Gauhati High Court
M/S Maa Sarada & Co vs Sahidul Hoque on 9 October, 2015
Author: Rumi Kumari Phukan
Bench: Rumi Kumari Phukan
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM &
ARUNACHAL PRADESH)
CIVIL REVISION PETITION NO.417 OF 2015
M/s Maa Sarada & Co., a partnership concern
having its principal office at Durga Das Road,
Ward No.5, Dhubri Town, P.O., P.S. & Dist.
Dhubri, Assam and is duly represented by its
power of attorney holder, Shri Dulal Krishna
Saha.
...... Petitioner
-Versus-
Sahidul Hoque, son of Tozammel Hoque,
resident of Molatikhamar, P.O. & P.S. Gauripur,
in the district of Dhubri, Assam.
..... Respondents
PRESENT THE HON'BLE MRS. JUSTICE RUMI KUMARI PHUKAN For the appellants : Mr. G.N. Sahewalla, Sr. Advocate Ms. B. Sarma, Advocate For the respondent : Ms. P. Bhattacharya Mr. M. Islam, Advocates Date of hearing : 06.10.2015 Date of judgment and & order : 09.10.2015 2 JUDGMENT & ORDER (CAV) Heard Mr. G.N. Sahewalla, learned senior counsel assisted by Ms. B. Sarma, learned counsel for the petitioner. Also heard Ms. P. Bhattacharya, learned counsel appearing for the respondent.
2. This petition is filed under Article 227 of the Constitution of India read with Section 151 of the Code of Civil Procedure against the impugned orders dated 22.04.2015 passed by the learned Munsiff No.1, Dhubri in Misc. (J) Case No.25/2015 in T.S. No.28/2015 and the order dated 01.09.2015 passed by the learned Civil Judge, Dhubri in Misc. Appeal No.7/2015, whereby the application of the respondent under Order 39 Rule 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 being Misc.(J)25/2015 arising out of T.S. No.28/2015 was allowed restraining the petitioner from taking possession of the vehicle in question and, on appeal being preferred by the petitioner, being Misc Appeal No.7/2015, the learned Civil Judge, Dhubri, vide order dated 01.09.2015 dismissed the appeal and upheld the order dated 22.04.2015 passed by the Learned Munsiff No.1, Dhubri.
3. The facts of the case in a nutshell is that - the petitioner M/s Maa Sarada & Co. is a registered partnership firm and deals mainly with providing financial assistance by way of providing loans which includes providing loans for the purpose of purchasing cars, for setting up business etc. The respondent herein being a customer of the petitioner firm for long had from time to time availed financial assistance from the petitioner firm. It is stated by the petitioner that in the year 2011, the respondent approached the petitioner firm for the purpose of availing loan for purchasing a truck. The petitioner without asking for a guarantor sanctioned an amount of Rs.3,23,536/- for the same which was to be repaid in 48 instalments and the CRP No.417 of 2015 Page 2 of 9 3 first instalment was of Rs.8636/- and the subsequent 47 instalments of Rs.6,700/- per month vide agreement dated 18.03.2011. It is further stated by the petitioner that the respondent although initially was duly making payment of the loan amount but after making payment of 27 instalments out of 48 instalments, stopped making payment of the balance amount. On assurance being made for payment of the instalments, the petitioner again advanced further loan of Rs.5,15,375/- and also entered into an agreement dated 03.04.2014 with the respondent along with an agreement for arbitration which was duly signed by the respondent. It has further been stated that the respondent failed to adhere to his promise and failed to repay the loan. However, subsequently, the respondent vide letter dated 20.09.2014 expressed to repay the entire outstanding amount but the same was only in respect of balance amount as per the agreement dated 18.03.2011 but not in respect of the loan taken as per agreement dated 03.04.2014.
4. To the utter surprise and dismay of the petitioner, the petitioner came to learn that the respondent have preferred a suit before the Learned Munsiff No.1, Dhubri being T.S. No.28/2015, whereby the respondent denied the existence of the second loan dated 03.04.2014 and prayed for a decree for specific performance of the contract directing the petitioner to receive the outstanding amount of Rs.1,40,700/- from the respondent under the hire purchase agreement dated 18.03.2011, for a decree directing the petitioner to issue loan clearance certificate to the respondent and a perpetual injunction restraining the defendants from taking over the possession of the said truck from the respondent. Along with the aforesaid, the respondent also filed an application under Order 39, Rule 1 and 2 read with Section 151 of the Code of Civil Procedure,1908 being T.S. No.25/2015 in T.S. No.28/2015 praying therein for an ad-interim temporary CRP No.417 of 2015 Page 3 of 9 4 injunction restraining the petitioner from taking possession of the Truck bearing No.AS-17B-3792 (Old No.NL-01D-9910). The petitioner duly appeared and filed written statement in the title suit as well as objection in the aforesaid miscellaneous application. The petitioner denying the averments/contentions/allegations brought out by the respondent has stated that since there is an arbitration clause in the aforesaid contracts, the matter should be referred to Arbitration for settlement of the dispute as the learned Court of Munsiff was not the competent Court to entertain the instant suit as per the provisions of the Arbitration and Conciliation Act, 1996. It was further contended that the respondent has filed the case by suppressing the material aspect that they have violated the terms and conditions of the hire purchase agreement and filed this suit illegally violating the Order 7, Rule 14 of the Code of Civil Procedure with a view to mislead the Court. Denial of execution of the written document (hire purchase agreement) cannot be accepted unless contrary is proved. It is only on the basis of hire purchase agreement executed on 18.3.2011, the respondent has availed the loan and purchased the vehicle on terms and conditions including the arbitration clause is entered into between the parties. The respondent has also did not deny to repay the loan on the basis of hire purchase agreement dated 18.3.2011, but has denied the execution of another hire purchase agreement dated 3.4.2014 on the basis of which the respondent has taken another loan of Rs.5,15,375/-, while in both the agreement there is an arbitration clause and, as such, filing of civil suit in the Court of Munsiff is itself violative of the terms and conditions entered into between the parties and similarly, the Court of Munsiff cannot assume jurisdiction to decide such arbitration matters.
5. The learned Court of Munsiff on consideration of all above pleadings, vide order dated 22.04.2015 in Misc. (J) Case No.25/2015 in T.S. CRP No.417 of 2015 Page 4 of 9 5 No.28/2015 was pleased to grant injunction in favour of the respondent restraining the petitioner from taking over the possession of the aforesaid vehicle. On appeal being preferred by the petitioner, being Misc Appeal No.7/2015, the learned Civil Judge, Dhubri, vide order dated 01.09.2015 dismissed the appeal and upheld the order dated 22.04.2015 passed by the Learned Munsiff No.1, Dhubri. Hence, the present Civil Revision Petition.
6. It has been argued by the learned counsel for the petitioner that the order granting injunction itself is bad in law inasmuch as the learned Court below while granting injunction has failed to appreciate various vital aspects that respondent is trying to alienate the truck by selling the same on the strength of such order. Similarly, due to the passing of the order, the petitioner has been restrained from taking possession of the vehicle in question, but learned Court did not pass any order against the respondent restraining him from alienating the vehicle in question. The consideration of the Court that respondent will be in great hardship if the vehicle is taken away by the petitioner as the vehicle is the only source of livelihood of the respondent, is not true as the respondent has clearly mentioned in his agreement that his monthly income is Rs.50,000/- per month and, as such, the income generated from the car is not the only source of livelihood. The learned Court below has also failed to consider the fact that there was an arbitration clause in both the agreement and the matter ought to have been referred to arbitration. The order of appellate court while maintaining such order that civil court has jurisdiction to try such case is again stated to be erroneous and without any legal appreciation. The learned counsel basing upon the observations so made in 2004 (1) AR B.L.R . 540 (Bombay High Court) (V.H. P atil Vs. K .M . M ardia and ors ) it has been urged that in view of the agreement between the parties including the arbitration clause/ agreement, only the principal civil court of CRP No.417 of 2015 Page 5 of 9 6 original jurisdiction can adjudicate such matters. The pleadings between the parties before the Court below are also referred to for appraisal of this Court.
7. On the other hand, the learned counsel for the respondent has opposed such argument of the learned counsel for the petitioner and has contended that while they have very much challenged the authenticity of subsequent hire purchase agreement, the legality and authenticity of the document can be determined only by the Civil Court. So filing of the case before the Civil Court is legally permissible and the order of injunction is equally justified to protect the interest of the respondent. Reliance has been placed on the decision reported in 2008(2) SCC 602 (Atul Singh and ors Vs. Sunil K um ar Singh and ors) wherein it has been held that for reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, it is absolutely essential that there should be an arbitration agreement between the parties. Party against whom an arbitration reference is sought, if found not to be a party to the arbitration agreement, cannot be referred to arbitration. Further, while arbitration agreement claims to be illegal and void by the other party, reference to the arbitration in such case held not possible. Only civil court can decide the question of validity of arbitration agreement in question.
8. I have considered the rival contentions of both the parties and the pleadings between the parties as well as the impugned orders so passed by the Trial Court as well as the Appellate Court. What transpires from the record is that though the respondent has agreed about taking of loan by executing a hire purchase agreement, but they have not divulged anything thing about the terms and conditions of the agreement as well as about the arbitration clause in the agreement. Their submission that they do not know CRP No.417 of 2015 Page 6 of 9 7 where they have signed at the time of taking loan perhaps cannot be accepted. They have also not challenged the signature in the hire purchase agreement so brought on record dated 18.3.2011 which bears a clause being Clause-2 that in case of any dispute on the subject matter, the same shall be referred to the sole arbitrator and any one of the advocate of Dhubri Bar and as per Clause-9, in case the arbitration proceedings become infructuous the Court at Dhubri alone and no other Court shall have jurisdiction to determine any suit or proceeding in respect of any claim or dispute arising out of hire purchase agreement. The said agreement dated 18.3.2011 is not under challenge by the respondent, so the respondent is bound to obey the terms and conditions of the hire purchase agreement. By suppressing of such matter, the petitioner has obtained an injunction order which is bad in law in the sense that the inconvenience, loss and other factor on the part of the petitioner was not taken into account by the Courts below. Similarly, the consideration of the Courts below that respondent will be in most inconvenience position and will be deprived of his livelihood is also not proper appreciation of the principles of injunction, while the respondent has further source of income as per averments made in the agreement. On the next, the petitioner is debarred from taking possession of the truck even though the respondent is a defaulter towards payment of instalments. In-fact, the respondent could have deposited his instalments even as per his calculation of the petitioner firm subject to opposition of the subsequent agreement as has been alleged herein. In the process the petitioner is debarred from his lawful due of the instalment from the respondent. For non-consideration of such aspects, the injunction order so passed by the Trial Court and upheld by the Appellate Court is liable to be interfered with.
CRP No.417 of 2015 Page 7 of 9 89. It is also noted that both the Trial Court and the Appellate Court has not duly appreciated the provision of Section 8 of the Arbitration and Conciliation Act and assumed that the Civil Court has jurisdiction to try such case as per Section 9 of the Code of Civil Procedure. Obviously, Arbitration and Conciliation Act is a special Act to consider the aspect of conciliation regarding business transaction entered between parties including loan etc. which is unlike civil dispute. As per Section 2(1)(e), only the Court of Principal Civil Court can decide such dispute regarding arbitration which read as follows :-
"Court" m eans the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions form ing the subject m atter of the arbitration if the sam e had been the subject-m atter of a suit, but does not include any civil Court of a grade inferior to such principal Civil Court, or any Court of Sm all Causes."
Again as per Section 7, Arbitration agreement means any agreement by and between the parties to submit to arbitration all or certain dispute which have arisen or which may arise between them in respect of defined legal relationship whether contractual or not. Again as per Section 8 of the said Act, in case where there is an arbitration clause in the agreement, it is obligatory on the part of the Court to refer the parties to arbitration in terms of their arbitration agreement. There is a scope under Section 9 of the Act for a party to such agreement to pray and obtain an interim protection from the principal Civil Court as designated, even prior to or during arbitration proceeding. Obviously, the respondent has not availed the above procedure. Moreover, in view of the specific written statement/ objection given by the petitioner, the Court can decide such aspect of referring of disputed aspect of the matter (first agreement dated 18.3.2011) CRP No.417 of 2015 Page 8 of 9 9 to the arbitration and can adhere to decide the legality and validity of the second agreement dated 3.4.2014 which obviously cannot be decided by the arbitrator.
10. In view of all above discussions and findings, the impugned judgment and order dated 22.4.2015 so passed by the Munsiff No.1, Dhubri in Misc. (J) Case No.25/15 in T.S. 28/15 and the order dated 1.9.2015 passed by the learned Civil Judge, Dhubri in Misc. Appeal No.7 of 2015 is hereby quashed and set aside.
The revision petition stands disposed of accordingly.
JUDGE ISINGH CRP No.417 of 2015 Page 9 of 9