Bangalore District Court
Mr. Girish R vs M/S. Shriram Transport on 5 September, 2019
IN THE COURT OF LXIV ADDL. CITY CIVIL &
SESSIONS JUDGE (CCH-65) AT BENGALURU CITY
Dated this 5th day of September, 2019
-: P R E S E N T :-
Sri. RAJESHWARA,
B.A., L.L.M.,
LXIV ADDL.CITY CIVIL & SESSIONS JUDGE,
CCH-65, BENGALURU CITY.
A.S.No.157/2015
PETITIONERS/ 1. Mr. Girish R.,
1st Respondent: S/o.Ramesh K.
Aged about 34 years,
R/at.No.33,
Hanumanthnagar,
Opposite Anjaneya Temple,
Near Wonderla Gate,
Hanumanthnagar,
Bidadi Hobli,
Ramanagar District-571511.
2nd Respondent: 2. Mr. Shiva Shankar,
S/o.Kempanna,
aged about 32 years,
R/at. E-499, Kari Obanahalli,
Near Anupama School,
Bengaluru-560-058.
(By Sri Kumaraswamy M.,
advocate)
V/s.
RESPONDENT/ : M/s. Shriram Transport
2 A.S.No.157/2015
Claimant Finance Co.Ltd.,
No.4, 3rd Floor, Mookambika
Complex, Lady Desika Road,
Mylapore, Chennai.
Also at No.3/4, SNR Arcade,
Ayyappa Temple Road,
Near Jalahalli Road,
T.Dasarahalli,
Bangalore-560 057.
represented by its GPA Holder
Mr.Girish K.V.
(By Sri. K.Prasanna Shetty,
advocate)
JUDGMENT
The petitioners filed this suit U/s.34 of The Arbitration and Conciliation Act 1996 (hereinafter referred to as A & C Act) seeking the relief to set aside the award dated 10.7.2015 in Arbitration case No.179/2015 passed by the sole arbitrator Sri. H.A. Prabhakara at Bengaluru.
2. In the petition, petitioners submitted that, learned arbitrator erred in placing petitioners in exparte. Petitioners came to know about proceedings and award only when copy of the arbitral award was served on them. No summons to appear before the arbitrator was served on them. Conclusion arrived by the arbitrator is opposed to law. Opinion of the arbitrator in 3 A.S.No.157/2015 the award that respondents are liable to pay current and future interest @ 18% p.a. from the date of award, till payment U/s.31(7)(6) of A.C.Act 1996 is not in accordance with provisions of agreement. Learned arbitrator erred in directing the petitioners to pay sum of Rs.6,49,525/- with future interest @ 15% jointly and severally. Learned arbitrator failed to apply his mind to the facts of the case while passing award. Learned arbitrator has not appreciated the evidence on record properly, in a judicious manner. For the said reasons, petitioners prayed to set aside the arbitral award.
3. Respondent appeared through counsel.
4. Now, following are the points arising for determination:
1. Whether petitioners show that, the impugned award suffers from materials irregularity as provided U/s.34 of A.C.Act?
2. Whether petitioners are entitled for the relief as prayed for?
3. What order?
5. It is answered for the aforesaid points as under:- 4 A.S.No.157/2015
Point No.1 : In the Negative Point No.2: In the Negative Point No.3: As per final order for the following:
REASONS
6. POINTS NO.1 & 2:- These points are taken together for discussion.
7. Grounds urged by the petitioners is that, no notice to appear for arbitration proceedings was served on the petitioners. Another contention of the petitioners to set aside the impugned arbitration award is that, installments paid by them under hypothecation agreement was not properly adjusted in the statement of account submitted by the respondents before the arbitrator.
8. Perused the award. Para 5 of the arbitration award dated 10.7.2015 it is stated that, notices were sent to the respondents by RPAD by their postal addresses as furnished by the respondents at the time of loan agreement. Despite issuance of notice through RPAD, respondents did not appear on 22.6.2015, the date fixed for their appearance. Hence, as 5 A.S.No.157/2015 per Section 3 of A.C. Act 1996, service of notice held sufficient and petitioners herein were placed exparte. No satisfactory, acceptable explanation is forthcoming from the side of the petitioners herein for their non-appearance before the arbitrator.
9. So far as adjustment of the loan installments paid by the petitioners herein to the respondents as per terms of the hypothecation agreement is concerned, it is just and necessary to consider Ex.C.5, statement of account. In the said Ex.C.5, receipts from the respondents were shown in the statements of account and adjusted for the outstanding amount on the loan account of the respondents herein.
10. So far as testing the arbitration award with the provisions of Section 34 of the A.C.Act is concerned, court has to consider whether the arbitration award is hit by any one of the ingredients of Section 34 of A.C. Act 1996. Those ingredients enumerated U/s.34 of the A.C.Act are public policy, glaring failure of the arbitrator in following principles of fundamental policy of Indian law, Illegality, contravention of 6 A.S.No.157/2015 substantive laws of India or contravention of Arbitration & Conciliation Act, 1966 or the contravention of the terms of the contract or where the findings of the arbitrator are arbitrary, capricious, perverse. Further if decision arrived in the arbitration award create shock on the consciousness of the court, illegality is not trivial and illegality goes to the root of the matter then only, court can interference into the impugned arbitral award.
11. Compared the reasons stated in the arbitration award by the sole arbitrator to arrive for the conclusion to allow the arbitration petition. Perused the reasons assigned by the arbitration award to award 18% interest for the claimed amount and awarded amount till realization. Agreement under arbitration proceedings is a commercial agreement i.e. hypothecation agreement for purchase of vehicle. There is no illegality of any nature in imposing 18% interest as agreed by the parties in the hypothecation agreement.
12. Perused the allegation made in the petition, compared the same with the reasons assigned by the sole 7 A.S.No.157/2015 arbitrator to arrive for the conclusion in the arbitration award. There is no grounds to interference into the well reasoned, legally sustainable arbitration award. Hence, points No.1 and 2 are answered in the Negative.
13. POINT NO.3: In view of findings on points No.1 and 2, arbitration suit is liable to be dismissed. Hence, following order is made:-
ORDER Arbitration suit is dismissed.
No order as to costs.
Draw decree accordingly.
(Dictated to the Judgment Writer, script typed by her, corrected and then pronounced by me in open court on this 5 th day of September, 2019).
(RAJESHWARA) LXIV ADDL.CITY CIVIL & SESSIONS JUDGE, CCH-65, BENGALURU CITY.8 A.S.No.157/2015 9 A.S.No.157/2015 10 A.S.No.157/2015
5.9.2019 Judgment pronounced in open court.
vide separate judgment.
ORDER Arbitration suit is dismissed.
No order as to costs.
Draw decree accordingly.
LXIV ADDL.CITY CIVIL & SESSIONS JUDGE, (CCH-65) BENGALURU CITY.
11 A.S.No.157/2015