ARAVALI LEASING LIMITED Vs. UNICOL BOTTLERS LIMITED

JUDGEMENT

(1.) This order will govern the disposal of OMPs. No.58/95, 59/95, 60/95, 61/95 & 62/95. 2. OMP 58/95 under Section 8(2) of the Indian Arbitration Act, 1940 (hereinafter referred to as the "Act") was filed, inter-alia alleging that under a lease agreement dated 8th March, 1991, respondent No.1 agreed to take on lease the items noted in Schedule A annexed to the lease agreement on the terms and conditions contained therein from the petitioner. Respondent No.1 undertook to pay amount equivalent to 10.60% per annum of the cost as lease rental in advance on quarterly basis from the start of the first year till the end of the third year. The first lease rental instalment was due on 15th March, 1991 while the subsequent instalments were to become due after every three months. Respondent No.2 stood as a guarantor for respondent No.1 and signed the aforesaid lease agreement in that capacity. Since the respondents defaulted in making payments of the lease rentals, petitioner sent notice dated 1st October, 1993 by registered AD calling upon the respondents to pay a total sum of Rs. 12,34,754.00 as on 30th September, 1993 besides default interest @ 30% per annum in terms of the lease agreement. Lease agreement was also terminated. It is alleged that as per clause 21 of the aforesaid lease agreement disputes/claims arising out of the agreement were to be settled in accordance with the provisions of the Act and/or any statutory amendments thereto. Disputes/claims were to be referred to the sole arbitration of Sh. Umesh Khaitan and in case of his death refusal, neglect, or incapability to act as arbitrator, to Sh. Anil Sharma. Invoking the said arbitration clause by the letter dated 26th December, 1994, the disputes were referred by the petitioner to Sh. Umesh Khaitan and he also entered upon the reference. By a fax dated 7th February, 1975, respondent No.1 objected to the appointment of Sh. Umesh Khaitan as arbitrator and Sh. Anil Sharma as alternate arbitrator in terms of said clause 21. In view of the objection taken by respondent No.1, by the letter dated 15th March, 1995 Sh. Umesh Khaitan intimated his unwillingness to act as arbitrator. By the letter dated 3rd April, 1995Sh. Anil Sharma too expressed his inability to act as arbitrator. It is further alleged that the petitioner thereafter served notice under Section 8(1 )(b) of the Act dated 17th April, 1995 by registered AD calling upon the respondents to concur in the appointment of an arbitrator. Names suggested were that of Justice H.L.Anand(Retd.) and Justice Avadh Behari Rohatgi (Retd.). Said notice was served on the respondents on 22nd April, 1995. However, the respondents did not concur in the appointment of either of the two names suggested within 15 days' of the receipt of the notice. It was prayed that an arbitrator be appointed to adjudicate upon the disputes/claims between the parties.

(2.) In OMPs- 59/65', 60/95, 61/95 & 62/95 wherein separate lease agreements have been executed between the parties, the averments made are similar to those made in OMP No. 58/95.

(3.) Identical replies have been filed in all the five OMPs by the respondents. Execution of the lease agreements in question and taking on lease the machines as detailed in schedule A annexed to the lease agreements on the terms and conditions contained in agreements, are not disputed. However, it is stated that Ranjan Kumar Poddar who filed the petitions, is not authorised to institute or sign or verify them. It is denied that the respondents defaulted in making payments of the lease rentals as alleged by the petitioner, Receipt of the notice dated 1st October, 1993 is denied. It is further stated that the lease agreements do not constitute any guarantee of respondent No.2. It is denied that the notice dated 17th April, 1995 was served on the respondents or that the arbitration agreement shows that it was intended that the vacancy should not be supplied. Therefore, the time limit of 15 days' envisaged by Section 8(1 )(b) never began to run against the respondents. It is stated that the provisions of Section 8(2) of the Act have,no application to the facts of the case and the petitions thus deserve to be dismissed.