FORD CREDIT KOTAK MAHINDRA LTD Vs. M SWAMINATHAN

JUDGEMENT

(1.) THIS revision is filed against the order of dismissal of the application under Section 8 read with Section 5 of the Arbitration and Conciliation act, 1996, filed by the petitioner herein.

(2.) THE petitioner and the respondent entered into a loan agreement no. 21602081 dated 30-09-2001 thereby the respondent availed financial assistance from the petitioner to the extent of Rs. 4,93,000/for purchase of Ford icon car. The respondent herein agreed to pay the said sum in 36 monthly installments commencing from 03-11-2001 to 03-10-2004. Clause 29 of the said agreement contemplates arbitration clause. The petitioner herein has issued loan recall notice on 12-012004 invoking clause 14 of the agreement as the respondent committed default in repaying the monthly installments and as on 2902-2004, the respondent was liable to pay a sum of Rs. 2,68,062/ -. The petitioner has also issued a telegram on 14-01-2004 to the respondent terminating the said loan agreement. The respondent has filed the suit O. S. No. 854 of 2004 before VIII Assistant City Civil court, Madras for permanent injunction restraining the petitioner from in any manner re-possessing the vehicle. In the said suit, the petitioner has filed I. A. No. 3259 of 2004 for injunction, and order of status-quo was granted on 26-02-2004.

(3.) THE petitioner herein has filed I. A. No. 3762 of 2004 in the said suit under Section 8a read with Section 5 of the Arbitration and Conciliation act, 1996. The said application was dismissed on the ground that clause 29 of the agreement contemplates that disputes and differences to be settled by the Arbitrators nominated by the petitioner and the proceedings to be held at Mumbai; whereas clause 30 of the agreement confers jurisdiction of the Courts at Chennai; that the loan agreement was terminated, hence the arbitration clause contain in the arbitration no longer exists and the Civil Court is vested with the jurisdiction to entertain the suit and that the respondent has paid 26 installments, only 10 installments remains to be paid.