Punjab-Haryana High Court
Kotak Mahindra Bank Ltd vs Avtar Singh Son Of Gurdev Singh on 7 September, 2012
Author: K. Kannan
Bench: K. Kannan
CR-6302-2011(O&M) [1]
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CR No.6302 of 2011(O&M)
Date of Decision: 07.09.2012
Kotak Mahindra Bank Ltd., Branch Ludhiana, S.C.O. No.120,
6th Floor, Feroze Gandhi Market, Ludhiana.
... Petitioner
Versus
Avtar Singh son of Gurdev Singh, resident of Village Dirba,
Tehsil Sunam, District Sangrur and others.
... Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
Present: Mr. A.S. Virk, Advocate,
for the petitioner.
Mr. Raman Mohinder, Advocate,
for the respondents .
*****
1.Whether reporters of local papers may be allowed to
see the judgment? NO
2.To be referred to the reporters or not? NO
3.Whether the judgment should be reported in the
digest? NO
K. KANNAN, J. (Oral)
1. The revision is against the order rejecting an application filed under Section 8 of the Arbitration and Conciliation Act (for short, 'the Act') by the defendant for reference to the Arbitrator. The petitioner is a finance company which, admittedly, allowed the respondent a benefit of hire purchase of a tractor-trailer. It was claimed by the plaintiff in the suit that the financier had forged his signatures on the alleged documents of re-possession and has purported to have CR-6302-2011(O&M) [2] effected a sale of seized vehicle to the 5th respondent by again forging documents for purporting to contain his signatures. Since the validity of the documents on the basis of which the petitioner/financier was asserting its right, the Court in the application filed under Section 8 of the Act referring to the decision of the Supreme Court in N. Rathakrishan v. M/s Maestro Engineers & Ors. 2009(3) ACJ 643 dismissed the petition. The Supreme Court was considering a case relating to an objection taken by the defendant that a suit relating to partnership was not competent and that it should be referred to the Arbitrator being a dispute covered under the partnership deed through an arbitrator clause. The contention that fell for consideration was whether the appellant/defendant had been driven out by forging the accounts of the firm and that the alleged retirement from partnership said to have been signed by the appellant was brought by forged instrument or not. After setting aside the finding of the trial Court and the High Court that it was not an arbitral dispute, the Supreme Court considered the point of whether it would be appropriate to refer the matter to the Arbitrator in a case where serious allegations of fraud and forgery were attributed to the parties, who had sought for relief in the suit. The Supreme Court observed that with serious doubt about the genuineness of the document, it would not be appropriate to have the matter to be dealt with by CR-6302-2011(O&M) [3] the Arbitrator and, therefore, upheld the decision of the trial Court and the High Court rejecting a prayer for reference to arbitration. The points involved in the present case are not different.
2. The learned counsel appearing for the petitioner contends that it would become possible for other hirer to take a false plea that instruments of re-possession by the financier are forged and scuttle the process of realization of moneys and force the financier to a litigation without even entering a lawful clause for arbitration. The counsel would also argue that the competency or otherwise of the Arbitrator could still have been a subject of challenge before the Arbitrator himself in the manner contemplated under Section 16 of the Act. The decision of the Supreme Court has been considered with reference to a similar situation of an allegation of fraud. The continuation of the suit does not mean the grant of decree itself. The plaintiff was still be required to prove what he was contending for and the petitioner/financier would be bound to again prove that the documents which they were relying on to enforce the right of recovery and sale of the tractor-trailer would require to be proved at the trial. If the contentions were found to be false, it is a different matter altogether that the plaintiff's suit would fail and defendant's action would stand vindicated. As of now, it is not a matter that should fall within the CR-6302-2011(O&M) [4] jurisdictional ambit of the Arbitrator and I would take the decision cited before the Court below and referred by the counsel before me as fully governing the issues involved in this case.
3. The order passed by the Court below is confirmed and the civil revision is dismissed.
7th September, 2012 ( K. KANNAN ) Rajan JUDGE