Partly allowed

Shriram Transport Finance Co. Ltd. v. Mohammed Kunhi A.K.

Kerala HC10 Feb 2017CRP/589/2015

Case brief

AI extract

What is this about?

Kerala High Court allowed a revision petition challenging the dismissal of an arbitration application. The court held that the lower court failed to examine the validity of the arbitration clause before dismissing the reference. The matter was remanded to the lower court to adjudicate the validity of the agreement.

What did the court decide?

The order of the lower court dismissing the application for reference to arbitration was set aside. The matter was remanded to the lower court to adjudicate the validity of the arbitration clause inco

Shriram Transport Finance Co. Ltd. Vs Mohammed Kunhi A.K. — Arbitration | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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FRIDAY, THE 10TH DAY OF FEBRUARY 2017/21ST MAGHA, 1938

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CRP.No. 589 of 2015 (B)

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AGAINST THE ORDER DATED 9TH SEPTEMBER 2015 IN I.A.NO.1754 OF 2014 IN O.S.NO.287 OF 2014 ON THE FILE OF THE COURT OF PRINCIPAL MUNSIFF, KASARAGOD.

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REVISION PETITIONER:DEFENDANT:

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M/S.SHRIRAM TRANSPORT FINANCE CO. LTD. 1ST FLOOR, THALANGARA GATE, OPP. IBP PETROL PUMP, NULLIPADY, KASARAGOD VILLAGE AND POST, KASARAGOD TALUK, REPRESENTED BY ITS MANAGER VINU C.

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BY ADV. SRI.RAJESH NAMBIAR

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RESPONDENT: PLAINTIFF:

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MOHAMMED KUNHI A.K., AGED 35 YEARS, S/O.SOOPI, RESIDING AT KALATHIL HOUSE, ADHUR POST AND VILLAGE, KASARAGOD TALUK AND DISTRICT, PIN - 670 082.

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BY ADV. SRI.T.K.VIPINDAS

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THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 10.02.2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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I.A.NO.2830/2015 IN C.R.P.NO.589/2015

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CLOSED

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10/02/2017

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SD/- P. SOMARAJAN, JUDGE

//TRUE COPY//

AHZ/

P. Somarajan, J.

---------------------------------------------------C.R.P. No.589 of 2015 (B)

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---------------------------------------------------Dated this the 10^th day of February, 2017

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O R D E R

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This civil revision petition is filed by the petitioner/ defendant challenging the order in I.A.No.1754 of 2014 in O.S.No.287 of 2014 on the file of the Court of the Principal Munsiff, Kasaragod.

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The said application was filed under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter for arbitration. Along with the application the original of arbitration agreement was produced wherein it was contended that the parties have agreed for an arbitration with respect to the dispute, if any, arises in between them. But, the lower court, on consideration of the pleadings and after hearing both the parties, dismissed the said application which is under challenge in this revision.

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C.R.P. No.589 of 2015 (B)

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Heard Sri.Rajesh Nambiar, the learned counsel

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appearing for the petitioner, and Sri.T.K.Vipindas, learned counsel appearing for the respondent.

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The dispute is with respect to the application of Section 8 of the Arbitration and Conciliation Act. The original arbitration agreement annexed to the application. It was submitted by the learned counsel for the petitioner that admittedly there is an arbitration clause in Ext.A1 agreement which was entered into between the plaintiff and defendant by which the defendant agreed to advance a loan to the plaintiff. Earlier, a loan facility was extended for purchasing a vehicle and later on, that facility was extended by rescheduling the loan transaction and entering into a fresh agreement. Admittedly, there is no hire purchase agreement in between the parties. The present suit was filed by the plaintiff, the borrower, to injunct the defendant from taking forcible

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C.R.P. No.589 of 2015 (B)

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possession of the vehicle. It was also contended by the plaintiff that the suit preferred by him is not under Section 9 of the Arbitration and Conciliation Act, 1996 as it is a right vested with the lender to seek protection, by way of interim measure, of the subject matter involved in the arbitration. The main challenge raised by the petitioner is that when there is an obligation under Section 8 of the Arbitration and Conciliation Act, it is mandatory on the Court to refer the parties for arbitration and took support from the decision rendered by the Apex Court in M/s.Sundaram Finance Limited and another v. T. Thankam (AIR 2015 SC 1303) . In order to bring the matter within the purview of Section 8 of the said Act, the parties seeking reference should satisfy the existence of an arbitration agreement and its validity as a condition precedent. It was submitted by the learned counsel for the plaintiff that what is produced as arbitration agreement is only a printed form agreement and the signatures were obtained only on the lower portion of each and every page of the printed form

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C.R.P. No.589 of 2015 (B)

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agreement and there is no endorsement or signature affixed in each and every clause of the printed form. It was inter alia contended by the defendant that the parties have agreed to have an arbitration process in case a dispute arises in between them. The mere fact that the agreement produced is only a printed one would not itself take away the validity of the agreement or any clause incorporated thereunder. Going by the order passed by the lower court it is very clear that the question of validity of the arbitration clause or its existence has not been considered by the lower court while rendering the order under challenge. When there is a question of validity of the arbitration clause included in the agreement, it is the bounden duty of the Court to enquire about the genuineness and validity of the same and whether it was actually intended by the parties in relation to the purpose sought to be achieved. Hence the order passed by the lower court is liable to be intercepted and I do so. The matter is remanded back to the lower court to adjudge the validity of the arbitration clause

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C.R.P. No.589 of 2015 (B)

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incorporated in Ext.A1 agreement. Then only the question of referring the parties under Section 8 of the Arbitration and Conciliation Act would arise.

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In the result, the Civil Revision Petition is allowed in part. The order of the lower court is set aside and the matter is remanded back to the lower court for fresh disposal in accordance with the law in force. No order as to costs.

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P. Somarajan Judge

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ahz/

Shriram Transport Finance Co. Ltd. v. Mohammed Kunhi A.K.

Case brief

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Shriram Transport Finance Co. Ltd. v. Mohammed Kunhi A.K.

Case brief

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