SAMRIDHI FINANCE PVT LTD Vs. FATEH SINGH

JUDGEMENT

(1.) THIS Letters Patent Appeal is directed against the judgment of learned Single Judge (Honble Justice Dr. A. S. Anand, as he then was of this court dated June, 7,1979 dismissing the application of the appellant herein, filed by it under Sec. 20 of the Arbitration Act,

(2.) M /s Samridhi Finance private Ltd. (hereinafter referred to as the appellant -company) filed application under Sec. 20 of the Arbitration Act for referring the matter in dispute between the pities to the arbitration of Shri Mohan Lal Gupta, advocate, the named arbitrator. It was alleged in the application that the appellant -company financed a sum of Rs. 33,000/ - against truck No. 3343/JKA to respondent No. 1 on 31st March, 1970 and respondents 2&3 stood guarantors for respondent No. 1. In this regard the parties entered into Hire Purchase -cum -arbitration agreement en the same day. The appellant -company, also spent a sum of Rs. 22, 636.09 for the repair of the above -mentioned vehicle and also paid Rs. 2, 431.00 towards its insurance premium. The appellant company earned a sum of Rs. 7,078,00 and adjusted this amount towards the amount .outstanding against respondent No. 1. An amount of Rs. 10,151.11 also remained due as interest calculated at one per cent per month and thus the total amount recoverable was Rs. 60.996.30. A notice was served upon respondent No. 1 to make the above said payment but respondent No. 1 failed to do so. It was further mentioned in the application by the appellant that the parties had agreed upon to refer the case to the above -named arbitrator in case of any dispute.

(3.) RESPONDENT No. I, in his objections, while admitting the execution of the hire purchase agreement, averred that, in fact, the truck was financed by the appellant -company to the extent of Rs. 19,000, - in the month of October, 1967 and at that time the hire purchase agreement was drawn. The appellant -company then entered into fresh agreement with him on 10th July, 1970 by virtue of -which the above said vehicle was taken in an exclusive possession by the appellant -company. The appellant by virtue of agreement undertook to render accounts to him every month but it was not followed the agreement dated 31.3.1970 which was based on fraud. Respondent No, 2 and 3 also submitted objections contending there in that they stood sureties for respondent No. 1 when his truck was financed by the appellant -company on 31.3.1970. After three months the appellant -company, without consulting the. seized the vehicle from respondent No. 1 and entered into another agreement with him and in view of fresh agreement between the appellant and respondent No. 1, they stood absolved of their liability regarding the first agreement.