Delhi High Court P. Dhandapani And Anr. vs The Motor And General Finance Ltd. on 21 March, 2006 Equivalent citations: 2006(2)ARBLR274(DELHI) JUDGMENT Sanjay Kishan Kaul, J. 1. The petitioner entered into a hire purchase agreement with the respondent in respect of compactorcumdryer machines on 28.06.96. The said hire purchase agreement is not available on record but a payment schedule dated 01.03.1996 has been placed on record which shows that the price of the equipment was 10,40,000/ and it was financed to the extent of Rs 9,26,000/ in 36 Installments of Rs 26,000. The agreement between the parties contained an arbitration clause and since the petitioner, after availing of the said loan facility against hire purchase of the machinery, failed to pay the Installments, the dispute was referred to the sole arbitration of Mr. Inderjit Gulati. The arbitrator made and published his award on 01.04.2001 and the petitioner aggrieved by the same has filed the present objections under section 34 of the Arbitration and conciliation Act, 1996 (hereinafter referred to as the 'said Act'). 2. It may be noticed that the petitioner refused to participate in the arbitration proceedings. It is stated that some communications were addressed to the arbitrator objecting to the jurisdiction but the petitioner did not take any steps to file any reply or invite any order from the arbitrator on his jurisdiction. 3. Learned counsel for the petitioner does not dispute that the objections must fall within the parameters of Section 34(2) of the said Act as enunciated by the Supreme Court in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. in order to enable the petitioner to succeed in the present proceedings. In view of the said parameters, learned counsel for the petitioner has set forth the following submissions: i) The claim of the respondent is barred by time. ii) The respondent submitted to the jurisdiction of the Civil Court in Tirupur by filing a written statement in a Civil Suit filed by the petitioner and thus had given up the recourse to arbitration proceedings. The respondent had further not filed any comprehensive counter claim in response to the suit of the petitioner or an application under section 8 of the said Act. iii) The award suffers from the vice of absence of reasons. iv) The respondent repossessed the machinery and the mitigation of losses, if any, of the respondent have not been taken into consideration by the arbitrator. 4. I consider it appropriate to deal each of these submissions in the sequence in which they have been made. 5. The plea of limitation arises from the payment schedule prescribed and the manner of default. 6. The payment schedule stipulated that the first Installment would be paid as per due date of 01.04.96. Learned counsel for the petitioner contends that the first five Installments were paid and the first default happened in respect of Installment due on 01.09.1996. Learned counsel drew the attention of this court to the terms and conditions agreed to between the parties. Interestingly, the agreement has not been filed but in this behalf a reference has been made to the statement of claim filed by the respondent before the arbitrator where the relevant conditions have been reproduced. The conditions referred in this behalf are conditions No. 8 & 9 which are as under: Condition No. 8 The owners may, with or without notice to the hirer terminate the contract of hiring and forthwith retake the possession of the said machinery. If any monthly hire or part thereof or any other amount due against the hirer for incidental expenses is in arrears and left unpaid for a period of seven days after the date fixed for its payments for any reason whatsoever and particularly notwithstanding any claim which the hirer may have in respect of the policy of insurance hereinafter mentioned. b) If the Hirer commits or suffers any breach of the conditions/obligations therein stipulated, to be observed and performed by him or does anything or suffers any act to be done which in the opinion of the owners may prejudice their title to the said machiner. Condition No. 9 Any such termination shall be without prejudice to any claim the owners may have in respect of any terms and conditions of this agreement and it is further agreed that if the hiring is terminated by the owners or by the hirer in the manner herein provided all hire including proportionate hire for part month up to the date of such termination and damage for breach of this agreement shall be paid by the hirers to owers and no payment, credit or allowance in respect of the payment previously made shall be made or allowed to the hirer. 7. Learned counsel for the petitioner contends that in case of any default for a particular month, and the amount remaining unpaid for a period of seven days thereafter, the respondent had a right to terminate the con