- (1.) The same award obtained by a finance company has been challenged in the two petitions; the first in point of time by the guarantor and the other by the hirer. Some of the grounds urged are common. The primary challenge in both petitions is that the award is in utter derogation of the principles of natural justice. The hirer adds that the award has been rendered by a machine programmed to routinely churn out mindless awards completely in favour of this and other finance companies. Under an agreement of November 14, 2000 the respondent financier made available substantial funds for the hirer acquiring a tractor with trailer manufactured by Volvo India Ltd. The agreement recorded that the acquisition cost of the asset was Rs.39,75,000/-. The tenure of the agreement was for 55 months beginning January, 2001 and ending July, 2005. The monthly payments, as would appear from the first schedule to the agreement, were to be made on staggered basis: Rs.1,20,000/- every month in the year 2001; Rs.1,16,000/- every month in the year 2002; Rs.1,10,000/- every month in the year 2003; Rs.1,06,000/- every month in the year 2004; and, Rs.1,00,000/- per month for the seven months in the year 2005. Clause 10(a) of the agreement provided that the hirer would have the asset insured at his cost for an amount equal to its full insurable value in the name of the finance company. Clause 10(b) required the hirer to hand over the policies of insurance to the finance company. The agreement regarded the finance company to be the owner of the vehicle and clause 10(j) thereof recorded that if the vehicle was destroyed or damaged to such an extent as to be in the opinion of the Owner (finance company) incapable of economic repair then at the Owners sole discretion the Insurance monies payable under the said Insurance shall, at the option of the Owner be applied so far as possible in replacing the Equipment with another Equipment of similar type quality in which event the fresh Equipment shall be deemed to have been hired by the Owner under this Agreement and the hirer shall hold the same on hire purchase subject to the terms and conditions of the agreement. Clause 11 of the agreement contemplated that the hirer would bear the entire risk of loss and damage to the vehicle for any cause whatsoever and that the obligations of the hirer under the agreement would not be affected by any loss or damage to the vehicle. Clause 18 of the agreement detailed the events of default and termination and clause 19 provided the remedies available to the financier upon any default. Clause 43 of the agreement recorded as follows: Any notice, letter or other communication sent to the Hirer or the guarantor whether by post or by messenger or by telegram at the respective last know (sic, known) addresses of the Hirer or the Guarantor shall be deemed to have been delivered and/or duly served on them or either of them as the case may be.
(2.) The arbitration clause found at article 46 of the agreement contemplated the reference to the sole arbitration of a named arbitrator (the name having been filled in hand). The arbitration clause gave the arbitrator summary powers and recorded that no objection shall be taken on the ground that the Arbitrator so appointed is an employee of the owner or is in any way associated with the owner The clause recorded an agreement between the parties that the arbitrator need not give reasons in award. The following sentence in article 46 appears to have escaped the attention of the challengers: The award shall be made in writing within four months after entering upon the reference or within such extended time as agreed upon by parties. It is the common case of the parties that the tractor-trailer met with an accident on November 18, 2000 near the Volvo workshop at Bhiwandi. The hirer says that the repair estimate for making good the tractor was assessed at over Rs.36 lakh which exceeded the price thereof of Rs.30.8 lakh. According to the parties the trailer suffered minor damage and could be used after repairs. The insurance claim for the tractor was processed. The finance company says that the trailer was repaired, subsequently sold and the sale proceeds appropriated by the finance company against its dues under the agreement.
(3.) The guarantor appears to have received subsequent notice of the arbitration proceedings. The guarantor filed a written response to the statement of claim which he described as his say. Apart from denying the contents of the statement of claim, the guarantor claimed that he had furnished a collateral security in the sum of Rs.5 lakh which was to earn interest. According to the guarantor, it was only when the guarantor sought repayment of the security together with interest thereon that the finance company refused to release the same. The guarantor, in such circumstances, instituted proceedings before the Nashik District Consumer Forum in the year 2007 which allowed the claim. The parties say that an appeal from the order of the District Forum resulted in the matter being remanded. The guarantors appeal is now pending before the National Commission. The guarantor claimed in his say that the agreement was signed at Nashik and that no copy of the executed agreement had ever been issued to him prior to the appeal being filed from the order of the District Consumer Forum. The guarantor asserted that the agreement had been entered into with one Srei International Finance Ltd and the guarantor had not been informed as to the change of name of the finance company.;