Jhelaram v. Bhopraj — 1994 DIGILAW 582 (MP)

ORDER 1. This revision has been filed against the order dated 23.9.91 of 2nd Addl. District Judge, Neemuch, passed in Civil suit No. 34-A/91, whereby the order regarding interim custody of the truck, passed by the Arbitrator vide order dated 23.8.91 has been affirmed. 2. The brief history of the case is that N.A.1 as plaintiff filed an application u/s. 18 of the Arbitration Act. One Mohanlal Sharma was the sole Arbitrator. Regarding the dispute of the truck it was alleged that there was an agreement of Arbitration between N.A. Nos. 1 & 2 and thereby Shri Mohanlal Sharma while acting as sole Arbitrator, was requested to pass interim award under section 27 of the Arbitration Act. The Arbitrator passed an interim order for custody of the truck which was for the time being with the applicant hereunder an agreement of transfer between him and N.A. 2 Mohammad Salim. An objection was raised by the applicant here, but the same was rejected and the interim custody of the truck was given to N.A. 1. Hence, this revision. 3. The contention of the learned counsel for the applicant is that he is not bound by the agreement of arbitration between N.A. 1 Bhopraj and N.A. 2 Mohammad Salim. The 2nd contention of the learned counsel for the applicant is that Arbitrator has proceeded ex-parte against him and no ex-parte order regarding the custody of the truck could be given. The third contention of the learned counsel for the applicant is that the applicant was in possession of the truck because of the independent contract between the applicant and Mohammad Salim and, therefore, arbitration agreement between Bhopraj and Salim is not binding on him. The 4th contention of the learned counsel for the applicant is that there was an endorsement in the original registration certificate whereby the applicant was shown as transferee but Mohammad Salim fraudulently made a representation before the R.T.O. that the original has been lost and obtained a duplicate registration certificate and in that duplicate certificate endorsement in favour of Bhopraj was made and, therefore, NAs cannot be allowed to take advantage of fraud and forgery committed by them. As against it, learned counsel for the NAs has submitted that the applicant is a person claiming under the N.A. Mohammad Salim as being a transferee from Mohammad Salim and since Mohammad Salim was bound by an arbitration the same would be applied to the applicant as well. In reply to second contention, learned counsel for the NA" has submitted that a notice was issued to the applicant, but he failed to appear and now he cannot make grievance that the ex-parte order has been passed. In reply to third contention of counsel for the applicant, learned counsel for the NAs has submitted that applicant being a transferee of Mohammad Salim who is bound under the agreement of arbitration and, therefore, the applicant cannot escape from the liability. In reply to contention No.4 of the learned counsel for the applicant, learned counsel for the NAs has submitted that the document produced in the case should be read as it is specially at this stage and his agreement of hire purchase is prior to sale agreement of applicant i.e., of 20th October' 86 and the fact of fraud and forgery can be demonstrated by the applicant before the Arbitrator or before the Court as the case may be. The document" cannot be rejected as forged unless the other party has been given a chance to rebut it. 4. Now, therefore, it will have to be seen as to whether there was an agreement of arbitration between Bhopraj and Mohd. Salim and whether the applicant is a person claiming under Mohd. Salim and for that reason whether he is bound by the agreement of arbitration. Secondly whether the applicant had notice of the arbitration proceedings and whether the interim order of arbitration is binding on him. 5. It is an established principle of law that revisional Court, even if it can come to a different conclusion on the close scrutiny of the evidence shall not disturb the finding of fact if it is supportable otherwise. Documents produced by the parties goes to show that there was a contract of hire purchase between respondent-NAs 1 and 2 and the same contract was entered into on 20th Oct. 86. The respondent No.2 Mohd. Salim was in possession of the truck in pursuance of that hire purchase agreement. The agreement which has been shown to be Ex. Documents produced by the parties goes to show that there was a contract of hire purchase between respondent-NAs 1 and 2 and the same contract was entered into on 20th Oct. 86. The respondent No.2 Mohd. Salim was in possession of the truck in pursuance of that hire purchase agreement. The agreement which has been shown to be Ex. P/4 contains a condition of reference of dispute to the arbitrator. This condition has been enumerated in page 8 of the Hire-purchase Agreement. 6. The applicant here entered into an agreement of transfer of vehicle with respondent No.2 Mohd. Salim on 3.1.1987. It has been alleged that Rs. 8,001/- was paid on that day and thereafter Rs. 34,000/- was paid on 6.2.87 and only Rs. 3,000/- out of the price of the truck were withheld for the purpose of making payments of tax, etc. The truck stood transferred in the name of applicant on 11.2.87. It has been submitted by learned counsel for the applicant that respondent No.2 Mohd. Salim falsely represented before the Transport Authority that the original Registration has been lost and thereby obtained the duplicate registration certificate. Transfer in favour of respondent No.1 was effected thereafter. 7. It has also been submitted that under the Motor Vehicles Act the owner of the vehicle should be presumed to be the person in whose name the vehicle has been registered and since the duplicate was obtained on a misrepresentation of fact; that goes to show that all other document" were created subsequently and the same, therefore, could not be acted upon. 8. It is difficult to accept the contention of the learned counsel for the applicant as it is difficult for this Court to come to a conclusion about the forgery and misrepresentation that point can be raised only before the Arbitrator or the Court as the case may be after giving the other party an opportunity of rebutting the same and, therefore, at this stage the documents produced by the parties shall have to be read as it is. 9. It is also an accepted law that burden of proof lies on one who wants the document to be read other than it purports to be and, therefore, the burden lies on the applicant here to demonstrate the documents produced by the other party is forged and fabricated. 9. It is also an accepted law that burden of proof lies on one who wants the document to be read other than it purports to be and, therefore, the burden lies on the applicant here to demonstrate the documents produced by the other party is forged and fabricated. In such a situation in the absence of such proof an opportunity to the other party, this Court is bound to read the document as it is. 10. There may be a case where the obvious reading of the document may show falsity or forgery and the Court may act upon it but that is not the case here' and, therefore for the purpose of decision of this revision it will have to be accepted that there was an earlier agreement of hire-purchase between the respondent No.1 and 2. Respondent N.A. No.2 Mohd. Salim was in possession of the vehicle in pursuance of that agreement. The hire-purchase Agreement, as referred above, contains the condition of reference of dispute to Arbitrator also. Admittedly the applicant is a purchaser from Mohd. Salim and the document of purchase by applicant is subsequent to the document of hire-purchase. 11. Section 3 of Arbitration Act, 1940 provides for the provisions implied in Arbitration Agreement which reads as follows: "An arbitration agreement, unless a different intention is expressed therein shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference." 12. Rule 6 and 7 of Schedule I as referred in section 3 of the Act reads as follows :- "The parties to the reference and all persons claiming under them shall, subject to the provisions of any law for the time being in force, submit to be examined by the arbitrators or umpire on oath or affirmation in relation to the matters in difference and shall, subject as aforesaid, produce before the arbitrators or umpire all books, deeds papers accounts writings and documents within their possession or power respectively, which may be required or called for, and do all other things which, during the proceedings on the reference, the arbitrators or umpire may require." -x- -x 7. The award shall be final and binding on the parties and persons claiming under them respectively." The plain reading of Rule 7 would show that the Award shall be binding on person claiming under them and similarly all persons claiming under them shall submit to be examined by the arbitrators or umpire on oath or information in relation to the matters in difference and shall produce before the Arbitrator all books, deeds, papers, accounts writings and documents within their possession. 13. The applicant is a transferee from respondent-N.A. 2. The heir legati and assignee are taken to be the persons claiming under a party to the agreement. Assignee has been defined as follows in the Law Lexicon :- "Assignee: One to whom an assignment has been made; one to whom rights have been transmitted, by particular title, such as conveyance, gift, legacy or other transfer." 14. The applicant here being a transferee would be deemed to be an assignee and would further be deemed to be a person claiming under respondent NA. No.2 and, therefore, he is bound by the agreement of arbitration entered into by Mohd. Salim respondent-NA No.2. 15. Learned counsel for the applicant has referred to 3 case reported in AIR 1970 Delhi 19 (Shri Patanjal and another v. M/s. Rawalpindi Theatres P. Ltd.) a Division Bench case and submitted that person not parties to the agreement cannot enforce the agreement. Similarly the applicant not being a party to the agreement of arbitration. is not bound by the Award. 16. The facts of case referred are absolutely different. The person referred therein was neither a party to the arbitration agreement and nor was claiming under such party. Here the case is different. Petitioner-applicant is a transferee from respondent-NA No.2 and, therefore, he will be deemed to be a person claiming under him. 17. Learned counsel for the applicant, therefore, referred to a case reported in AIR 1960 Patna 201 (Deepnarain Singh and Ors. v. Mst. Dhaneshwari and Ors). But that case does not help the petitioner in anyway. In that case all the persons interested in the dispute of land were not made parties to the Agreement of Arbitration and, therefore, the same was nut held to be binding on them. This is not the case here. 18. v. Mst. Dhaneshwari and Ors). But that case does not help the petitioner in anyway. In that case all the persons interested in the dispute of land were not made parties to the Agreement of Arbitration and, therefore, the same was nut held to be binding on them. This is not the case here. 18. In view of the discussion above in the opinion of this Court 'the petitioner applicant here being a transferee from respondent NA NO.2 who is bound by agreement of arbitration will be deemed to be a person claiming under him. 19. It is an admitted fact that applicant was not made a party before the Arbitrator though a notice was sent to the applicant and, thereafter an ex parte interim award was granted whereby the truck was directed to be handed over to respondent N.A. No. 1. 20. Since the applicant is a person claiming under respondent NA No.2, therefore, he ought to have been made a party in the case and since he was not made a party in the case, any interim award in his absence passed by the Arbitrator and affirmed by the Court, will not be binding on him. Mere service of notice is not sufficient as there is a vast difference between mere information given to the party and a person called upon to answer the averments as a party in the case and, therefore, mere notice is not sufficient and the interim Award cannot be accepted to be binding on the applicant here. 21. The petitioner here has been permitted to retain the vehicle (motor truck) on furnishing Bank Guarantee of Rs. 40,000/- (This Court hopes that must have been renewed from time to time). In such a situation it would be just and proper to permit the petitioner to retain the vehicle on furnishing a renewed Bank Guarantee till further Award which will be passed by the Arbitrator. 22. As a result the interim Award passed by the Arbitrator and affirmed by the District Judge is set-aside The applicant is permitted to retain the vehicle till further orders of the Arbitrator and the Court on furnishing Bank Guarantee as above. The petitioner shall submit to the jurisdiction of the Arbitrator who shall pass Award interim or final as the case may be according to law. The petitioner shall submit to the jurisdiction of the Arbitrator who shall pass Award interim or final as the case may be according to law. In the facts and circumstances of the case the parties shall bear their own cost. Counsel fee Rs.400/-. The parties shall appear before the Sub-ordinate Court on 6th of September, 94 and shall appear before the Arbitrator thereafter if directed by the Court.