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K. Badurinnisa & Another v/s M/s. Lakshmi General Finance Ltd. & Others

    O.P. No. 628 of 2006

    Decided On, 18 July 2018

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE ABDUL QUDDHOSE

    For the Petitioners: Ethiraj, Advocate. For the Respondents: R1, Aniruth Krishnan for M/s. Sarvabhauman Associates, Advocates.



Judgment Text

(Prayer: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the award.)

1. The instant petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the Award dated 30.09.2002 passed by the Arbitrator against the petitioners.

2. The brief facts leading to the filing of the instant petition are as follows: The first petitioner availed hire purchase facility from the first respondent and taken a vehicle on hire purchase by executing a hire purchase agreement dated 07.10.1996 in favour of the first r

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espondent. The second respondent stood as guarantor for the due repayment of the amount by the first petitioner. 3. According to the first respondent, the first petitioner committed default in the repayment under the hire purchase agreement. In view of the dispute between the parties, the first respondent referred the dispute to the Arbitration in accordance with the arbitration clause contained in the agreement by appointing the second respondent as the sole Arbitrator to decide the dispute on merits, between the parties. The second respondent/sole arbitrator acted upon the reference and after issuing notice to the parties to the dispute and after considering the materials available on record and after hearing the submissions of the respective parties, passed an Award dated 30.09.2002 directing the petitioners jointly and severally to pay the first respondent a sum of Rs.295650/- together with interest and costs.

3. Aggrieved by the Award dated 30.09.2002, the instant petition has been filed under Section 34 of the Arbitration and Conciliation Act.

4. The learned counsel for the petitioners submits that the primary ground raised in the instant petition for challenge is that the Arbitrator did not consider the counter claim of the first petitioner. The learned counsel for the petitioners drew the attention of this Court to the counter statement filed by the first petitioner before the Arbitrator to the claim made by the first respondent. He referred to paragraph 7 of the Counter statement and submitted that as seen from the calculation a sum of Rs.48,182/- is the excess amount available with the first respondent, which they failed to refund and that, no money is due and payable by the petitioners to the first respondent. According the learned counsel, this fact was never considered by the Arbitrator in his findings.

5. Per contra, the learned counsel for the first respondent, by referring to the Arbitral Award which is under challenge, submitted that the Arbitrator has given a finding on the counter claim made by the petitioners in paragraph 16 of the impugned award which reads as follows:

' 16. First respondent further claims that she paid Rs.3,88,970/- and this was not properly given credit to. As per her accounts she is entitled to claim Rs.48,182/- from the claimant. First respondent has not gone into the box to prove the same. R.W1 her husband examined himself as R.W1. He produces Ex.R1 to R4 the receipts regarding the payments made by him. He is not able to give any reason why no reply notice was given by him to the claimant for the several notices issued by them. Ex.R1 to R4 were produced by R.W1 only he was examined. Hence the claimant thereafter examined P.W2 Manager (Accounts) of the claimant's company to explain these receipts. He has produced Ex.A19 the earlier accounts of R.W1. According to him Ex.R4 series are properly given credit to in the accounts as well as Ex.R1. At the time of finance of hire purchase the invoice amount was Rs.5,18,496/-. The claimant finance Rs.5,00,000/- . As per Ex.R2 and Ex.R3 first respondent directly paid to the dealer Rs.8,520/-. Noting is seriously elicited in his cross examination to show that Ex.R1 to R4 series are not properly given credit to in Ex.A18 and A 19. Hence I find no force in the contention of first respondent that the amounts given by her was not properly given credit to.'

6. This Court after considering the materials available on record and after examining the Arbitral Award dated 30.09.2002 is of the considered view that the Arbitrator has duly considered the counter claim made by the petitioners before the Arbitrator and has rightly rejected the counter claim, since the petitioners failed to prove the same by oral or documentary evidence. The Arbitrator has given a categorical finding that the petitioners were unable to establish that a sum of Rs.48,182/- is the excess amount lying with the first respondent.

7. Further the Arbitrator has also observed that the first petitioner has not gone into the box to establish her counter claim. The learned Arbitrator has also observed that the receipts relied upon by the petitioners Ex.R1 to Ex.R4 are duly reflected in the statement of account namely Ex.A19 filed by the first respondent. Therefore, the Arbitrator has observed that the first respondent has given due credit for all the payments made by the petitioners, as seen from the statement of account. Only thereafter, the Arbitrator has rejected the counter claim made by the petitioners.

8. This Court is satisfied with the reasons given by the Arbitrator for awarding the claim in favour of the first respondent and for rejection of the counter claim made by the petitioners. Unless and until the findings of the Arbitrator are perverse, this Court cannot interfere under Section 34 of the Arbitration and Conciliation Act, 1996. There is no illegality in the Award passed by the Arbitrator. 9. However, the interest awarded by the Arbitrator is 18% per annum from 08.03.2000 till the date of realisation. Considering the long passage of time, this Court feels that the interest will have to be reduced and is of the view that 8% per annum will be a reasonable interest.

10. Accordingly, except for modification of the interest from 18 % to 8% per annum, the Award passed by the Arbitrator in all other respects is not disturbed. Accordingly, the Arbitral Award dated 30.09.2002 is modified and the Original Petition is disposed of. However, there shall be no order as to costs.
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