JAWAHAR MILLS LIMITED Vs. INDIA CEMENTS CAPITAL LIMITED

JUDGEMENT

(1.) As the issues involved in all these original petitions are one and the same and also arising between the same parties, they are taken up together and disposed of by way of a common order.

(2.) Hire Purchase Agreements have been entered into between the first petitioner as the hirer, the second petitioner as the guarantor and the first respondent as the Financier on various dates starting from 13.09.1993, 14.05.1994, 14.07.1994, 14.11.1994, and 25.09.1998 respectively. As per these agreements, the machineries originally belonged to the first petitioner were purchased by the first respondent and thereafter, the status of hirer was given to the first petitioner. The agreements also stipulate payments to be made by the first petitioner in specified instalments. The first petitioner committed default in making payments. Therefore, demands have been made on various dates. As the petitioners did not make the payment even thereafter, the first respondent invoked the arbitration clause.

(3.) As against some of the machineries, the first respondent filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, before the Additional District Judge at Salem in Ar.O.P.No.130 of 2001. Inventories have been taken by the learned Advocate Commissioner. It appears that one machinery was sold by the first respondent, for which, credit was given to as seen from the claim statement filed in O.P.No.142 of 2011. The learned Arbitrator, once again issued number of notices. The petitioners participated in the proceedings. In the reply affidavits filed, the petitioners did not raise any plea on the issue pertaining to the sale effected by the first respondent in favour of the third party qua the machinery. Not only that, the petitioners did not question the quantum of amount claimed, but contended that the proceedings being subjected to the Board for Industrial and Financial Reconstruction(BIFR), Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, would apply and therefore, the arbitral proceedings cannot be permitted to proceed with.