MEHAL SINGH Vs. PUNJAB KASHMIR FINANCE PVT. LTD

JUDGEMENT

(1.) The Additional District Judge, Jalandhar, dismissed an application filed by Mehal Singh-appellant (hereinafter referred as 'the appellant') under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity 'the Act') for setting aside the Award dated 29.04.2000, which is now under challenge. The factual background of the case is that the respondent is a finance company having different branches, including one at Delhi. The appellant had got financed a truck bearing registration No. HR-26-GA-0957 and obtained a loan of Rs. 4 lacs from the respondent on interest at the rate of 16% per annum. The respondent got the lease agreement executed on 02.09.1997 at Delhi and Sukhchain Singh and Baldev Singh signed the said agreement being guarantors. As per the lease agreement, the appellant was to pay the loan amount in 35 monthly installments commencing from 26.09.1997 and ending on 26.07.2000. The total amount of Rs. 5,56,000/- was to be paid by the lessee-appellant at the end of the lease term. The appellant having failed to pay the installments, the contract was terminated. On dispute having been arisen, the matter was referred to the Arbitrator, who passed the Award dated 29.04.2000 holding the respondent-company entitled to recover the arrears of overdue installments and charges amounting to Rs. 3,19,383/- as on 20.01.2000 jointly and severally from the appellant as well as the guarantors along with interest at the rate of 36% per annum till the dues are fully paid off. The respondent-company was further held entitled to the physical custody of the vehicle.

(2.) Feeling aggrieved, the appellant filed the objection petition before the Court on 20.09.2006 for setting aside the aforesaid Award on the ground that the same was not speaking one; the Arbitrator has not given any terms of reference, as such he had no jurisdiction to enter into the reference; the arbitral Award deals with a dispute, moreover nature of the dispute was not specified; the Award was obtained by the respondent by suppressing the facts and misleading the Arbitrator and the copy of the Award was neither sent to the appellant nor received by him, as such the Award is bad in the eyes of law.

(3.) Upon notice, the respondent besides raising preliminary objections, admitted that it (respondent) is a non-banking finance company. It was also pleaded that the truck in question was given to the appellant on lease on the basis of the lease agreement, which was executed at Jalandhar. The loan was to be returned in 35 monthly installments, however, the appellant had defaulted in making the installments, whereupon the dispute arose and Shri K.L. Jain was appointed as an Arbitrator. Upon notice, the appellant did not appear despite service, therefore, he was proceeded ex parte. It was further submitted that the Award is well founded and well reasoned and suggests no illegality and does not smell of any misconduct on his part.