Prasenjit Mandal, J.@mdashThis application is at the instance of the Plaintiff and is directed against the order No. 21 dated August 28, 2006
passed by the learned Judge, City Civil Court, Third Bench, Calcutta in Title Suit No. 163 of 2006.
2. The Plaintiff instituted the suit for declaration, permanent and mandatory injunction stating, inter alia, that he is a registered owner of a motor
vehicle under the registration No. WB 19-6763. The Plaintiff purchased the said vehicle upon taking a loan from the Defendant/opposite party
upon execution of different papers. The said loan was duly repaid by the Plaintiff. Thereafter, the Plaintiff took another loan of Rs. 2,25,000/- to be
paid by 23 monthly instalments commencing from July, 2004. The Plaintiff repaid loan up to 17th instalment but he could not repay the balance
installments starting from 18 to 23rd instalments. Thus, the total dues to be recovered from the Plaintiff were to the extent of Rs. 68,000/-. But all
of a sudden, on February 4, 2006 the Defendant / opposite party herein forcibly seized the said vehicle at Thakurpukur. For that reason, the
Plaintiff / Petitioner filed the said suit for the reliefs already stated.
3. The Defendant entered appearance and at the initial stage it filed an application u/s 5 and 8 of the Arbitration and Conciliation Act, 1996
contending, inter alia, that since there is a clause for arbitration, the suit in the present form is not maintainable at all. Accordingly, prayed for
dismissal of the suit.
4. Upon due consideration of the application and its objection and on hearing the submission on behalf of both the sides, the learned Trial Judge
allowed the application under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 by the impugned order and thus, he dismissed the suit
on contest without costs. Being aggrieved by the said order of dismissal of the suit, this application has been preferred.
5. Now, the point that arises for decision in this application is whether the impugned order should be sustained.
6. Upon hearing the learned Counsel for the Petitioner and on going through the materials on record, I find that initially the Petitioner took a loan
from the opposite party for purchase of the vehicle under registration No. WB 1906763 on execution of several documents. The Petitioner repaid
the entire loan amount as per terms and conditions and thus, the Plaintiff became the owner of the said vehicle. Subsequently, the Petitioner took a
loan of Rs. 2,25,000/- against the said vehicle as security on condition to repay the loan by 23 monthly instalments at the rate of Rs. 11,400/- each
and the first instalment was to be paid within July 25, 2004. The Petitioner paid 17 instalments but he could not repay the balance instalments
amounting to Rs. 68,000/-.
7. The contention of the Petitioner is that the opposite party forcibly seized the said vehicle. So, he filed the said suit for declaration and injunction.
8. At the initial stage of the suit, the opposite party filed the application under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996
contending that there is an arbitration clause as per agreement for the loan. The opposite party filed a copy of the agreement which lays down the
arbitration clause being serial No. 9.19. For proper appreciation of the said dispute, this clause is quoted below:
Unless the same falls within the jurisdiction of the Debts Recovery Tribunal established under the Recovery of Debts due to Banks and Financial
Institutions Act, 1993, any and all claims and disputes among out of or in connection with the agreement or its performance shall be settled by
arbitration by single Arbitrator to be appointed by the Bank.
9. It is not in dispute that the Petitioner had signed the agreement on these terms and conditions for getting the loan. The opposite party took steps
under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 at the very initial stage. Accordingly to the provisions of the said Act,
particularly Sections 5 & 8 of the said Act, the suit cannot proceed in the form as made in the present case and as per Section 8, the parties should
be referred to arbitration for seeking the remedies and the suit cannot proceed.
10. Mr. Chakraborty, learned Advocate appearing on behalf of the Petitioner, submits that as per materials on record after seizure of the vehicle it
had been sold to a third party and if the suit stands dismissed on contest and if the Petitioner does not get appropriate remedy in the arbitration, he
would not be able to seek further relief from the Court against the third party, if requires. So, the order of dismissal should be set aside.
11. From the body of the plaint, I find that the plaint does not disclose that there is an arbitration clause. In fact, the Petitioner admitted that he
signed as many as 74/75 documents and the contents of the documents were not shown to him and that he was not aware of the contents of those
documents. Whatever may be, since the signature of the Petitioner on the agreement for conciliation is being in admitted position, I am of the view
that there is no scope to avoid the arbitration clause, as stated earlier. So, in view of Section 5 of the said Act of 1996 the Petitioner cannot be
allowed to proceed with the suit. Since it is stated that the opposite party had sold the vehicle to a third party, if the situation demands subsequently
the Petitioner may take appropriate steps against the third party in accordance with law. For the time being, in view of the arbitration clause, the
present suit cannot proceed and the parties to the suit shall be referred to arbitration in view of Clause 8 of the Arbitration and Conciliation Act,
1996.
12. So, instead of recording the order of dismissal on contest of the suit, I am of the view that such portion of the impugned order should be set
aside and in that place it shall be recorded that the suit is disposed of on contest and that the parties are referred to arbitration.
13. This application is, therefore, allowed. The order of dismissal of the Title Suit No. 163 of 2006 on contest without costs as recorded in the
impugned order is hereby set aside. It is recorded that the suit stands disposed of on contest without costs.
14. The parties to the suit are referred to the arbitration to solve their dispute. The impugned order is modified to this extent.
15. Urgent xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.
