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The petitioner which is a non banking financial institution, instituted arbitration proceedings against the respondents as the respondents owed a sum of Rs.1,95,000/- to the petitioner under Ext.P1 hypothication agreement in respect of a vehicle. The arbitration proceedings culminated in Ext.P2 award in favour of the petitioner who filed Ext.P3 execution petition before the District Court, Kottayam. The court below dismissed the application vide Ext.P5 order holding that Ext.P2 award is void ab-initio. Ext.P5 order is under challenge.

2. I have heard learned counsel for the petitioner and the learned counsel for the respondents.

3. The main challenge in this writ petition is that the finding of the court below that Ext.P2 is void ab-initio, is without jurisdiction as it is against the well settled principle that the Execution Court cannot go beyond the decree.

4. Admittedly, the first respondent entered into Ext.P1 hypothication agreement with the petitioner for availing a loan of Rs.1,50,000/- for purchasing a vehicle. As the respondents committed financial indiscipline, invoking Clause 18(A)(ii)(a) & (c) of Ext.P1, the vehicle was repossessed, and sold and the sale proceeds were credited to the loan account.

(i) No notice had been received from the Arbitrator and hence award is not enforceable.
(ii) The vehicle in question was seized and sold and hence the claim of the company is unsustainable and the E.P is not maintainable.
(iii) The cheque case filed against the respondent by the company ended in an acquittal and hence for the same reason, no E.P. can be filed.

7. The court below proceeded to pass an impugned order rejecting Ext.P3 execution petition finding that Ext.P2 award is void ab-initio. The court below placing reliance on a document, which was produced as Ext.B1 before it (it was an extract of registration particulars with respect to the vehicle involved) found that the hypothication agreement has been terminated on 10/10/2005. The court below was of the view that as the hypothication agreement stood terminated on 10/10/2005, there was no arbitration agreement for going into arbitration and thus, the whole arbitration conducted subsequently were void ab-initio. The arbitration reference was entered into only in 2006 and by that time the agreement stood terminated ; it was so found by the court below.

8. The argument advanced by the learned counsel for the petitioner is that the repossession of the vehicle by itself will not absolve the respondents from the liability of paying the balance as repossession is one of the mode of securing the hypothetic. I was taken to Clause 19 of Ext.P1 by the learned counsel for the petitioner, which reads a follows:

"The net proceeds of sale, realisation, recovery, and/or insurance claim proceeds relating to the Hypothicated Vehicle herein, on receipt by 'MLFL' shall be applied at its absolute discretion in the manner it thinks fit. The Borrower shall continue to be liable, for any deficiency in the amount due to 'MLFL' by the Borrower after adjustment of the net proceeds of sale, realisation, recovery and/or insurance claim as above."