporated company under the Indian Companies Act and carries on the business, amongst others, hire-purchase of motor vehicles. In the course of its business the petitioner purchased a motor vehicle bearing Engine No. 692.D03.1.89700 and Chasis No. 344.050.1.81920 from M/s. M.G.F. India Limited, Cochin and hired out the same to respondent No. 1 under Hire Purchase agreement dated 27.10.1984, as the hirer. The respondent No. 2 signed the said agreement of Hire-Purchase as guarantor for and on behalf of the respondent.

(2.) The said Hire-Purchase agreement contained a clause being clause No. V - which states amongst others that the "guarantor further agrees that any time granted to the Hirer or any indulgence shown to him in respect of this Agreement either in the shape of releasing to the Hirer the Motor vehicle after detention or seizure or in any other manner, shall not prejudice the Owner's rights or relieve the Guarantor from his guarantee which shall be a Continuing Guarantee and his liability will be co-extensive with that of the Hirer, and that it shall not be necessary for the owners to give any notice to the guarantor for any defaults committed by the hirer, or any concession or indulgence shown to the hirer by the owners". Clause VI of the said agreement contained a clause relating to arbitration wherein it is provided that all disputes, differences and / or claims arising out of this Hire-purchase agreement would be settled by arbitration and would be referred to the sole arbitration of Shri Raj Paul Sagar, Advocate, Delhi.

(3.) After the aforesaid hire-purchase agreement the vehicle in question was allotted registration No. KRG-6318 with an endorsement that the said vehicle was subject to hire-purchase agreement with the petitioner-company. In terms of the aforesaid hire-purchase agreement the respondent No. 1 agreed to pay a total sum of Rs. 2,61,000.00 in 46 equal monthly instalments of Rs. 5,700.00 except the last instalment which was fixed at Rs. 4,500 .00 besides the over-due hire money, compensation charges for late payment and insurance expenses. It is stated that respondent No. 1 did not make payments to petitioner-company in accordance with the terms and conditions of the hire-purchase agreement and had been irregular in payment of the hire instalments, and accordingly the petitioner sent notices to the respondents to strictly comply with the terms and conditions of the hire-purchase agreement. Later on the petitioner-company came to learn that the vehicle is being plied by one Shri J.Naziruddin without the consent and knowledge of the petitioner- company and that in pursuance of notice issued by the petitioner-company to comply with the terms and conditions of the agreement the respondent made a payment of Rs. 11,400.00 vide cheque No. 634737 dated 30.12.1986, which was dishonoured on presentation to the bank and that a sum of Rs. l,93,400.00 is outstanding towards hire money and Rs. 33,500.00 is due towarcs compensation charges for late payment. Accordingly, the present petition has been filed by the petitioner to give effect to the arbitration agreement between the parties.