In spite of sufficient service no one has appeared for the contesting respondents No.2 to 4.
Heard learned counsel for the petitioner.
This writ petition is directed against order dated 09.01.2006 passed by District Judge, Badaun in Execution Case No.45 of 2005, M/s Nand Auto Hire Purchase Limited Vs. Haider Ali and others.
Arbitrator had given an award on 04.06.2005 (Annexure-I) in favour of the petitioner lender against the respondents borrowers and guarantors. For execution of the said award, Execution Case No.45 of 2005 was initiated under Section 36 of Arbitration and Conciliation Act, 1996 by the petitioner and a prayer was made for issuance of transfer certificate to the District Judge, Sultanpur. Under Section 36 of the Act it is provided that the arbitral award shall be enforced under the C.P.C. in the same manner as if it were a decree of the Court. Through impugned order dated 09.01.2006, the District Judge opined that the award was void and illegal hence execution application was rejected. The learned District Judge has held that the liability to repay the loan, which had been advanced by the applicant petitioner to the respondent No.2, opposite party No.1 was not disputed by him hence there was no dispute and matter could not be referred for arbitration as under the agreement it was provided that all disputes, differences and/ or claims out the hire-purchase agreement should be settled by arbitration. The learned District Judge held that mere non-payment does not mean that there is any dispute hence reference was wrongly made and the Arbitrator had no authority to entertain the application of the creditor and pass the award. It is mentioned in the award that in spite of notice dated 18.11.2003 sent by petitioner to contesting respondents to repay the remaining loan with interest (total about Rs.60,000/-) no payment had been made by them. Mere non-payment of the amount may not be a dispute amenable to arbitration, however failure to pay in spite of demand and notice is very well a dispute vide Basti Sugar Mills Co. Ltd. Walterganj Vs. M/s Bharat Motor Sores, Golghar, 1983 ALJ 932 and M/s Jhabbu Mal Jang Bahadur Vs. Nanak Chand Aggarwal and another, AIR 1982 Delhi 55. In this regard reference may also be made to para 8 of S.N. Prasad v. Monnet Finance Ltd. and Ors., AIR 2011 SC 442 wherein it has been mentioned that in loan agreements there can very well be provision for arbitration.
The second reasoning given in the impugned order is that the purpose of approaching the arbitrator was to avoid payment of court fees, which would have been payable on the plaint of the suit for recovery of the amount while the award required stamp of lesser amount. This reasoning is quite strange. The learned District Judge has virtually declared the entire Arbitration Act to be void and designed for avoiding payment for court fees.
Accordingly, impugned order being utterly illegal and without jurisdiction is set aside, matter is remanded to the District Judge, Badaun to consider the prayer of the petitioner for transfer of the decree for execution to District Judge, Sultanpur. If the decree is transferred, it must specifically be mentioned in the Transfer certificate/ order that District Judge, Sultanpur shall issue notice to judgment debtor before proceeding further with the execution of the award.
Writ Petition is allowed.
Order Date :- 5.11.2012 NLY