Moideenkoya and Sainul Abid v Shriram Transport Finance Corporation Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** ## **&** **THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN WEDNESDAY, THE 6[TH] DAY OF JULY 2022 / 15TH ASHADHA, 1944 ARB.A NO. 74 OF 2017** **AGAINST THE ORDER IN OPARB 79/2016 OF ADDITIONAL DISTRICT COURT - IV, KOZHIKODE,KOZHIKODE** ## **APPELLANTS:** 1 MOIDEENKOYA AGED 55 YEARS S/O ATHRUMANKUTTY HAJI,PULIYULLATHIL HOUSE, P.O.THURUTHIYAD, BALUSSERY, KOZHIKODE-673 615 2 SAINUL ABID AGED 37 YEARS S/O KHADER HAJI,KEEZHAMBATH HOUSE P.O.THURUTHIYAD,BALUSSERY, KOZHIKODE- 673 615 BY ADV SRI.K.MUHAMMED SALAHUDHEEN ## **RESPONDENT:** SHRIRAM TRANSPORT FINANCE CORPORATION LTD. SREEPADAM BUILDING, CHEROOTTY ROAD, REP. BY ITS POWER OF ATTORNEY RANJITH G. BY ADVS. SRI.C.HARIKUMAR SRI.RENJITH RAJAPPAN SRI.P.S.SIDHARTHAN THIS ARBITRATION APPEAL HAVING COME UP FOR ADMISSION ON 06.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 1 ## **ALEXANDER THOMAS & MURALI PURUSHOTHAMAN,JJ.** ## **============================================== Arbitration Appeal No.74 of 2017** [ _arising out of the impugned order dated 31.01.2017 in OP (Arb.) No.79/2016 of the Addl. District Judge-IV, Kozhikode]_ **==============================================** Dated this the 06[th] day of July, 2022 ## **JUDGMENT** ## **ALEXANDER THOMAS, J.** The afore captioned appeal is filed under Sec.37(1)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “The Act”) to impugn the final order dated 31.01.2017 rendered by the Additional District Court-IV, Kozhikode dismissing O.P(Arb.)No.79/2016 which is a petition filed by the appellants herein/respondents before the Arbitrator under section 34 of the Act to set aside the award. 2. The appellants herein are the respondents in the arbitration claim instituted by the respondent herein before the sole Arbitrator in AOP No.13/2013 in which the award was rendered against the appellants herein. Being aggrieved by the said award of the Arbitrator, the appellants herein had preferred a petition under Sec. 34 of the Act to set aside the award before the District Court, and the District Court has dismissed the said petition viz., OP(Arb.) No.79/2016. Now being aggrieved by the order dated 31.01.2017 rendered by the District Court concerned dismissing Arb.Appeal No.74 of 2017 2 OP(Arb.) No.79/2016 (which is a petition filed under Sec.34 to set aside the award), the appellants have preferred the instant Arbitration Appeal under Sec.37(1)(b) of the Act. 3. Heard Sri.Mohammad Salahudhin, the learned counsel appearing for the appellants herein and Sri.C.Harikumar, the learned counsel appearing for the respondent herein/claimant in the arbitration case. 4. The claim petition was filed by the respondent herein before the sole Arbitrator in terms of the Act. The claimant is a non-banking financial company doing business in hire purchase, lease, loan cum hypothecation and allied business. The appellants herein had borrowed an amount of Rs.2,60,000/- from the respondent company and entered into loan hypothecation agreement with the claimant on 21.01.2008 for purchasing a second hand lorry and the total agreement value was Rs.3,89,622/- payable in 46 monthly instalments and it was also agreed by the appellants that they would pay the overdue interest @ 3% per month in the case of default payment of monthly instalments, insurance premium etc. incurred by the respondent company. It is the specific case of the claimant that the appellants were irregular in clearing the loan instalments and which resulted in serious defaults and despite various repeated demands, the appellants did not care to pay the Arb.Appeal No.74 of 2017 3 balance amount. Thereupon in terms of the agreement, the respondent/claimant had requested the appellants herein to surrender the vehicle and that consequently the vehicle was voluntarily surrendered by the appellants herein and the claimant sold the said vehicle on 25.04.2012 for a sale consideration of Rs.1,00,000/- which according to the claimant was the best available market price at that time taking into account the age and use of the vehicle. Further, the appellants had not paid the balance amounts even after the repeated demands and notice and which resulted in institution of the arbitration claim on 28.02.2013. A reading of the arbitral award would indicate that both sides have entered appearance and tendered their respective contentions and the Arbitrator found that the claim petition is maintainable and further on merits it was found that agreement (Annexure A1 therein) would show that the appellants herein jointly borrowed a sum of Rs.2,60,000/- agreeing to repay the total value of Rs.3,89,622/- in 46 equal monthly instalments as told therein. Further that after deducting the sale value of the vehicle coming to Rs.1,00,000/- the claimant contended that balance due is Rs.2,32,854/-. However, the Arbitrator found that the claimant's case for showing the expense of Rs.11,800/- was without assigning any specific reasons and that the said amount of Rs.11,800/- is to be Arb.Appeal No.74 of 2017 4 deducted from the claim amount of Rs.2,32,854/- and balance being an amount of Rs.2,21,054/-. It is on this basis that the Arbitrator rendered the award ordering that the respondents therein/appellants herein are liable to pay Rs.2,21,054/- as on 25.04.2012 and the claimant is also entitled to get 12% interest per annum on the said amount from 25.04.2012 onwards until actual realisation with costs. As mentioned earlier, the application filed by the appellants before the District Court under Sec.34 of the Act to set aside the arbitration award dated 22.05.2015 has been dismissed by the court below on 31.01.2017. 5. Two main contentions are raised before us by the learned counsel appearing for the appellants. The first contention is that the vehicle was unlawfully seized by the claimant. The said plea was found against the Arbitrator and the court below has found that the said plea is not tenable inasmuch as the finding was that based on the demand made by the claimant, the appellants had voluntarily surrendered the vehicle which led to the sale of the vehicle on 25.04.2012. The said fact finding cannot be disturbed by us. Hence the contentions raised by the appellants regarding alleged illegality of possession of the vehicle and the consequential sale, cannot be entertained by us that too, sitting as an appellate Court under Sec.37(1)(b), that too considering the legality of the rejection of the petition filed before the District to set aside the Arb.Appeal No.74 of 2017 5 award. 6. The second contention is that the award has been passed in violation of the principles of natural justice inasmuch as the appellants were not heard by the Arbitrator. The Arbitrator has specifically found that the award itself has been passed in the presence of the learned Advocates on both sides including the counsel for the appellants herein/respondents therein and further that the records would show that both sides were represented before the Arbitrator. In the light of these aspects, both the Arbitrator and the court below repelled the above plea of the appellants. Hence, the contentions raised by the appellants based on the decisions as in **Impex Corporation** v. **Elenjikal Aquamarine Exports Ltd.** [2008 (2) KLT 822] and **Saju** v. **Muthoot Vehicle and Assets Finance Ltd.** [2015 (4) KLT 394] will not have any application in the facts of this case. 7. Yet another contention is raised before us by the appellants that the sale of the vehicle was not conducted properly by the claimant and that much higher amount would have fetched for the vehicle. We repeatedly queried to the learned counsel appearing for the appellants as to whether such a factual plea has been set up by them in the written statement filed before the Arbitrator and whether any materials or evidence have been laid in that regard. From the rival submissions Arb.Appeal No.74 of 2017 6 made before us, it appears that no such factual plea may have been set up before the Arbitrator or at any rate, this aspect is not seen raised before the Arbitrator. 8. It is well settled by the various rulings of the Apex Court in the cases as in **Associate Builders** v. **Delhi Development Authority** [(2015) 3 SCC 49] that the jurisdiction to set aside the award under Sec.34 of the Act is very limited. The contention based on violation of the fundamental policy of Indian law could be raised where a case of non compliance with the statutes and judicial precedents is made out or on issues of non compliance of natural justice and the need for judicial approach etc. 9. In the light of the above discussions, we find that the above said major contentions raised before us cannot be countenanced in this proceedings. In other words, no valid grounds have been raised to interfere with the impugned order of the District Court whereby the said Court has rejected the plea to set aside the award under Sec.34 of the Act. 10. Faced with the situation, Sri.Mohammad Salahudhin, the learned counsel for the appellants, would point out that the first appellant is now in old age and sick and that he is facing grave financial difficulties and this Court may direct that the amount and interest may Arb.Appeal No.74 of 2017 7 be reduced and further that time at least one year may be granted to clear out such amount and until then the execution proceedings in E.P.No.212/2020 on the file of the Commercial Judge, Kozhikode (arising out of award dated 22.05.2015 in AOP No.13/2013) may be kept in abeyance. We have requested the learned counsel for the respondent herein to get instructions on those aspects. Today when the matter is taken up for consideration, Sri.C.Harikumar, the learned counsel appearing for the respondent herein would submit on the basis of instructions that taking into account the old age and various aspects of this case, the respondent company is willing to settle the case for a total amount of Rs.1,50,000/- provided the appellants herein clear the said amount in 6 equal monthly instalments. The above said stand taken by the respondent company appears to be eminently reasonable and fair. Accordingly, it is ordered that the appellants may pay the total amount of Rs.1,50,000/- (Rupees one lakh and fifty thousand only) to respondent company in 6 equal monthly instalments starting from August, 2022 and the first instalment shall be cleared before the 10[th] of August, 2022. All other 5 instalments shall be paid on or before the 10[th] of every month concerned. Until then, the execution proceedings pending as E.P.No.212/2020 on the file of the Commercial Judge, Kozhikode will stand deferred. However it is made clear that if the Arb.Appeal No.74 of 2017 8 appellants defaults in any of the monthly instalments as above, the respondent will be at liberty to proceed further to realise the EP amount in the pending E.P. Registry will forward a copy of the judgment to the Commercial Judge, Kozhikode who is dealing with E.P.No.212/2020 for necessary information. The impugned order of the District Court in O.P.(Arb.) No.79/2016 will stand modified to limited extent above. With these observations and directions, the above arbitration case will stand disposed of. **Sd/-** **ALEXANDER THOMAS JUDGE** **Sd/-** **MURALI PURUSHOTHAMAN** **JUDGE** spc/