PUSHPENDRA MOTILAL SINGH Vs. COMMERCIAL AUTOMOBILES

JUDGEMENT

(1.) THIS is an appeal under Section 39 (VI) of the Arbitration Act, 1940 (hereinafter to be referred to as the Act) against the order refusing to set aside the award dated 15-10-1987 and making it a rule of the Court.

(2.) IT is not in dispute that respondent Commercial Automobiles, Jabalpur financed truck No. MBA-4022 under the hire purchase agreement dated 11-3-1983 (Ex. P/2) entered into with the plaintiff. The price of the truck was Rs. 1,74,697/ -. The defendant paid an amount of Rs. 54,697/- in cash. The plaintiff advanced an amount of Rs. 1,20,000/ -. Interest at the rate of 18% per annum for a period of three years amounting to Rs. 64,800/- was added to the principal sum. A sum of Rs. 9376/- was added towards insurance premium. Thus the total amount worked out to Rs. 1,94,176/ -. This amount was made payable in 35 monthly instalments. The defendant committed default in paying certain instalments. He paid a total amount of Rs. 77,500/ -. The plaintiff referred the dispute to the arbitrator as per arbitration clause in the agreement. This reference was made on 27-3-1987. The arbitrator issued notice to the defendant by registered post and the matter was fixed for hearing on 29-4-1987. As the notice was not received back served or unserved another attempt was made. Again a notice was sent by registered A. D. Post and the next date which was fixed for hearing was 23-9-1987. This notice came back with an endorsement "left without address". The arbitrator treated it valid service as per terms of the agreement and proceeded ex parte against the defendant. He passed an award on 15-10-1987. He awarded an amount of Rs. 1,96,747. 76 paise on account of "overdue instalments, insurance charges and compensation upto 31-1-1987" and further damages for unauthorised use of vehicle at the rate of Rs. 376/- per day with effect from 28-2-1987. The plaintiff was held entitled to take back possession of the vehicle.

(3.) THE defendant challenged this award by filing an application under Section 33 of the Act. It was alleged that (a) the arbitrator committed misconduct within the meaning of Section 30 of the Act inasmuch as he proceeded ex parte without proper service of notice on the defendant, (b) the award was made beyond a period of four months of entering upon the reference (c) there could not be unilateral reference of the dispute without the consent of the defendant, (d) the award was perverse and without application of judicial mind.