Final Order 1

Order Details: Notice of Motion
Pdf Text: 1 Ord. in NM no.411119 in Suit no.1595 of 21
MHCC010112722019
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
ORDER IN NOTICE OF MOTION NO.4111 OF 2019
CNR NO.MHCC010112722019
IN
SUIT NO.1595 OF 2021
Gulf Orient Shipping LLP ...Plaintiff
V/s
Hinduja Leyland Finance Ltd. ....Defendant.
CORAM : HIS HONOUR JUDGE
SHRI KISHORE M. JAISWAL
(COURT ROOM NO.01)
DATE : 30th DAY OF MARCH, 2022
Adv. Omkar Dalvi with Adv. Vishal Tambat for the defendant.
Adv. Piyush Pandey for the plaintiff.
ORAL ORDER
This notice of motion is taken out by the defendant for
referring the parties to arbitration Under Section 8 of the “The
Arbitration and Conciliation Act ' 1996” ( in short hereinafter referred
as 'Act ' only). This Notice of motion is supported by an arbitration
agreement. The plaintiff has strongly opposed this Notice of motion
by filing reply on affidavit. Heard learned counsels of both the sides.
2. The main suit is for injunction restraining the defendant
from taking away the possession of the commercial vehicle.
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3. At the very outset, it is pertinent to note that there is no
dispute about the fact that the loan agreement is executed between
the parties to the suit. In the said agreement there is arbitration
clause which reads as follows:
“(a) All disputes, difference and/or claim arising out of
this agreement whether during its subsistence or thereafter shall be
settled by arbitration in accordance with provision of Arbitration and
Concilition Act' 1996 or any statutory amendment thereafter and
shall be referred to sole arbitrator nominated by the Managing
Director of the lender. The Award given by such Arbitrator shall be
final and binding on the Borrower to the Agreement ”.
“(b) The venue of Arbitration shall be at Chennai.”
“(c) The Arbitrator so appointed herein above, shall be
entitled to pass an Award on the Hypothecated asset and
also any other securities by and on behalf of the
Borrower.”
4. As execution of loan agreement is not disputed and there
being arbitration clause, the defendant has submitted that there is
ouster of jurisdiction of Civil Court and dispute should be referred to
arbitrator. While arguing on these aspects the defendant has placed
reliance on following rulings:
1 “ Hindustan Petroleum Corpn. Ltd V/s M/s Pinkcity
Midway Petroleums” AIR 2003 Supreme Court 2881”
2. “Rashtriya Ispat Nigam Ltd. V/s M/s. Verma
Transport Company” Judgment in appeal (Civil) 3420 of
2006.
3. “Branch Manager, Magma leasing and finance
Limited V/s. Potluri Madhavilata & another”(2009)10
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Supreme Court Cases 103,
4. “H.H.Infrastructure Pvt. V/s Allan James
Taylor” 2020 SCC Online Bom 1746 .”
5. “ Taru Meghani V/s Shree Tirupati Greenfield
2020 SCC Online Bom 110: (2021) 1 AIR Bom R 706
6. “ Suman Baburao Thapa V/s. Jigar Mehta and
Ors.” [2018 (5) Mh.L.J. 260].
7. “ Sundaram Finance Ltd. And Another V/s T.
Thankam”(2015) 14 Supreme Court Cases 444.
5. I have carefully gone through the aforesaid rulings and
the same are applicable to the present case since in the present case
there is an arbitration clause in the agreement and it is obligatory for
this Court to refer the parties to arbitration in terms of their
arbitration agreement and nothing remains to be decided in the
original action after presentation of this notice of motion except to
refer the dispute to an arbitrator.
6. An analysis of Section 8 of the Act supported by aforesaid
rulings would show that for its applicability, the following conditions
must be satisfied:
(i) that there exist an arbitration agreement.
(ii) that the action has been brought to the Court by one party to the
arbitration agreement against the other party.
(iii) that the subject matter of the suit is same as the subject matter
of the arbitration agreement.
(iv) that the other party before he submits his first statement of the
substance of the dispute, moves the Court for referring the parties to
arbitration and
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(v) that along with the application the other party tenders that
original arbitration agreement or duly certified copy thereof.
7. In the present case all the aforesaid conditions are
satisfied. The subject matter of present suit is hypothecated
asset(Commercial vehicles) which is purchased by the plaintiff from
the loan/ finance obtained from defendant after executing loan
agreement having arbitration clause. Said clause clarifies that “ all
disputes arising therein”. Therefore certainly the subject matter of
present suit is agreed to be resolved through arbitration process
under the Act. In my considered opinion, Section 8 of the Act is in
the form of legislative command to the Court and once the
prerequisite conditions as aforesaid are satisfied, this Court has no
other option but to refer the parties to arbitration.
8. There is nothing on record that the prerequisite
conditions of Section 8 of the Act are not fully satisfied. The only
aspect which the learned Counsel for the plaintiff argued is that no
valid arbitration agreement exists. He while arguing vehemently
before me stated that the said arbitration clause has empowered only
defendant to nominate sole arbitrator. He while arguing on these
aspect placed reliance on the case,
“ Perkins Eastman Architects DPC v. HSCC (India)”
Ltd. 2019 SCC Online SC 1517 wherein it was held that, “ The
ineligibility referred to therein, was as a result of operation of law, in
that a person, having an interest in the dispute or in the outcome or
decision thereof, must not only be ineligible to act as an arbitrator but
also not be eligible to appoint anyone else as an arbitrator and that
such person cannot and should not have any role in charting out any
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course to the dispute resolution by having the power to appoint an
arbitrator”.
By placing reliance on aforesaid ruling, it was argued
that there is no valid arbitration agreement. However in the ruling of
'Hindustan Petroleum' cited supra by the defendant in which there is
reference of ruling of “Konkan railways”, it is held that if there is any
objection as to the applicability of arbitration agreement the same
will have to be raised before the concerned Arbitral Tribunal.
Therefore ruling relied on the plaintiff is not applicable to present
case. In my opinion, said issue is to be determined by the Arbitral
Tribunal as required under Section 8 and 16 of the Act. Therefore at
this stage, as there is due compliance under Section 8 of the Act, the
jurisdiction of this Court is ousted. Thus, considering the mandate of
law, I pass the following order.
ORDER
Notice of motion is allowed and made absolute in terms
of prayer clause (a) and (b).
Notice of motion is disposed of accordingly.
(Kishore M. Jaiswal)
Judge, City Civil & Sessions
Date:.30.03.2022 Court, Gr.Mumbai (C.R.No.1)
Dictated on : 30.03.2022
Transcribed on : 30..03.2022
Signed on : 30.03.2022
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL SIGNED JUDGMENT/ORDER.”
UPLOAD DATE:01.04.2022 NAME OF STENOGRAPHER(GI)
Mrs. V. V. Mhatre
TIME:
Name of the Judge (With Court room no.) HHJ Shri Kishore M. Jaiswal.
(Court Room No.1)
Date of Pronouncement of JUDGEMENT/ORDER 30.03.2022
JUDGMENT/ORDER signed by P.O. on 30.03.2022
JUDGEMENT/ORDER uploaded on 01.04.2022
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