Research › Search › Judgment

Himachal Pradesh High Court · body

2016 DIGILAW 1417 (HP)

IndusInd Bank Ltd. v. Ramesh Kumar

2016-07-18

RAJIV SHARMA

body2016
JUDGMENT : Rajiv Sharma, J. This petition is instituted against the impugned order dated 16.12.2015, rendered by the learned Civil Judge (Jr. Divn.) Court No. 4, Shimla, H.P., in CMA in Civil Suit No. 53-1 of 2015. 2. Key facts necessary for the adjudication of this petition are that the respondent has entered into loan agreement with the petitioners whereby a sum of Rs. 13,30,000/- was sanctioned as loan along with the finance charges of Rs. 3,69,740/- vide loan agreement dated 21.8.2013. The amount was repayable by the respondent in 46 EMIs. The respondent has made number of defaults in the payment of monthly installments and further failed to perform its part of the obligation towards loan agreement. The respondent instituted a suit against the petitioners for permanent prohibitory injunction for restraining the petitioners from taking the forcible possession of the vehicle in question. The petitioners have moved an application before the learned trial Court under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 to refer the dispute to Arbitral Tribunal in view of clause23 of the loan agreement. The learned Civil Judge (Jr. Divn.) Court No. 4, Shimla dismissed the application on 16.12.2015. Hence, this petition. 3. I have heard counsel for the parties and gone through the impugned order dated 16.12.2015, carefully. 4. The loan agreement was entered into between the parties, as noticed hereinabove, on 21.8.2013. The relevant portion of clause 23.1 reads as follows: “All disputes, differences and/or claim arising out of or touching upon this Agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996, or any statutory amendments thereof and shall be refereed to the sole Arbitration of an Arbitrator nominated by the lender. The award given by such an Arbitrator shall be final and binding on all the parties to this agreement.” 5. The application filed by the petitioners was not contested by the respondent and despite that the application preferred under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 has been dismissed by the learned trial Court. 6. The application filed by the petitioners was not contested by the respondent and despite that the application preferred under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 has been dismissed by the learned trial Court. 6. It is evident from the language of the agreement, as quoted hereinabove, that all disputes, differences and/or claims arising out of or touching upon the Agreement whether during its subsistence or thereafter are to be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The learned trial Court has erred in law by not considering the plain language of the arbitration clause. The non-payment of the loan amount, as agreed between the parties, would amount to disputes, differences and/or claim arising out of or touching upon this Agreement within the ambit of clause 23 of the agreement. The words “disputes, differences or claims” have wider meaning. The parties voluntarily have agreed upon to refer the dispute to the arbitration. The re-payment of the loan is the essence and soul of the loan agreement. 7. It has come on record that the respondent was not paying the installments regularly. The learned trial Court has further erred in law by making observation that the petitioners could take legal recourse to recover the same in the event of default of such liability. The rights of the parties are to be determined as per the loan agreement, more particularly, clause 23(1) of the loan agreement. 8. The learned trial Court has also not taken into consideration the law laid down by the Hon’ble Supreme Court in the cases of P. Anand Gajapathi Raju and others vs. P.V.G. Raju (Dead) and others (2000) 4 SCC 539 , Hindustan Petroleum Corp. Ltd. vs. Pinckcity Midway Petroleum (2003) 6 SCC 503 , Manager Magma Leasing & Finance Ltd. & anr. vs. Potluri Madhavilata 2009 (10) SCC 103 , Sukanya Holdings (P) Ltd. vs. Jayesh Pandya and another (2003) 5 SCC 531 and Orix Auto Finance (India) Ltd. vs. Jagmander Singh and another (2006) 2 SCC 598 . These judgments have been considered by their lordships of the Hon’ble Supreme Court in the case of M/S Sundram Finance Limited and another vs. T. Thankam, reported in AIR 2015 SC 1303 . These judgments have been considered by their lordships of the Hon’ble Supreme Court in the case of M/S Sundram Finance Limited and another vs. T. Thankam, reported in AIR 2015 SC 1303 . Their lordships have held that once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. In this case also, the suit for injunction was filed by the respondent with prayer to restrain the first and second defendant institutions and their men from illegally taking away from the possession of plaintiff or her employee, or interfering with the use or causing damage to the car in the ownership and possession of the plaintiff by way of decree of injunction. Their lordships have held as follows: “15. Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law – generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court.” 9. Accordingly, the petition is allowed. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court.” 9. Accordingly, the petition is allowed. Order dated 16.12.2015 rendered by the learned trial Court is set aside. The learned trial Court is directed to pass fresh orders on the application filed by the petitioners under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996, within a period of one month after the receipt of the certified copy of this judgment. Pending applications, if any, shall stand disposed of.