SATNAM SINGH Vs. NSIC

JUDGEMENT

(1.) BY this common order, I shall dispose of the above two petitions whereby, petitioners have assailed an award dated 8th September 1999 passed by the Sole Arbitrator thereby awarding a sum of Rs. 82,77,485 in favour of Claimant (Respondent herein) along with 24% interest in respect of the disputes between the parties under the lease agreements dated 22 nd february 1993 and dated 9th July 1993.

(2.) BRIEF facts relevant for the purpose of deciding these petitions are that petitioner Satnam Singh had filed applications with the respondent for obtaining equipments under the Leasing Scheme. These applications of the petitioner were allowed and respondent agreed for supply of machinery/ equipments under the equipment lease agreements dated 22nd February 1993 and 9th July 1993. The petitioner/ deposited three months rental as interest free security with the respondent to be refunded on termination or expiry of the lease agreements after adjusting the outstanding rentals. The lease agreements dated 22nd February 1993 and 9th July 1993 signed between the parties created a binding contract between the parties. On the date of lease agreement of 22nd February 1993, the value of the equipment was rs. 72,66,900/ -. The petitioner Satnam Singh was to pay quarterly lease amount of Rs. 3,63,345/- for a period of five years and thereafter was to pay the residual value of equipment being Rs. 7,56,960/ -. Similarly, under lease agreement dated 9th July 1993 the lease value of equipment was rs. 13,98,300/- and the quarterly rent was Rs. 69,950/ -. The petitioner was to pay 20 quarterly installments of above amount. Petitioner Jaspal Singh stood guarantor for regular payment of installments by Satnam Singh and handed over title deeds of his property No. 3006 Sector-19 D, Chandigarh with claimant and created an equitable mortgage in favour of claimant. The equitable mortgage was created to secure the lease money and to ensure due performance of contract.

(3.) AFTER entering into these lease agreements, the petitioner got delivery of the equipments, however, petitioner failed to abide by the terms of the lease agreements and did not adhere to the payment of installments, as agreed between the parties. The respondent/claimant gave a notice to the petitioners regarding irregularities in payments of lease rentals and asked the petitioners to clear all arrears and pay the lease rental regularly. However, the petitioners showed their financial difficulties and did not pay the lease money as agreed between the parties. Several cheques issued by the petitioners to the respondent/claimant towards lease rental got dishonoured and returned uncashed. The respondent vide a legal notice dated 12th february 1998 asked the petitioner to clear the arrears along with interest as agreed upon and demanded a sum of Rs. 86,63,007/- i. e. the due amount.