Sh. Manmohan Singh vs Magma Finance Ltd. and Another

Sanjay Karol, J.—Plaintiff Manmohan Singh (hereinafter referred to as petitioner) purchased a vehicle, which was financed by Magma Finance Limited (hereinafter referred to as defendant No. 1). The vehicle was insured with National Insurance Company Limited (hereinafter referred to as defendant No. 2). The vehicle met with an accident. Claims were settled inter se the parties and amount was directly paid by defendant No. 2 to defendant No. 1. Petitioner filed a suit for rendition of accounts and recovery of Rs. 1,04,170/- against both the defendants. Since agreement between the petitioner and defendant No. 1 contained an arbitration clause, an application u/s 8 of the Arbitration & Conciliation Act, 1996, was filed, which stands decided vide impugned order dated 20.02.2013 (Annexure P-1). While assailing the same, learned counsel invited my attention to the decision rendered by Madras High Court in Manoharamma Hotels and Investments Pvt. Ltd. Vs. Aruna Hotels Ltd. and Others, and by the Apex Court in Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya and Another,

Having heard learned counsel for the parties as also perused the record, I am of the considered view petition only merits rejection. It is not in dispute that hire-purchase agreement was entered into between the petitioner and defendant No. 1. It is also not in dispute that vehicle was insured with defendant No. 2. It is also not in dispute that the vehicle met with an accident and damage caused to the vehicle was assessed. Certain claims were settled and amount stood paid by defendant No. 2 directly to defendant No. 1. But this was on agreed terms by all the parties. This was for the simple reason that under the hire-purchase agreement, actual owner of the vehicle was the financer. In the suit there is no independent or separate cause of action against the insurer. Settlement took place on the agreed terms between the parties to the lis. In my considered view, ratio of law laid down by the Apex Court is not applicable in the given facts. The subject matter of this suit is essentially inter se the petitioner and defendant No. 1, amongst whom there is an agreement containing an arbitration clause. As such, the Court below has rightly allowed the application and referred the matter for adjudication by the sole Arbitrator.

With the aforesaid observations, present petition stands dismissed, so also the pending application(s), if any.