HANUMAN SINGH Vs. MAHINDRA FINANCE MAHINDRA

JUDGEMENT

(1.) INSTANT application has been filed Under Section 11(6) of Arbitration & Conciliation Act, 1996 for appointment of Arbitrator.

(2.) APPLICANT purchased a Jeep on hire purchase basis bearing Registration No. RJ.01.P.5111 from respondent for a consideration of Rs. 3,69,800/ on 8th May, 2003 and respondent being a finance company advanced as alleged him a total amount of Rs. 3 lacs which was re -payable in 23 instalments. Applicant has come out with the case that despite he was making regular payment of its instalment, without any notice the respondent took away his vehicle on 9th August, 2005 on the premise that there is a default in payment of instalment. Applicant served legal notice for making appointment of Arbitrator since he disputed that there was no such instalment due and continuously payments were made by him, dated 4th December, 2006 [Ann.4], which was duly served in the office of respondents. This fact is not disputed that under the loan agreement executed between the parties there is Clause 29 for settlement of disputes through arbitration. Relevant Clause 29 of the loan agreement is reproduced as under:

(3.) COUNSEL for respondents submits that very notice served by the applicant cannot be said to be in consonance with the provisions of the Act. Since they themselves have proposed for making appointment of Arbitrator, whereas under Clause 29 of agreement it was lender who has discretion to make appointment. As such, it cannot be considered to be legal notice as provided under law. He further submits that once lender has appointed Arbitrator by invoking Clause 29 of the agreement may be after filing of this application on 3rd May, 2007, the present application has become infructuous and no appointment can now be made. In opinion of This Court , submission made by the counsel for respondents has no substance for the reason that legal notice was served by the applicant to make appointment of Arbitrator while invoking Clause 29 of the agreement and merely because he has proposed few names that in no manner could cease right of appointment which vests with the lender by invoking Clause 29 of the agreement in question.