Delhi District Court
Ritu Sharma Wife Of Shri Nitin Sharma vs L & T Finance Company Ltd on 30 May, 2015
IN THE COURT OF SURESH KUMAR GUPTA,
ADDITIONAL DISTRICT JUDGE02 & WAKF TRIBUNAL,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI
Arbtn No. 373/14
Unique ID No. 02403C0074842014
1. Ritu Sharma wife of Shri Nitin Sharma.
2. Shri Nitin Sharma son of Shri Pitambar Sharma.
Both residents of
House No.2, Pratap Khand,
Vishwakarma Nagar,
Shahdara, Delhi32. .....Petitioners
Versus
1. L & T Finance Company Ltd.
Through its Manager,
6 Floor, DCM Building,
th
16, Barakhamba Road,
Connaught Place, New Delhi110001.
2. M. Sankaranaryanan
(Sole Arbitrator)
1/3, Ground Floor, Chadrodaya,
CST Road, Opp. Swastic Off Sion, Trombay Road, Chambur,
Mumbai400071. ......Respondents
Date of Institution: 13.05.2014
Page 1 of 7
Date of Arguments: 27.05.2015
Date of judgment : 30.05.2015
Final Order: Petition
returned
JUDGMENT
1. The petitioners have filed a petition U/s. 34 of Arbitration and Conciliation Act (hereinafter referred to as Act) with the averments that on 28.08.2012 a vehicle bearing registration no. UP 14 DT 1657 was purchased by the petitioners for a sum of Rs. 6 lacs. The respondent no.1 has financed the vehicle by providing a loan of Rs. 4,60,000/ qua which loan agreement dated 28.08.2012 was executed. The said amount was payable in 48 installments of Rs.12,700/ each. They were regularly paying the installments but failed to pay the installments for the month of January and Feburary, 2013. On 21.02.2013, the petitioner no.2 was driving the vehicle from Seema Puri towards Shahdra. The executive of respondent no.1 has forcibly taken the possession of vehicle and also obtained signatures of petitioner no.2 on some blank papers. A complaint dated 21.02.2013 was lodged vide DD No.23 B at PS, Seema Puri. They met the officers of respondent no.1 on the next day and narrated the incident to them who offered a proposal to surrender the vehicle for settlement of the loan amount. The offer was accepted by them thats why no complaint was made by them. On 18.04.2014 they received the exparte award from respondent no.2. The award is challenged on the grounds that they were never served with any notice regarding appointment of Page 2 of 7 sole arbitrator. Their addresses have been wrongly reflected in the exparte award. The copy of claim was never supplied to them. The present petition has been filed from the date of knowledge of the arbitration award dated 02.04.2014. The Court has territorial jurisdiction to decide the present petition as office of the respondent no.1 is situated within the jurisdiction of this court and even agreement was executed within the jurisdiction of this Court.
2. The respondent no.1 has filed the reply with the preliminary submissions that petitioners have approached for a loan for the purchase of Tata Indigo car bearing registration No. UP 14 DT 1657. A loan of Rs. 4,60,000/ was granted. A loan cum hypothication agreement dated 28.08.2012 was executed between respondents no.1 and 2 by petitioner no.1 with petitioner no.2 as coborrower. The loan amount was disbursed to the petitioners which was repayable in 48 installments of Rs. 12,700/ each starting from 10.09.2012. The petitioners failed to pay the loan amount. On 21.02.2013 an amount of Rs.559482/ was payable by the petitioners. The respondent was constrained to take the possession of vehicle on 21.02.2013. A post repossession notice dated 02.03.2013 was issued to the petitioners to pay a sum of Rs.4,57,531/ failing which asset shall be sold. The petitioners did not make the payment upon which the vehicle was sold on 31.07.2013 for a sum of Rs.1,91,000/ in order to minimise the loss. A notice dated 13.01.2014 was issued to the petitioners for the repayment of Rs.2,79,482/ alongwith Page 3 of 7 interest @ 36 per annum failing which matter shall be referred to the sole arbitrator. The petitioner did not respond upon which dispute was referred to ld. Sole arbitrator in terms of Clause 12 of the agreeement dated 28.08.2012. Ld. Sole arbitrator issued communication dated 28.01.2014 and fixed the next date of hearing as 24.02.2014 by stating that in the absence of the parties, the matter would be proceeded exparte. On 24.02.2014, the petitioners failed to appear and proceedings were adjourned to 12.03.2014 for final hearing and disposal. The petitioners did not appear and one more opportunity was granted and proceedings were adjourned to 27.03.2013. The Ld. Arbitrator passed the award on 02.04.2014 and accepted the claim filed by the respondent. The jurisdiction was reserved for Mumbai Courts under the agreement. The arbitral proceedings have been conducted at Mumbai so Courts situated at Mumbai have jurisdiction over the matter. The petitioners were well aware of the arbitral proceedings as all the notices/communications were sent at the three addresses on the record of respondent No.1. The award was also sent at the said address. There is a deemed service of notices/communications in terms of Section 27 of General Clauses Act.
3. On merits, it is averred that a loan of Rs.4,60,000/ was sanctioned and disbursed to the petitioners regarding with the loan cum hypothication agreement dated 28.08.2012 was executed. The amount was repayable in 48 installments of Rs.12,700/ each. The petitioners failed to repay the amount Page 4 of 7 and vehicle was repossessed in terms and conditions of the agreement. There was no proposal from the respondents to settle the matter. The petitioners were fully aware about the arbitral proceedings so it cannot be said that exparte award was passed. The award was passed after giving full opportunity to the petitioners. The award does not suffer from any infirmity. This Court does not have jurisdiction to try and entertain the present petition. The allegations of the petitioners are false and denied.
4. Ld. Counsel for petitioners submitted that this Court has jurisdiction to entertain the present petition as petitioners are residing in Delhi. He further submitted that loan cum hypothication agreement dated 28.07.2012 was executed at Delhi and loan was also disbursed at Delhi. He further submitted that office of respondent no.1 is at Delhi. He further submitted that vehicle was repossessed at Delhi. He further submitted that cause of action has arisen at Delhi so this Court has jurisdiction to decide the present petition. He has placed reliance on Arbitration petition (L) No.1280/2012 titled as Gayatri Prashad V. Drivedi Vs. Mahindra & Mahindra Financial Services Ltd. decided on 04.10.2012 by Hon'ble High Court of Bombay and Jose K Varghese (alias) Rajan Vs. Ashok Leyland Finance Ltd. decided on 07.06.2007 by Hon'ble High Court of Madras.
5. Ld. Counsel for the respondents submitted that parties are bound by the Page 5 of 7 terms and conditions of the agreement and the loan cum hypothication agreement dated 28.08.2012 shows that Courts at Mumbai shall have jurisdiction over the dispute. He submitted that this Court has no jurisdiction to decide the present petition and placed reliance on Civil Appeal No. 5086/2013 titled as M/s. Swastic Gases P Ltd. Vs. Indian Oil Corporation Ltd. decided on 03.07.2013 by Hon'ble Apex Court of India.
6. Heard and perused the record. It is admitted fact that petitioners have approached the respondent no.1 for the grant of loan. A loan of Rs.4,60,000/ was sanctioned and disbursed to the petitioners by respondent no.1 regarding which loan cum hypothication agreement dated 28.08.2012 was executed at Delhi. It is admitted fact that loan amount was repayable in 48 installments of Rs.12,700/ each. Clause 12.5 of the loan cum hypothication agreement says that the venue of arbitration shall be at Mumbai or such other place that the lender may in the sole descrition determines and the Courts in Mumbai or such other place shall have exclusive jurisdiction.
7. Clause 12.5 of the agreement gives a liberty to the respondent no.1 to change the place of jurisdiction. The place of jurisdiction can only be changed by the respondent no.1. The Clause further says that venue of arbitration shall be at Mumbai and Courts at Mumbai shall have exclusive jurisdiction. The execution of loan cum hypothication agreement is not in dispute. The Page 6 of 7 parties have entered into the agreement after fully understanding the import of the terms so agreed. The parties have entered into an agreement with their eyes wide open. They knew the terms thereof. The agreement has specified the particular place of jurisdiction then Courts situated at that place have jurisdiction over the issue. The jurisdiction of all other Courts stands excluded. The parties have excluded the jurisdiction of all other Courts by inserting the Clause that Courts at Mumbai shall have exclusive jurisdiction. In view of this fact, the Courts at Delhi do not have any jurisdiction to entertain and try the present petition. I am fortified by the view taken by the lordship in M/s. Swastic Gases P Ltd. Vs. Indian Oil Corporation Ltd., supra. With due respect, the case law cited by ld. Counsel for the petitioners is not relied upon in view of the law laid down by Hon'ble Apex Court of India in M/s. Swastic Gases P Ltd. Vs. Indian Oil Corporation Ltd., supra.
8. This Court has no jurisdiction to enterain this petition. The petition is returned to the petitioners to enable them to present the same before the Court of competent jurisdiction within a period of one month from today. There is no order as to the costs. File be consigned to record room. Announced in the open court on 30 day of May, 2015 th (SURESH KUMAR GUPTA) ADJ02 & WAKF TRIBUNAL/ NEW DELHI Page 7 of 7