SUNDARAM FINANCE LTD. Vs. BIJU SCARIA

JUDGEMENT

(1.) The petitioner herein is the defendant in O.S. No. 127/2010 on the files of the Munsiff's Court Kattappana, filed by the respondent herein and the respondent in I.A. No. 1069/2010 filed therein. The above suit was filed by the respondent/plaintiff for a perpetual injunction restraining the petitioner/defendant from taking possession of the plaint schedule vehicle otherwise than by due process of law. The plaint schedule vehicle is a stage carriage bus bearing Reg. No. KL. 6-E-203 owned by the plaintiff. It was purchased from the defendant at a price of Rs. 12 lakhs. The defendant is a private financing company engaged in lending loan under the hire purchase agreement. The plaintiff availed a loan from the defendant for an amount of Rs. 11,50,000/- for the purchase of the said vehicle and the loan amount was agreed to be repaid by 47 monthly instalments of Rs. 31,710/-. The plaintiff paid 16 instalments towards the loan and thereafter he could not remit the remaining instalments as specified in the agreement. On 18.6.2010, the defendant tried to take possession of the vehicle forcibly; but he could not succeed. At any rate, the vehicle will be taken away by force at any time. They have no right to do so. Hence, the respondent/plaintiff filed the above suit as prayed above. The petitioner/defendant entered appearance and filed a written statement along with I.A. No. 1069/2010 challenging the jurisdiction of the civil court, and seeking an order directing the plaintiff to invoke arbitration clause in the loan agreement between the plaintiff and the defendant. In the written statement, the defendant contended that, in view of the arbitration clause under Art. 22 of the agreement, the civil court has no jurisdiction to entertain the civil suit pertaining to the dispute that falls under S. 8 of the Arbitration and Conciliation Act. Besides, according to the said loan agreement, the plaintiff is liable to pay monthly installments on the due date mentioned in the second schedule of the loan agreement. In case of default, contrary to the said undertaking in the agreement, the defendant has the right to take possession of the vehicle, without notice to the plaintiff, i.e., to enter upon the premises or garage where the vehicle is lying and if necessary, to break open any such place. In view of the specific clause empowering the defendant to recover possession of the vehicle, in case of default, no prohibitory injunction can be passed against the defendant and the suit itself could not have been entertained for the relief prayed for in the suit.

(2.) After considering the rival contentions, the court below dismissed the above I.A. on a finding that inclusion of the arbitration clause in the agreement does not cause ouster of the jurisdiction of the civil court and also the right of recovery of possession by force, after breaking open the premises granted to the petitioner is illegal and unenforceable under law. The legality and propriety of the above findings are under challenge in this Revision Petition.

(3.) The learned counsel for the petitioner advanced arguments challenging the findings, whereby the court below dismissed the LA. The learned counsel contends that, in view of the specific arbitration clause included under Art. 22 of the agreement between the parties, the civil court has no jurisdiction to entertain the suit itself. Similarly, no prohibitory injunction can be passed against the petitioner/defendant as the right of recovery of possession of the vehicle by force is expressly granted to the petitioner under Art. 14(2) of the agreement. The finding of the lower court that the petitioner has no right, to recover possession of the vehicle and if necessary, to break open any such place is unsustainable under law.