Civil Revision No.5602 of 2008 1 In the High Court of Punjab and Haryana at Chandigarh Civil Revision No.5602 of 2008 Date of decision: 13.7. 2009 Shriram Transport Finance Co.Ltd. and another ......petitioners Versus Jasbir Singh @ Jasveer Singh .......Respondent CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr.V.K.Sandhir, Advocate. for the petitioner. Mr.Raman Walia, Advocate, for the respondent. **** SABINA, J. The petitioners have filed this petition under Article 227 of the Constitution of India for quashing of order dated 11.9.2008 (Annexure P-5) passed by the Civil Judge, (Jr.Divn.) Ludhiana, vide which application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') was dismissed. The case of the plaintiff-respondent, in brief, is that Civil Revision No.5602 of 2008 2 defendant-petitioners were running the business of finance of vehicles in Ludhiana. Plaintiff wanted to purchase new truck and, hence, approached the defendants for advancement of loan. Vide agreement dated 10.2.2007, loan was advanced to the plaintiff by the defendants for purchase of truck in question. The plaintiff had repaid the entire loan amount. Thereafter, the plaintiff again approached the defendants for loan of Rs.1,30,000/- against the said truck. The defendants obtained the signatures of the plaintiff on various printed forms and blank stamps. First instalment of Rs.10,000/- was paid by the plaintiff on 29.2.2007. Up to 23.11.2007, plaintiff repaid Rs.49,000/- to the defendants against the loan amount. In the month of June, 2008, plaintiff approached the defendants and demanded statement of account but he was not supplied with the same. On 19.7.2008 the vehicle in question, which was coming from Delhi to Ludhiana loaded with scrap worth Rs.3,00,000/-, was taken by the musclemen of the defendants. The plaintiff filed a suit for mandatory injunction directing the defendants to hand over the truck bearing registration No. HR 38- C 2431 along with scrap worth Rs.3,00,000/-, which was taken away by the musclemen of the defendants illegally on 19.7.2008. Notice of the suit was issued to the defendants. An application under Section 8 read with Section 5 of the Act was filed by the defendants praying that the case be referred to the Arbitrator for arbitration. Vide the impugned order Annexure P-5, the said application was dismissed Civil Revision No.5602 of 2008 3 by the trial Court. Hence, the present revision petition. Learned counsel for the petitioners has submitted that in terms of Article 10.14 of the agreement dated 10.2.2007 (Annexure P-3), the trial Court was bound to refer the dispute arising between the parties to the Arbitrator. In support of his arguments, learned counsel has placed reliance on the decision of the Apex Court in Rashtriya Ispat Nigam Limited v. M/s Verma Transport Company (SC) 2006 (4) RCR (Civil) 478, wherein it was held as under:- “15. Section 8 confers a power on the judicial authority. He must refer the dispute which is the subject matter of an arbitration agreement if an action is pending before him, subject to the fulfillment of the conditions precedent. The said power, however, shall be exercised if a party so applies not later than when submitting his first statement on the substance of the dispute.” Learned counsel for the petitioners has next placed reliance on the decision of this Court in M/s Regent Automobiles v. Indian Oil Corporation Limited and others 2008 (3) RCR (Civil) 752, wherein it was held that if there is an agreement clause in the agreement between the parties, then it is the mandatory duty of the Court to refer the dispute arising between the contracting parties to the Arbitrator. Article 10.14 of the agreement reads as under:- “Any and all disputes, differences and / or claims arising Civil Revision No.5602 of 2008 4 out of or in connection with the Agreement or its performance shall settled by arbitration to be held in New Delhi in accordance with the provisions of the Arbitration and Conciliation Act, 1996, or any statutory amendments thereof and shall be referred to the sole arbitrator as may be appointed by the Lender. The reference to the arbitrator shall be within the clauses, terms and conditions of this agreement. The arbitrator shall be competent to decide whether any matter of dispute or difference referred to him falls within the purview of arbitrator as provided for above/ or for any matter relating to arbitration under the Arbitration and Conciliation Act, 1996. The Award given by the arbitrator shall be final and binding on all the parties concerned.” Thus, as per the arbitration clause in the agreement any and all disputes, differences or claims arising out of or in connection with the agreement or its performance shall be settled by arbitration. Hence, in view of the arbitration clause, I am of the considered view that it is mandatory duty of the Court to refer the dispute arising between the parties to the Arbitrator. Learned trial Court had erred in dismissing the application moved by the petitioners for reference of the dispute between the parties to the Arbitrator. The petitioners must be relegated to the remedy of arbitration. Civil Revision No.5602 of 2008 5 Accordingly, this petition is allowed. The impugned order dated 11.9.2008 (Annexure P-5) passed by the Civil Judge, (Jr.Divn.) Ludhiana is set aside. Consequently, the application moved by the petitioners under Section 8 read with Section 5 of the Act is allowed. The matter shall stand refer to the Arbitrator in terms of the arbitration clause. Further consequential orders in the context shall be passed by the learned trial Court. (SABINA) JUDGE July 13, 2009 anita