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Mahamaya General Finance Co. Vs. Bhagwant Singh - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit Appeal No. 157 of 1967
Judge
Reported in1973RLR681
ActsArbitration Act, 1940 - Sections 20
AppellantMahamaya General Finance Co.
RespondentBhagwant Singh
Advocates: H.S. Dhir and; S.K. Jain, Advs
Excerpt:
.....as per the purchase agreement under section 20 of the arbitration act, 1940 - the clause in the arbitration agreement entitled the petitioner to the exclusion of respondent to make the reference - it was further stated that even if the optional nature of the arbitration clause was invalid, it would be incapable of invalidating the arbitration clause - this would be because the part of the clause which conferred the exclusive option on the petitioner was clearly severable and could not be invoked by the petitioner- also, the petitioner had expressed its willingness to refer the matter for the arbitration to the arbitrator appointed by the court - it was found that since the parties were not ready to appoint the arbitrator, the arbitrator court appointed the arbitrator - - (7) it may..........had given a vehicle to the respondents through a hire purchase agreement. it contained an arbitration clause which was that one s ram singh, advocate could be asked to arbitrate at petitioner's direction. disputes arose between the parties and an application was made u/s 20 of arbitration act the validity of the agreement was opposed on numerous grounds after narrating facts the judgment proceeds :- (2) the first question that needs to be determined is whether there is a valid and subsisting agreement of arbitration providing for reference of disputes to the sole arbitration of s. ram singh ghoba, arbitrator. (3) ex. p1 is the printed hire purchase agreement which was admittedly executed by the respondents and contains, amongst others, clause 26 which provides that all questions.....
Judgment:

H.L. Anand, J.

(1) The petitioners had given a vehicle to the respondents through a Hire Purchase agreement. It contained an arbitration clause which was that one S Ram Singh, Advocate could be asked to arbitrate at petitioner's direction. Disputes arose between the parties and an application was made U/S 20 of Arbitration Act The validity of the agreement was opposed on numerous grounds After narrating facts the judgment proceeds :-

(2) The first question that needs to be determined is whether there is a valid and subsisting agreement of arbitration providing for reference of disputes to the sole arbitration of S. Ram Singh Ghoba, Arbitrator.

(3) EX. P1 is the printed hire purchase agreement which was admittedly executed by the respondents and contains, amongst others, clause 26 which provides that all questions and matters of difference between the parties shall be determined at the owners' discretion and 'not otherwise' by arbitration to the sole arbitration of S. Raim Singh Gheba, Advocate, Chandni Chowk, Delhi.

(4) The validity of the arbitration agreement was however, assailed on behalf of the respondents in the first instance, on the ground that when the respondents executed the agreement Ex. P1 containing the arbitration clause, the name of the Arbitrator had not been filled in but in the space having been left blank must have been filled in later and secondly, on the ground that the arbitration clause being optional in nature, entitled the petitioner alone to the exclusion of the respondents, to make a reference to the arbitration of the arbitrator thereforee, being one sided, was unreasonable, unconscionable and invalid.

(5) In support of the aforesaid contention learned counsel for the respondents placed reliance on a few decisions of the various High Courts touching tile question as to the validity of an optional arbitration clause but it is unnecessary to refer to those decisions because learned counsel for the petitioner contended that the optional nature of the arbitration clause was of no consequence because option was never exercised by the petitioner and the petitioner had instead invoked the provisions of Section 20 of the Act. Learned counsel for the petitioner also contended that the name of the Arbitrator was there when the respondents executed it and it has been established by evidence that the various blanks were filled at the time the respondents executed the agreement but conceded that the petitioner would have no objection in any event to any other competent person being appointed as an Arbitrator.

(6) It was not disputed before roe that serious disputes had arisen between the parties with regard to the liability of the respondents to the petitioner both as to the amount claimed and matters connected therewith which need to be determined. It is also not disputed that whether or not, the name of Arbitrator was mentioned in the agreement Ex.P1 or the place was left blank, the parties did intend that all disputes that may arise between them under the agreement would be decided by arbitration. The optional nature of the arbitration clause as also the fact whether or not, the name of Arbitrator was mentioned in it or not is of no consequence in view of the fact that the petitioner did not invoke the option and did not resort to a unilateral reference but has instead invoked the provisions of Section 20 of the Act and so far as the Arbitrator is concerned, the petitioner has expressed its willingness to have the matter referred to the arbitration of any person who may be appointed by the Court for the purpose.

(7) It may be pointed out that even if the optional nature of the arbitration clause is invalid, it would in any event be incapable of invalidating the arbitration clause because the part of the clause which confers an exclusive option on the petitioner is clearly severable and and has not indeed been invoked by the Petitioner.

(8) No other question was raised at hearing. It appears that the question regarding the validity of the application and the propriety of its signing and verification, which was raised in the reply was not pressed when the issues were framed and no issue on the question was claimed. The question was not raised even at the hearing and would be deemed to have been given up.

(9) In view of the nature of present proceedings and the order that 1 propose to make it would not be proper to discus or determine the contentions of the parties on the merits of the disputes between the parties because these could be appropriately dealt with by the Arbitrator.

(10) While the respondents have expressed their unwillingness to have the dispute adjudicated upon by the Arbitrator named in the agreement on the ground that he has been the retained lawyer of the petitioner, the petitioner has expressed its willingness to have the matter in controversy between the parties referred to the arbitration of any person who may be appointed by the Court for the purpose. The parties were also unable to agree upon an Arbitrator.

(11) In the circumstances it would be reasonable and proper to appoint an Arbitrator and to refer to him the dispute and I hereby appoint Bakshi Mehtab Singh Sawhney, Advocate, Delhi as Arbitrator to decide the various disputes that have arisen between the parties in accordance with the provisions of the Act. The Arbitrator would make its award within 4 months of entering upon the reference.


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