JALUMURI VENKATA RAJA RAO Vs. MANAGING DIRECTOR

JUDGEMENT

(1.) The plaintiffs in OS No. 117 of 2010 on the file of the learned III Additional District Judge, Kakinada, filed this revision feeling aggrieved by an order, dated 3.11.2011 passed in IA No. 2946 of 2010 filed therein. For the sake of convenience, the parties are referred to as arrayed in the suit.

(2.) The plaintiffs are spouses and they borrowed a sum of Rs. 60,00,000/- from the 1st defend ant-finance company in the year 2008. It was agreed to be repaid in 60 monthly instalments. An item of immovable property was mortgaged. At one point of time, the plaintiffs intended to liquidate the loan by paying the outstanding instalments and to redeem the mortgage. The documents that are entered into between the parties contained an arbitration clause.

(3.) The proposal mooted by the plaintiffs for liquidation of the loan half way through was not acceded to by the defendants. They invoked the arbitration clause and addressed a letter requiring the plaintiffs to participate therein. Sensing that the defendants are trying to encash the blank cheques issued by the plaintiffs, for repayment of instalments, the they filed AAOP No. 3 of 2012 in the Court of Principal District Judge, East Godavari at Rajahmundry under Section 9 of the Arbitration and Conciliation Act (for short 'the Act') for certain interim measures viz., to restrain the defendants from encashing the blank cheques. The trial Court did not pass any favourable orders. Therefore, they approached this Court by filing CMA No. 1085 of 2012. This Court allowed the appeal and restrained the defendants from encashing the blank cheques pending arbitration proceedings.