Full Judgment Text
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 19.09.2007
+ OMP No.294/2005
V RAMGOPAL ...Petitioner
- versus -
H.C.L. COMNET SYSTEMS & SERVICES LTD. ....Respondent
Advocates who appeared in this case:
For the Petitioner : Mr Vikram Mehta.
For the Respondent : Mr M.S. Vinaik.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
1. Whether Reporters of local papers may be allowed
to see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. This petition has been filed under Section 34 of the Arbitration and
Conciliation Act, 1996 challenging the award made by the sole arbitrator on
02.03.2005.
2. The petitioner, who was the claimant before the arbitrator, was an
employee of the respondent. The petitioner served as an employee from
10.3.1995 to 20.10.1998. During the course of employment, the petitioner
OMP No.294/05 Page No.1 of 5
sought the use of an official car. The respondent and the petitioner entered into
a Memorandum of Agreement dated 01.11.1996 whereby a car was taken by the
respondent company as a lessee inasmuch as the same had been financed
through Kotak Mahindra. The petitioner was given this car (Maruti Zen) for
his use subject to several conditions as per the Memorandum of Agreement
dated 01.11.1996. Clause 1 of the Agreement stipulated that the respondent
would be the lessee and the petitioner was only a bailee in respect of the car and
he had no right or title to the said car. By virtue of clause 2, the petitioner
authorised the respondent to deduct a sum of Rs 2,677/- per month towards the
personal use of the car from his salary. In terms of clause 3 of the said
Agreement, the lease period of the car was indicated as being 60 months and
the said clause importantly stipulated that the petitioner would be entitled to
purchase the car after the lease period from the respondent on paying a
consideration computed @ 1% of the value of the car. The proviso to this
clause stipulated that the entitlement of the petitioner to purchase would accrue
only upon the respondent becoming the owner of the car. The car was,
however, to remain in the possession of the employee till such time.
3. According to the learned counsel for the petitioner, clause 3 granted
valuable rights to the petitioner inasmuch the petitioner was entitled to purchase
the car by only paying 1% of the value of the car. Moreover, the car was to
remain, at all times, in the possession of the petitioner. However, this clause
OMP No.294/05 Page No.2 of 5
was applicable only if the petitioner continued to be in the employment of the
respondent for the entire duration of 60 months. In case, the petitioner did not
remain in such employment, the rights and liabilities of the parties were
governed by clause 10 of the Agreement. The proviso to clause 10 stipulated
that in the event of cessation of service of the petitioner, for any reason
whatsoever, before the expiry of the 60 months period, the petitioner shall
purchase the same from the owner of the car through the company and subject
to certain conditions. One of the conditions being that the petitioner had to pay
in advance to the respondent in lumpsum an amount equivalent to the equated
monthly installments that the respondent would have to pay to the leasing
company till the end of the lease period. There were other stipulations
depending on the stage as to when the petitioner ceased to be in the
employment of the respondent. Different stipulations were provided for
th
different periods. The periods being upto the 24 month of the allotment of the
th th
car, between the 25 month till the expiry of the 30 month and so on.
According to the learned counsel for the petitioner, the petitioner had ceased to
th th
be in the employment of the respondent between the 25 month and 30 month
whereas, according to the learned counsel for the respondent, the petitioner had
ceased to be in the employment of the respondent within the first period of 24
months. The reason for this difference is that the petitioner had tendered his
resignation in June 1998 but his resignation was accepted only w.e.f.
th
22.10.1998. Therefore, the respondent states that he resigned before the 24
OMP No.294/05 Page No.3 of 5
month was over whereas the petitioner submits that since his resignation was
th
accepted on 22.10.1998, his employment ceased only after the 24 month.
4. Be that as it may, the fact of the matter is that the petitioner had
some rights which accrued to him under clause 10 of the Agreement even in the
event of cessation of his service prior to the expiry of the 60 month period. The
learned Arbitrator, while construing the terms of the Agreement between the
parties, has not at all considered this aspect of the matter and has gone only on
the basis of what is stated in clause 1 of the agreement which stipulates that the
petitioner had no right or title to the car except as a bailee under the Agreement.
The learned Arbitrator has completely ignored the case of the petitioner that he
had rights to purchase the car on payment of the balance amount as stipulated
under the Agreement. On going through the award, I find that this aspect of the
matter has not been considered at all. In fact, there is no discussion of any
evidence and, accordingly, I feel that the learned Arbitrator has completely
misdirected himself in examining the claim of the petitioner.
5. The award, therefore, deserves to be set aside. The same is set
aside. Since the matter has to go to the Arbitrator for adjudication afresh, it
would be appropriate if an arbitrator is appointed. Accordingly, with the
consent of the counsel for the parties, I appoint Mr Jayant Nath, Sr Advocate as
the sold Arbitrator. The learned Arbitrator shall fix his own fee. The petitioner
OMP No.294/05 Page No.4 of 5
shall file a fresh claim alongwith all supporting documents before the learned
Arbitrator.
This petition is allowed as above.
BADAR DURREZ AHMED
(JUDGE)
September 19, 2007
M
OMP No.294/05 Page No.5 of 5
% Judgment delivered on: 19.09.2007
+ OMP No.294/2005
V RAMGOPAL ...Petitioner
- versus -
H.C.L. COMNET SYSTEMS & SERVICES LTD. ....Respondent
Advocates who appeared in this case:
For the Petitioner : Mr Vikram Mehta.
For the Respondent : Mr M.S. Vinaik.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
1. Whether Reporters of local papers may be allowed
to see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. This petition has been filed under Section 34 of the Arbitration and
Conciliation Act, 1996 challenging the award made by the sole arbitrator on
02.03.2005.
2. The petitioner, who was the claimant before the arbitrator, was an
employee of the respondent. The petitioner served as an employee from
10.3.1995 to 20.10.1998. During the course of employment, the petitioner
OMP No.294/05 Page No.1 of 5
sought the use of an official car. The respondent and the petitioner entered into
a Memorandum of Agreement dated 01.11.1996 whereby a car was taken by the
respondent company as a lessee inasmuch as the same had been financed
through Kotak Mahindra. The petitioner was given this car (Maruti Zen) for
his use subject to several conditions as per the Memorandum of Agreement
dated 01.11.1996. Clause 1 of the Agreement stipulated that the respondent
would be the lessee and the petitioner was only a bailee in respect of the car and
he had no right or title to the said car. By virtue of clause 2, the petitioner
authorised the respondent to deduct a sum of Rs 2,677/- per month towards the
personal use of the car from his salary. In terms of clause 3 of the said
Agreement, the lease period of the car was indicated as being 60 months and
the said clause importantly stipulated that the petitioner would be entitled to
purchase the car after the lease period from the respondent on paying a
consideration computed @ 1% of the value of the car. The proviso to this
clause stipulated that the entitlement of the petitioner to purchase would accrue
only upon the respondent becoming the owner of the car. The car was,
however, to remain in the possession of the employee till such time.
3. According to the learned counsel for the petitioner, clause 3 granted
valuable rights to the petitioner inasmuch the petitioner was entitled to purchase
the car by only paying 1% of the value of the car. Moreover, the car was to
remain, at all times, in the possession of the petitioner. However, this clause
OMP No.294/05 Page No.2 of 5
was applicable only if the petitioner continued to be in the employment of the
respondent for the entire duration of 60 months. In case, the petitioner did not
remain in such employment, the rights and liabilities of the parties were
governed by clause 10 of the Agreement. The proviso to clause 10 stipulated
that in the event of cessation of service of the petitioner, for any reason
whatsoever, before the expiry of the 60 months period, the petitioner shall
purchase the same from the owner of the car through the company and subject
to certain conditions. One of the conditions being that the petitioner had to pay
in advance to the respondent in lumpsum an amount equivalent to the equated
monthly installments that the respondent would have to pay to the leasing
company till the end of the lease period. There were other stipulations
depending on the stage as to when the petitioner ceased to be in the
employment of the respondent. Different stipulations were provided for
th
different periods. The periods being upto the 24 month of the allotment of the
th th
car, between the 25 month till the expiry of the 30 month and so on.
According to the learned counsel for the petitioner, the petitioner had ceased to
th th
be in the employment of the respondent between the 25 month and 30 month
whereas, according to the learned counsel for the respondent, the petitioner had
ceased to be in the employment of the respondent within the first period of 24
months. The reason for this difference is that the petitioner had tendered his
resignation in June 1998 but his resignation was accepted only w.e.f.
th
22.10.1998. Therefore, the respondent states that he resigned before the 24
OMP No.294/05 Page No.3 of 5
month was over whereas the petitioner submits that since his resignation was
th
accepted on 22.10.1998, his employment ceased only after the 24 month.
4. Be that as it may, the fact of the matter is that the petitioner had
some rights which accrued to him under clause 10 of the Agreement even in the
event of cessation of his service prior to the expiry of the 60 month period. The
learned Arbitrator, while construing the terms of the Agreement between the
parties, has not at all considered this aspect of the matter and has gone only on
the basis of what is stated in clause 1 of the agreement which stipulates that the
petitioner had no right or title to the car except as a bailee under the Agreement.
The learned Arbitrator has completely ignored the case of the petitioner that he
had rights to purchase the car on payment of the balance amount as stipulated
under the Agreement. On going through the award, I find that this aspect of the
matter has not been considered at all. In fact, there is no discussion of any
evidence and, accordingly, I feel that the learned Arbitrator has completely
misdirected himself in examining the claim of the petitioner.
5. The award, therefore, deserves to be set aside. The same is set
aside. Since the matter has to go to the Arbitrator for adjudication afresh, it
would be appropriate if an arbitrator is appointed. Accordingly, with the
consent of the counsel for the parties, I appoint Mr Jayant Nath, Sr Advocate as
the sold Arbitrator. The learned Arbitrator shall fix his own fee. The petitioner
OMP No.294/05 Page No.4 of 5
shall file a fresh claim alongwith all supporting documents before the learned
Arbitrator.
This petition is allowed as above.
BADAR DURREZ AHMED
(JUDGE)
September 19, 2007
M
OMP No.294/05 Page No.5 of 5