Bangalore District Court
/ : Mr.Boopesh Reddy vs M/S.Shriram Transport Finance on 12 December, 2018
IN THE COURT OF THE VI ADDL. CITY CIVIL & SESSIONS JUDGE
AT BENGALURU CITY : (CCCH.11)
Dated this the 12th day of December, 2018
PRESENT: Sri. Rama Naik, B.Com., LL.B.,
VI Addl.City Civil & Sessions Judge,
Bengaluru City.
A.S.NO:63/2014
PLAINTIFF / : Mr.Boopesh Reddy
S/o.Mr.Dorai Swamy Reddy,
Aged about 35 years,
No.210, 2nd 'H' Main,
Kasturinagar, Kalyan Nagar,
Bengaluru-560 043.
[By Pleader Sri.Prakash.K.A]
/Vs/
DEFENDANTS : M/s.Shriram Transport Finance
Co.Ltd.,
Bangalore Regional Office,
2nd Floor, No.29/A, K.H.Road,
Bengaluru-560 027.
Reptd.by its GPA Hoder-
Mr.Nagabhushan.M.C
[By Pleader Sri.M.Ashok Kumar]
--
AS.63/2014
2
JUDGMENT
This suit is filed by the Plaintiff under Section 34 of the Arbitration and Conciliation Act, 1996 Read with Section 151 of Code of Civil Procedure 1908, for setting aside the arbitration award dated 28.01.2014 passed in Arbitration Case No.62/2011.
2) The brief facts of the Plaintiff's case are that, the Plaintiff approached the Defendant in the year 2008 for financial assistance to the tune of Rs.4,00,000/- for purchase of TATA MOTORS Vehicle bearing registration No.KA-53-3442. Accordingly, the Defendant sanctioned loan of Rs.4,00,000/-, vide Loan-cum-Hypothecation Agreement dated 15.09.2008. A Guarantee Agreement was also executed by the surety. The loan was to be paid in monthly installments. There was loss in the business of the Plaintiff, hence, he could not pay the monthly installments promptly. Taking advantage of this irregular payment, the Defendant seized the vehicle unlawfully and illegally. The Defendant sold the vehicle AS.63/2014 3 which was worth more than Rs.3,50,000/-. The loan amount has been paid out of the sale proceeds. The Defendant filed Arbitration Case in AC.No.62/2011 before the Arbitral Tribunal at Hosur, Tamil Nadu on 30.04.2011 against the Plaintiff stating that the Plaintiff is in due of Rs.4,97,254/-. Accordingly, the award came to be passed on 28.01.2014 unilaterally.
That the award passed is in violation of the principles of natural justice and the Plaintiff was not given an opportunity of being heard. The arbitration award also suffers from infirmities, since the Plaintiff has already paid the loan amount to the Defendant. The Plaintiff has contended that, the award passed by the Arbitrator has been received on 17.02.2014 and the suit has been filed within 60 days from the date of receipt of the arbitration award. The Plaintiff has also stated that, at any event, the suit has been filed within 90 days from the date of receipt of arbitration award. A separate application has been filed under Section 34(3) of the AS.63/2014 4 Arbitration and Conciliation Act, for condonation of delay, hence, prays for setting aside the arbitral award.
3) After institution of the suit, the suit summons was issued to the Defendant and the Defendant appeared through its counsel, but it has not chosen to file its written statement. Hence, the written statement of the Defendant has been taken as nil.
4) Heard. Perused the pleadings and the materials placed in this case.
5) The points that arise for my consideration are:-
(1) Whether the Plaintiff has made out any of the grounds as enumerated in Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the impugned award ?
(2) Whether the Plaintiff has made out any grounds to condone the delay in filing this suit?
(3) What Order?
AS.63/2014 5
6) My answer to the above points are :-
Point No.1 - In the Negative;
Point No.2 - In the Negative;
Point No.3 - As per final order, for the following :
REASONS
7) POINT NO.1 : The Plaintiff has challenged the impugned award dated 28.01.2014 passed by the sole Arbitrator in A.C.No.62/2011, wherein, the Plaintiff is directed to pay a sum of Rs.4,97,254/- with future interest at the rate of 18% per annum from the date of reference till the date of realization and costs of Rs.3,330/-.
8) The Plaintiff's only contention is that, the award is passed in violation of principles of natural justice, the Plaintiff was not given an opportunity of being heard in the arbitral proceedings. At this juncture, it is relevant to look into the arbitration award. The learned Arbitrator, in his award, has specifically mentioned that, notice of enquiry has been issued to the Respondents AS.63/2014 6 No.1 and 2 and the same has been returned that 'Addressee not found' and a paper publication has also been made. It is relevant to mention Para-6 of the award, which reads as follows :
"6. On receipt of the claim petition the same has been registered as Arbitration case No.62/2011 and Notice of Enquiry has been issued against the Respondent No.1 and 2. Notice in respect of R-1 and R-2 has been returned stating "Addressee not found". Later Paper publication has been carried out. But in spite of issuing Notice of Enquiry both the Respondent No.1 and 2 have remained absent before the Arbiral Tribunal. Hence, Respondent No.1 and 2 have been placed Exparte."
9) From reading of the award, it is clear that, after referring the dispute to the learned Arbitrator, the learned Arbitrator issued notice of enquiry to the Plaintiff and his surety to their given address, but the same was returned with endorsement that 'Addressee not found'. Later, Paper Publication was also taken. In spite of publishing notice by way of paper publication, the Plaintiff and his surety remained absent before the learned Arbitrator, hence, the learned Arbitrator placed them ex-parte and proceeded with the arbitral AS.63/2014 7 proceedings. It is nowhere contended in the plaint that, the Plaintiff was not residing in the address which the Arbitrator has mentioned in the award. The Arbitrator has specifically mentioned in the award that, the Plaintiff remained absent and did not choose to contest the matter in spite of notice thus given and in spite of paper publication. Moreover, in view of admission of the loan transaction, it can be presumed that the information regarding address which the Arbitrator has mentioned in the award was given by the Plaintiff at the time of availing loan by him. Therefore, the learned Arbitrator has rightly said that the Respondents [Plaintiff and his surety] failed to appear in spite of notices thus given to their given address. More so, the award addressed to the Plaintiff to his given address was duly served to the Plaintiff as the postal authorities re- directed the same to his new address. Under such circumstances, it cannot be said that the Plaintiff was not duly served with the notice of arbitral proceedings and that he was not given sufficient opportunity of AS.63/2014 8 being heard in the arbitral proceedings. When such being the case, the question of violation of principles of natural justice by the learned Arbitrator does not arise at all. Having regard to the facts and circumstances of this case, it can be said that, no such natural justice has been violated in this case.
10) In this suit, the Plaintiff has admitted the loan transaction and also admitted that he could not pay the installments promptly. His only contention is that, due to loss of business, he could not pay the loan amount promptly. At this stage, it is relevant to mention Para-3 and 4 of the plaint, which reads as follows :
" 3. The Plaintiff has approached the Defendant during 2008 for availing financial assistance to the tune of Rs.4,00,000/- (Rupees Four lakhs only) for purchase of Tata Motors Vehicle bearing Regn.No.KA-53-3442. The Defendant after verifying the credentials of the Plaintiff sanctioned the loan amount of Rs.4,00,000/- (Rupees Four lakhs only) vide Loan-cum-Hypothecation Agreement dated 15.09.2008 and one more person as guarantor under Agreement No.STFC/MDWL/2080915001.
4. The Plaintiff after availing the loan, has paid the monthly EMIs to the AS.63/2014 9 Defendant for some time and since there was loss in the business of the plaintiff, the Plaintiff could not promptly pay the balance EMIs to the Defendant."
11) It is important to note that, the arbitral award cannot be set aside on the ground of loss of business, which caused the Plaintiff not to pay the loan amount promptly, hence, this ground does not come to the aid of the Plaintiff.
12) The Plaintiff contends that, the Defendant has sold the vehicle of the Plaintiff, which was worth more than Rs.3,50,000/- and has taken the full amount out of the sale proceeds. The Plaintiff could have taken such contention before the learned Arbitrator by placing the materials before the learned Arbitrator. However, he has not chosen to appear before the learned Arbitrator in spite of notice thus given to him. Be that as it may. The Plaintiff could have produced materials before this court to show that the entire loan amount has been paid out of the sale proceeds of the vehicle. However, he has AS.63/2014 10 not produced any such materials to substantiate his contention. Under such circumstances, this contention of the Plaintiff can be termed as evasive, which is not supported by any material evidence. Hence, this court comes to the conclusion that in spite of notice thus given, the Plaintiff remained absent and did not avail the opportunity, which was given to him to contest the arbitral proceedings and to substantiate his contentions before the learned Arbitrator; accordingly, I answer Point No.1 in the negative.
13) POINT NO.2 : As contended by the Plaintiff, he has received the award on 17.02.2014. The Plaintiff has stated that he has filed this suit within 90 days from the date of receipt of award. On perusal of the plaint makes it clear that, he has filed this suit on 16.06.2014. As enumerated in Section 34(3) of the Arbitration and Conciliation Act, the application under Section 34 of the Arbitration and Conciliation Act, has to be filed within three months from the date of receipt of AS.63/2014 11 award. Having taken into consideration of the Plaintiff's case, the Plaintiff ought to have filed this suit on or before 17.05.2014. In other words, he has filed the suit after lapse of three months. Knowing this, the Plaintiff has filed application under Section 34(3) of the Arbitration and Conciliation Act, for condoning the delay in filing this suit. Of course, proviso to Section 34(3) of the Arbitration and Conciliation Act provides grace period to the party to file the suit beyond 3 months from the date of award, if sufficient cause is shown. Here, in this case, the Plaintiff has nowhere in his plaint has made out any such sufficient ground in filing the suit after after lapse of statutory period. He has stated in his affidavit filed in support of the application at I.A.No.1 that, on seeing the award, he was put to great shock that he need to pay further sum of Rs.4,97,254/- and he fell ill in the month of May 2014, hence, he could not contact his Advocate to give necessary instructions to file the suit. The reason assigned by the Plaintiff cannot be considered as sufficient cause. The Plaintiff was in AS.63/2014 12 receipt of award on 17.02.2014. Even assuming that the Plaintiff was not keeping well during the month of May 2014, there were no impediments for the Plaintiff to challenge the award during the months of February, March or April, 2014. The Plaintiff has not urged any grounds in his pleadings that he was prevented to do so in challenging the award during the months of February to April, 2014. When such being the case, the reason assigned by the Plaintiff in no way comes to the Plaintiff to challenge the award. Hence, it is clear that he has not challenged the award within the stipulated time as enumerated in Section 34(3) of the Act. The Plaintiff has not assigned any sufficient cause as to why he did not challenge the award during the months of February to April, 2014. Hence, I am of the opinion that the Plaintiff has not made out any sufficient grounds to condone the delay in filing this suit. Hence, the present suit is barred by limitation, accordingly, I answer Point No.2 in the Negative.
AS.63/2014 13
14) POINT NO.3: For the foregoing discussions and answers to Point No.1 and 2, I proceed to pass the following :
ORD ER The suit filed by the Plaintiff under Section 34 of the Arbitration and Conciliation Ac, 1996 R/w Section 151 of CPC., to set aside the arbitration award dated 28.01.2014 passed in Arbitration case No.62/2011; is hereby dismissed.
(Dictated to the Judgment Writer, transcribed and computerized by her, transcript thereof corrected and then pronounced by me in open court, dated this the 12th day of December, 2018.) (RAMA NAIK) VI Addl.City Civil & Sessions Judge, Bengaluru City.
AS.63/2014 14