HDFC BANK LTD Vs. ASHISH SHESHMANI PANDEY

JUDGEMENT

(1.) Heard the learned counsel for the Parties.

(2.) Admittedly the respondent/plaintiff had taken a vehicle loan in respect of vehicle No.MH-06 AG 178 from the defendant/bank, which is appellant before this Court. The plaintiff contended that he had paid all the dues in respect of the said vehicle loan and he requested the bank to issue No Objection Certificate. The bank refused to issue No Objection Certificate and, therefore, the plaintiff filed suit seeking direction to the bank. He also took out Notice of Motion No.3263 of 2007 seeking direction for the same purpose. The defendant/bank admitted that in respect of the said vehicle loan all the dues have been cleared. However, the bank was not willing to issue No Objection Certificate because in respect of certain other transactions, certain amounts were due from the plaintiff. Bank took a plea that as per the terms of the contract, if there is any dispute, differences and/or claim arising out of or touching upon the said agreement, the dispute has to be referred to the arbitrator. The Bank requested the Court to refer the matter to the arbitrator and not to grant notice of motion. The learned trial Court rejected the contention of the bank holding that when there is no dispute in respect of said loan, the question of referring the matter to the arbitrator does not arise. In view of the admission that the whole of the loan in respect of the said vehicle has been cleared, notice of motion was allowed in terms of prayer clause (a) and thereby, bank was directed to issue No Objection Certificate. Against that order, bank has preferred the present appeal.

(3.) The learned counsel for the defendant/appellant contends that in view of the provisions of Section 8 when the question of arbitration is raised by one of the parties, the matter must be referred to the Arbitrator by the Court. Section 8 of the Arbitration & Conciliation Act, 1996 reads as follows: