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2003 DIGILAW 129 (CAL)

Mahendra Prasad Gupta v. Vijay Gaurav Rasayan Private Limited

2003-03-19

DILIP KUMAR SETH, RAJENDRA NATH SINHA

body2003
JUDGMENT Seth, J. : An application under Section 9 of the Arbitration Act was filed by the appellant, a hirer, in terms of a hire purchase agreement. This was registered as Misc. Case No. 637 of 2001 in the City Civil & Sessions Court, Calcutta. By an order No.8 dated 23rd May, 2001 that application was dismissed on the ground that there was nothing to indicate that the applicant was ready and willing to apply for arbitration. This appeal has been preferred against the said order. 2. On facts, it appears that the agreement was valid till 23rd October, 2000, within which the last eighteenth instalment was payable. Admittedly, fifteen instalments were paid. Sixteenth to eighteenth instalments were not paid. The fifteenth instalment was paid on 10th January, 2001, a little late. The vehicle was seized on 9th February, 2001. It is alleged that the appellant had offered the amount of the balance three instalments, namely, Rs.14,400/- on 10th of February, 2001 but that was not accepted. A notice was issued and then an application under Section 9 of the Arbitration & Conciliation Act, 1996 was preferred. In the application, the applicant had pointed out that a sum of Rs. 49,800/- was claimed to be due. But in the proceedings respondent had claimed Rs. 65,500/-. In this background the present question has to be considered. 3. Learned Counsel for the appellant points out that Section 9 does not postulate that the arbitration proceeding is to be initiated before the Section 9 application is disposed of. On the other hand, he points out that in the application he had indicated his intention to go for arbitration. However, he is ready and willing to pay whatever amount might be determined by the Court but the vehicle should be released. He further points out that he has been deprived of the use of the vehicle from 10th of January, 2001. 4. Mr. Roy, learned Counsel for the respondent, on the other hand, points out that there was no infirmity in the order. There is nothing to indicate that the petitioner was ever agreeable to refer the matter to arbitration. He further points out that the petitioner or the applicant was not the absolute owner of the vehicle. The ownership remains with the respondent till all the hire charges were paid. There is nothing to indicate that the petitioner was ever agreeable to refer the matter to arbitration. He further points out that the petitioner or the applicant was not the absolute owner of the vehicle. The ownership remains with the respondent till all the hire charges were paid. According to him, the overdue payment in Clause 5(a) and other charges and expenses incurred by the respondent are required to be paid and borne by the applicant. He had also pointed out that the applicant had defaulted in payment of instalments right from day one. The calculation sheet of charges on account of overdue interest in terms of Clause 5(a) is appearing at page 35. According to him, Rs. 22,902,89 was chargeable under Clause 5(a) of the agreement, in addition to the instalment due Rs. 14,400/-. He included some other charges to reach the figure of Rs. 49,800/-. 5. Under Section 9 of the Arbitration & Conciliation Act, 1996, an application can be made before or during the arbitral proceeding and at any time after making of the arbitral award but before it is enforced in accordance with the provisions of Section 36. It does not postulate that such an application could be made only during the arbitral proceedings. It can be made even before. There is nothing to indicate that before Section 9 application is disposed of, a party is bound to make the reference to arbitration. When he will make the reference is immaterial for seeking protection under Section 9. It is open to either of the parties to make the reference. It is not the duty cast only upon the applicant-hirer. It equally rests on the respondent financier to refer the matter to arbitration if there is any dispute. While deciding the question under Section 9, the Court is not supposed to settle the dispute or enter into the merits of the dispute. It has only to find out about the existence of the arbitration agreement and a prima facie case in order to protect the interest as an interim measure. 6. In the circumstances, therefore, the learned Court below was not justified in law in dismissing the application solely on the ground that there was nothing to indicate that the applicant was agreeable to refer the matter to arbitration. We are, therefore, unable to persuade ourselves to agree with the contentions raised by Mr. Roy. 6. In the circumstances, therefore, the learned Court below was not justified in law in dismissing the application solely on the ground that there was nothing to indicate that the applicant was agreeable to refer the matter to arbitration. We are, therefore, unable to persuade ourselves to agree with the contentions raised by Mr. Roy. The order appealed against cannot be sustained. 7. By consent of parties, the appeal is treated as on day’s list for hearing. The order appealed against is hereby set aside. The matter is remitted to the learned City Civil Court for deciding the application under Section 9 of the Arbitration Act in accordance with law. 8. Mr. Roy submits that an arbitral proceeding is pending. Learned Counsel for the appellant, however, disputes the same. 9. The learned Trial Court shall take up the hearing of the application under Section 9 within a period of one month from the date of communication of this order. Interim order granted by this Court shall continue till six weeks from date. The learned Trial Court shall decide the matter in accordance with law according to its own wisdom and discretion without being influenced by the continuation of the interim order granted herein or otherwise. 10. The appeal and the application are, thus, disposed of. 11. The allegations made are not admitted by the respondent. Let xerox plain copies of this order, duly countersigned by the Assistant Registrar (Court) be supplied to the learned Counsel appearing for the parties, on usual undertaking. Sinha, J.: I agree.