IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR WEDNESDAY, THE 16TH JULY 2008 / 25TH ASHADHA 1930 WP(C).No. 11634 of 2008(I) -------------------------- OS.294/2007 of ADDL.MUNSIFF, KASARAGOD .................... PETITIONER: ------------------- SAYYAD.P., S/O.ISMAIL, AGED 43 YEARS, R/AT.ASMA MANZIL, BADAJE VILLAGE AND POST, MANJESWAR, KASARAGOD. BY ADV. SRI.KODOTH SREEDHARAN RESPONDENTS: ------------------------ 1. THE MANAGER, M/S.SRIRAM TRANSPORT FINANCE CO.LTD., 160-A/31, 2ND FLOOR, LAND MARK CENTRE, OPP.NEW BUS STAND, KASARAGOD. 2. THE ADMINISTRATIVE MANAGER, M/S. SRIRAM TRANSPORT FINANCE CO.LTD., ADMINISTRATION OFFICE, CHENNAI. 3. THE BRANCH MANAGER, M/S. SRIRAM TRANSPORT FINANCE CO.LTD., MALAPPURAM. BY ADV. SRI.RAJESH NAMBIAR - R1 TO R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.11634/2008 I APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE PLAINT DTD. 21/09/2007 BEFORE THE MUNSIFF COURT, KASARAGOD BY THE PETITIONER. EXT.P2: COPY OF THE COUNTER FILED BY THE RESPONDENTS IN I.A.1575/07 BEFORE THE ADDL.MUNSIFF COURT, KASARAGOD. EXT.P3: COPY OF THE APPLICATION IN I.A.1995/08 FILED BY THE RESPONDENTS DTD. 8/11/2007. EXT.P4: COPY OF THE COUNTER FILED BY THE PETITIONER IN I.A.1995/07 DTD. 3/12/2007. EXT.P5: COPY OF THE APPLICATION IN I.A.2115/07 DTD. 3/12/2007 FILED BY THE PETITIONER BEFORE THE COURT OF ADDL.MUNSIFF OF KASARAGOD. EXT.P6: COPY OF THE COUNTER DTD. 3/12/2007 BY THE RESPONDENTS BEFORE THE COURT OF ADDL.MUNSIFF OF KASARAGOD. EXT.P7: COPY OF THE MEMO DTD. 7/01/2008 FILED BY THE 3RD RESPONDENT BEFORE THE COURT OF ADDL.MUNSIFF OF KASARAGOD. EXT.P8: COPY OF THE ORDER IN I.A.1995/2007 DTD. 28/02/2008 BY THE COURT OF ADDL.MUNSIFF OF KASARAGOD. EXT.P9: COPY OF THE ORDER IN W.P.9831/2008 DTD. 27/03/2008 BY THIS HON'BLE COURT. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.S.TO JUDGE Kss M.SASIDHARAN NAMBIAR,J. =========================== W.P.(C) NO.11634 2008 =========================== Dated this the 16th day of July, 2008 JUDGMENT The factual matrix of the case shows that O.S.294/2007 was instituted by petitioner before Additional Munsiff Court, Kasaragod for a permanent prohibitory injunction restraining respondents from seizing vehicle KL/10F/8668 and also to direct third defendant to produce documents relating to the loan account in respect of the said vehicle. To the petition filed for an order of temporary injunction, respondents filed a counter and also produced the original hire purchase agreement and filed I.A.1995/2007, under section 8(1) of the Act, to refer the parties to an arbitration contending that the agreement which contains an arbitration clause whereunder all disputes are to be referred to the sole arbitrator mentioned therein. Petitioner filed Ext.P4 counter to said petition. Petitioner also filed Ext.P5 application for a W.P.(C)11634/2008 2 direction to the third respondent to file the original agreement between the parties as provided under Rule 12 of Order X1 of Code of Civil Procedure. Ext.P7 agreement was then produced as prayed for in Ext.P5 application. It is the original agreement executed by the parties at Manjeri. Case of the respondents is that as petitioner is at Kasaragod and the vehicle is to be plied at Kasaragod, Ext.P2 agreement was subsequently executed. Both Ext.P2 and P7 contain arbitration clause. Under Ext.P8 order, learned Munsiff allowed the application and referred the parties to arbitration. This petition is filed under Article 227 of the Constitution of India challenging Ext.P8 order. 2. The argument of the learned counsel appearing for petitioner is that though petitioner admitted that the vehicle KL/10F/8668 was purchased by him under a hire purchase agreement executed in favour of respondents, that agreement does not contain an arbitration clause and the agreement W.P.(C)11634/2008 3 relied upon by the trial court in Ext.P8 order is not the agreement executed by the petitioner and therefore learned Munsiff was not justified in referring the parties to arbitration. Learned counsel argued that when in Ext.P4 it was specifically contended that the agreement produced was fraudulently created for the purpose of the suit and he did not execute the agreement, learned Munsiff should not have referred the parties to arbitration. 3. Learned counsel appearing for respondents pointed out that in the plaint itself existence of an agreement with the respondents is admitted and after production of Ext.P2 agreement, petitioner filed an application to produce the original agreement without furnishing any details and respondents were thus compelled to produce Ext.P7 which was the first agreement executed at Manjeri and there is no case for the petitioner by filing any affidavit or statement that Ext.P7 is not an agreement executed by petitioner and in such W.P.(C)11634/2008 4 circumstance learned Munsiff was justified in finding that Ext.P2 is the agreement executed by petitioner and as it contains an arbitration clause learned Munsiff was justified in passing Ext.P8 order. 4. Ext.P7 agreement shows that under clause 35 all disputes, differences and/or claims, arising out of the agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Clause X11 of Ext.P2 agreement also provides for an arbitration to the effect that all disputes, differences and/or claims arising out of the hire purchase agreement, whether during its subsistence or thereafter, shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act,1996. The question is whether Ext.P2 agreement which is the last agreement, is the one executed by the petitioner. If it is executed by the petitioner, then by virtue of clause X11 all W.P.(C)11634/2008 5 disputes including the dispute involved in the suit is to be referred to arbitration. 5. Learned Munsiff upheld the agreement under Ext.P8 order stating that petitioner admitted that he purchased the stage carriage bus on 24.1.2002 by availing financial assistance from respondent company and petitioner admitted that it has been endorsed the registration certificate and the endorsement of the registration certificate shows that there is a hire purchase agreement between petitioner and respondents with regard to vehicle KL 10 F 8668 and hence contention of respondents that there is no hire purchase agreement with the petitioner is not correct. Based on this finding and acting upon clause X11 of Ext.P2, parties were referred to arbitration. The argument of the learned counsel is that though respondents relied on the agreement, in Ext.P4 counter petitioner specifically pleaded that he did not execute the agreement produced and though petitioner filed an application to produce the original agreement W.P.(C)11634/2008 6 executed, the agreement produced is not the one executed and there is no finding that the document so produced is the one executed by petitioner and therefore in the absence of a finding that petitioner executed Ext.P2 agreement, learned Munsiff was not justified in referring the parties to arbitration. Learned counsel appearing for respondents argued that in the plaint itself existence of a hire purchase agreement is admitted and even when respondents produced Ext.P2, petitioner filed an application to produce the original agreement and as prior to Ext.P2 agreement,an agreement was first executed at Manjeri, respondents produced Ext.P7 agreement and petitioner did not file any further affidavit or statement that he did not execute that agreement and when Ext.P7 also contains an arbitration clause similar to the one in Ext.P2 agreement, learned Munsiff was justified in referring the parties to arbitration. 6. Though there is no specific finding that W.P.(C)11634/2008 7 petitioner executed Ext.P2 agreement in Ext.P8 order, a reading of the order and the contentions of the petitioner and the documents produced before the court establish that petitioner is admitting existence of a hire purchase agreement. Eventhough petitioner in Ext.P4 counter contended that he did not execute Ext.P2 and filed Ext.P5 petition directing respondents to produce the original agreement, when they produced Ext.P7 no further petition or affidavit was filed disputing the genuineness of Ext.P7. In the nature and contentions and circumstances of the case,learned Munsiff was justified in relying on Ext.P2 agreement as the agreement admitted in the plaint. If that be so, when Ext.P2 provides for arbitration under clause X11, learned Munsiff was justified in referring the parties to arbitration under Ext.P8 order. Petitioner is entitled to dispute the existence of a valid agreement before the arbitrator as the arbitrator is competent to decide the validity of the arbitration agreement W.P.(C)11634/2008 8 under section 16(1) of the Act. Writ Petition is dismissed. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- W.P.(C).NO. /06 --------------------- JUDGMENT SEPTEMBER,2006