MITHAILAL GUPTA Vs. INLAND AUTO FINANCE
LAWS(MPH)-1967-8-5
HIGH COURT OF MADHYA PRADESH
Decided on August 10,1967

MITHAILAL GUPTA Appellant
VERSUS
INLAND AUTO FINANCE Respondents

JUDGEMENT

- (1.) THIS is an appeal from an order of stay passed under Section 34 of the arbitration Act.
(2.) THE appellant's suit, which has been stayed, is based on certain hire purchase agreements in respect of a motor truck bearing registration No MPA 1727. Then there are certain averments in the plaint with regard to motor vehicle No. MPA 2322 and yet another vehicle No. MPA 2979. For the purposes of this appeal, it is not necessary to state the details of those plaint averments. An agreement on a printed form was entered into between the plaintiff as the hirer, the first defendant as the owner and the second defendant as the guarantor. According to the plaintiff, he signed the agreement on a blank form. Under the said agreement, the first defendant acted as financier to enable the plaintiff to purchase a new Layland motor truck. It advanced Rs. 30,000 to him, to which a sum of Rs. 9,000 was added as finance charges, being interest at the rate of 15 per cent per annum for two years on the whole sum of Rs. 30,000, total amount being Rs. 39,000. It was payable in 24 monthly instalments of Rs. 1624 each commencing on 24 January 1960. The plaintiff paid to the first defendant not only the entire amount of the 24 instalments, payable under the aforesaid agreement, but also Rs. 119. 38 p. in excess. The suit is one for accounts in respect of the hire purchase agreement relating to motor truck No. 1727 and for a declaration that the plaintiff is entitled to exercise the option of purchase given to him under the agreements and could have cancelled the endorsement of hire purchase in favour of defendant 1 on the registration certificate of that vehicle. Hire purchase agreement in respect of motor truck No. MPA 1727 contained the following arbitration clause:-" iii. All questions and matters in difference between the parties hereto or their representative touching the construction hereof or any act or thing in regard to the rights, duties and obligations or the enforcement or their performance including the failure to pay a claim under the several hereinbefore recited clauses and/or arising out of or relating to this Agreement or to the subject matter thereof shall in accordance with the Indian Arbitration Act X of 1940, or any statutory modification thereof be referred to the sole arbitration of 'shri R. L. Mehta, Advocate, 320 Kucha Ghasi Ram, Delhi,' or in the event of his refusal or inability to act as Arbitrator, to the arbitration of 'shri K. K. Jain, Advocate daryaganj, Delhi,' or his nominee at the option of the party raising the question or matter in difference. The said party shall give ten day's notice thereof to the other party. . . . . . The party raising the question or matter shall deposit Rs. 100 as arbitration fee with the Arbitrator. . " the words and figures underlined (here into ' ') above are written in green ink in the printed form.
(3.) THE first defendant, by its application dated 30 January 1965, claimed stay of the suit under Section 34 of the Arbitration Act. It alleged that on 16 October 1964 and 9 November 1964, it gave two notices to the plaintiff specifying 20 November 1964 as the last date for the plaintiff to reply, but the plaintiff did not reply or comply with the notices. Thereupon, the first defendant made a reference to the arbitrator on 25 November 1964 to settle the matter between the plaintiff and defendant 1. The Arbitrator issued notice to the plaintiff on 11 December 1964 and fixed 28 December 1964 for hearing. The plaintiff avoided service and, having got scent of the matter, instituted the present suit on 23 December 1964. The arbitrator then fixed 20 January 1965 and thereafter 10 February 1965 for hearing. The plaintiff opposed this application as false and frivolous. He denied the existence, genuineness and validity of the alleged arbitration agreement and stated: -'' (3) That the signature of the plaintiff-applicant and the defendant pro forma opposite party No. 2 were obtained on blank printed forms of agreement and blank sheets of papers in the circumstances already stated in the plaint, and the agreement in question must have been forged by the defendant opposite party No. 1 by making unlawful use of the blank forms of agreements and blank sheets of papers. (4) That the plaintiff applicant never agreed to the nomination of Shri R. L. Mehta and/or Shri K. K. Jain as arbitrators, and was never told anything of the kind as alleged to have been told to him in the quotation from the alleged arbitration clause. (5) That the plaintiff never agreed that Delhi Courts alone shall have jurisdiction in all matters arising out of relating to or in connection with the alleged agreement. . . . . . . " we need not mention the question of law raised in the alternative therein. Mithailal plaintiff filed his affidavit in support of the application.;


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