D DHANUSHKOTI Vs. SUNDARAM FINANCE LTD

JUDGEMENT

(1.) THERE are four Original Petitions at the instance of the guarantor, challenging the individual awards passed by the learned Arbitrator. The petitioner herein is the guarantor in all these hire purchase agreements. The facts herein are common in all these Original Petitions and hence a common order is passed. For the purpose of convenience, the facts as stated in O.P.No.867 of 2007 are referred herein.

(2.) AN agreement was entered into as early as 14.12.1999 between the second respondent company and the first respondent company for hire purchase of certain machineries. The agreement contained clauses on repayment on the machinery taken on hire purchase. The first instalment was to commence on 14.12.1999 and the last one ended on 14.11.2002 for a total sum of Rs.13,85,500/-. The petitioner herein stood as a guarantor for the due compliance of the terms by the second respondent. Apart from the petitioner herein, Directors of the company were also shown as guarantors. Admittedly, the borrowing company, second respondent herein, committed default in paying the instalments, particularly after the seventh instalment. Hence the first respondent sent notices to the second respondent as well as to the guarantors and called upon them to pay the defaulted amount . In spite of the demand made, the borrowing company as well as the guarantors, including the petitioner, failed to make the payment. Clause 18 of the agreement is the relevant provision on arbitration which states that all disputes, differences and claims arising out of the hire purchase agreement be settled by arbitration in accordance with the provisions of Indian Arbitration Act, 1940 or any statutory amendments thereof, as applicable to the proceedings, before the Arbitrator. Clause 16 of the agreement states that the guarantor guaranteed the due performance and observance of the agreement by the hirer and agreed to pay on demand any moneys due or which might become due and payable by the hirer to the owner under the agreement. Clause 17 states that any time or indulgence granted to the hirer or owner shall not prejudice the owner's right against the guarantors or relieve the guarantors from the guarantee and the liability of the guarantors will continue until the owner has any claim against the hirer in respect of the agreement.

(3.) IN the course of the proceedings before the Arbitrator, documents were marked through C.W.1 The documents marked included the report filed by the Advocate Commissioner under Exs.C23, C24, C25 and C26. By order dated 18.11.2005, this Court passed a common order granting sanction to the first respondent to sell the machineries seized. The said order is marked as Ex.C27.