SHRIRAM TRANSPORT FINANCE COMPANY LTD Vs. V BALANISAMY

JUDGEMENT

(1.) This appeal is preferred as against the Order and Decreetal Order made in Arbitration O.P. No. 252 of 2011 dated 31.01.2013 on the file of the first Additional District Court, Salem, whereby and whereunder the First Additional District Judge, Salem has set aside the arbitration award passed by the arbitrator in favour of the appellant herein on the ground of limitation.

(2.) Brief facts which are necessary for disposal of this appeal are as follows:-

(3.) The appellant is a public limited company incorporated under the Indian Companies Act and they are carrying on business of hire purchase, lease and loan cum hypothecation in respect of LMV/MMV/Heavy goods and passenger vehicle as per the guidelines of Reserve Bank of India. During the course of it's business, the first respondent approached the appellant and entered into a Loan Agreement with the appellant on 01.08.2004 and in pursuance of the same, loan was sanctioned to the first respondent for purchase of TATA TELCO TIPPER HGV Multi-axled Vehicle bearing Registration No. KA 01 AA 0900 for a total agreement value of Rs.10,43,423/-. As per the agreement, the loan amount was payable in 35 monthly instalments at the rate of Rs.29,820/- each for first 34 months and at the rate of Rs.29,545/- towards the 35th instalment. The loan agreement was executed by the first respondent as Borrower/Hypothecator which was guaranteed by the second respondent as a guarantor. As per the agreement, the first instalment is to commence on 01.09.2004 and the last instalment amount is payable on 01.07.2007. According to the appellant, the first respondent has paid a sum of Rs.28,820/- towards first instalment out of which a sum of Rs.17,000/- was adjusted towards insurance payment and the remaining amount of Rs.12,820/- was given credit to the first instalment. After paying the first instalment in part, the first respondent failed and neglected to pay the rest of the instalment amounts. In such circumstance, the appellant sent a notice dated 01.06.2006 to the respondents calling upon them to pay the instalment amount of Rs.6,09,220/- as on 01.05.2006. Though the respondents received the notice dated 01.06.2006, they have neither settled the outstanding amount to the appellant nor issued any reply thereof. Therefore, the appellant invoked the arbitration clause contained in the agreement and filed a claim petition before the Arbitrator on 09.08.2010, claiming a sum of Rs.26,79,850/- with interest at the rate of 36% per annum from the date of claim petition till the date of realisation.