Individual Assignment

Legal Aspects of Business

Case
Dillip Kumar Ray vs Tata Finance
Ltd. (27 August, 2001)
Law
The Indian contract act, 1872

Submitted to
Dr. K M BAHARUL ISLAM
Dean (Academics) & Professor Communications

Submitted by
Leela Nallala
MBA20377
(2020-2022)
 INTRODUCTION

The Indian Contract Act, 1872 codifies the legal principles that govern
‘contracts. The Act basically identifies the ingredients of a legally enforceable
valid contract in addition to dealing with certain special type of contractual
relationships like indemnity, guarantee, bailment, pledge, quasi contracts,
contingent contracts etc
All agreements are not studied under the Indian Contract Act, 1872, as some of
those are not contracts. Only those agreements, which are enforceable by law,
are contracts.

Contract: A Contract is an agreement enforceable by law [Section2(h)]. An

agreement is enforceable by law, if it is made by the free consent of the parties
who are competent to contract and the agreement is made with a lawful object
and is for a lawful consideration, and is not hereby expressly declared to be void
[Section10]. All contracts are agreements but all agreements are not contracts.
Agreements lacking any of the above said characteristics are not contracts. A
contract that ceases to be enforceable by law is called ‘void contract’,
[Section2(i)], but an agreement which is enforceable by law at the option of one
party thereto, but not at the option of the other is called ‘voidable contract’
[(Section 2(i)].
The case, Dilip Kumar Ray vs Tata finance is revision which has assailed the
judgment/ order dated 26th April, 2000 passed by the learned additional district
Judge, Bhubaneswar in Misc. Case No. 251 of 1998 on an application under
order 39, rules 1 & 2, C.P.C. is based on the section 28 of the Indian contract
act, 1872 and few provisions of arbitration and conciliation act which deals with
the execution of agreement between parties and challenge to the same
Judgement of the case, the reference has been made to the cases below

I. Vineet Kumar vs Smt. Bhagwandei on 5 April, 1977

II. Hakam Singh vs M/S. Gammon (India) Ltd on 8 January, 1971,
III. A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem on 13 March,
1989,
IV. Prag Oil Mills Depot Vs Transport Corporation of India ... on 20
February, 1978,
However, the relevant sections and laws has been discussed in separate section
below
An effort has been made, through the case and its judgment, to understand the
degrees of the specified sections of the act. The case has strong and reasonable
claims on the part of the appellant and the respondent, but the case was not
discussed in advance and the civil revision dismissed as the complaint was
brought before the wrong court.

FACTS OF THE CASE

There was a disagreement between the parties as to the jurisdiction of the court
and the jurisdiction of the arbitrator.
When the plaintiff decided to issue a clearance certificate, the defendant tried to
seize possession of the vehicle under the incorrect pretext that the plaintiff had
not yet repaid the vehicle.
The value of the loan. The defendant also named an arbitrator who advised the
complainant of the dispute.

The defendant had named an arbitrator who had advised the complainant of the
case. The plaintiff then lodged an application for a declaration that the
arrangement in question was invalid in law; that the arbitration proceedings
were unconstitutional and that the defendant had no legal right to seize the car
and take possession of the same and further request for a permanent injunction
against the defendant and the Arbitrator.
In the above mentioned event, the parties enter into a sale-purchase agreement
and it was concluded in Madras. It has been mentioned in the clause of the
agreement that in the event of any conflict relating to the same, arbitration is to
be referred to Bombay. The parties have made it clear that Bombay is the place
for arbitration.
 ARGUMENTS OF THE PARTIES
The complainant claims that any payment is made in Bhubaneswar, the
Bhubaneswar courts have jurisdiction to try the matter.
The court held that the arbitration provision in the agreement specifies that
disputes in Bombay and therefore Bombay have jurisdiction in respect of the
same.
The court also argued that the place where payment is made does not grant
jurisdiction to that place since the Bhubaneswar courts do not have jurisdiction
to try the case.
Foreign jurisdiction provision: unilateral choice clause
The unilateral choice provision deals with the implementation of various types
of dispute settlement, such as arbitration or litigation, etc. However this
provision is only applicable to one party and is not mutually exclusive.

ANALYSIS
(legal knowledge, reference to the laws and the judicial reasons)

Indian Contract Act 1872 Arbitration and conciliation Act 1996

Section 28 of Communication Act 1872, which applies to 'agreements within
the scope of legal proceedings, void. by
(a) that any party to it is exclusively limited to the protection of its rights under
or in respect of any contract, to the normal legal proceedings in the ordinary
courts, or to the restriction of the time during which it can therefore exercise its
rights;
(b) that terminates the rights of any party thereto or discharges any party thereto
from any responsibility under or in respect of any contract at the end of a
defined duration in such a way as to preclude any party from exercising its
rights, is void to that extent.

Section 17 of Contract Act 1872 - talk of 'Fraud' which is described as—'Fraud'

means and includes any of the subsequent actions committed by a party to a
contract, or with his connivance, or his agent, with the intention of deluding
another party or his agent, or of inducing him to enter into a contract: 'Fraud'
means and includes any of the subsequent acts committed by a party to a
contract, or wi. —The mere silence as to the facts likely to affect a person's
ability to enter into a contract is not a fraud, unless the circumstances of the case
are such that, having regard to them, it is the obligation of a person to remain
silent to speak, or unless his silence is in itself, equal to speech.

JUDGEMENT
It is alleged that the defendant-opposite party, when continuing with the loan,
had taken the signatures of the complainant in a printed form with blank spaces
and used the equivalent against the complainant without enabling him to
comply with the terms of the agreement or with constant demands. The
Plaintiff, however, continued to pay monthly instalments on a regular basis and
believed that all the money had been paid out before 28-2-98. However the car
was delivered to the claimant a few years after the initial sum had been
deposited, contrary to the agreement between the parties. When the complainant
decided to issue a clearance certificate, the defendant tried to take custody of the
vehicle under the false excuse that the complainant had not yet repaid the
balance of the loan. The defendant also named an arbitrator who advised the
plaintiff of the lawsuit. Accordingly, the plaintiff lodged a lawsuit for a
judgment that the arrangement in question was unconstitutional by law; that the
arbitration was invalid by law; that the arbitration action is against the law
which the defendant has no legal right to seize the car and to take control of the
equivalent and to continue to pray for a final injunction against the defendant
and hence the Arbitrator. The plaintiff also lodged an application for an ad hoc
injunction prohibiting the defendant from seizing the vehicle.

SIMILAR CASES
• Vineet Kumar vs Smt. Bhagwandei on 5 April, 1977 This revision is directed against
an order whereby the trial court rejected a preliminary objection which was raised on
behalf of the defendant to the maintainability of the suit.
• Hakam Singh vs M/S. Gammon (India) Ltd on 8 January, 1971, in the event of any
dispute, arising out of this sub-contract, the parties hereto agree that the matter shall
be referred to arbitration by two Arbitrators under the Arbitration Act of 1940 and
such amendments thereto as may be enacted thereafter.
 LEARNINGS FROM THE CASE
The main lessons learned from the case concerned were the application of
Section 28 of the Indian Contract Act, 1872, and the Arbitration and
Conciliation Act 1996 and the Arbitration Act, 1940, not only through Dillip
Kumar Ray vs Tata Finance Ltd. But also in other similar cases, the
application of the law is further important learning from the case in the
practical context below.
Respondent of their main office in Bombay and they were liable in respect of
the cause of the action-which had arisen under the terms of the tender to be
brought before the Courts of Bombay. Where it had its principal place of
business so that the Companies could be sued at their principal place of
business.
A party is bound either by the provisions of the Constitution, by statutory
provisions or by any rule or by any contract that is not contrary to public
policy. For its convenience, it is open to a party to determine the jurisdiction
of any competent court to have its dispute decided by that court on its own.
In their words, if one or more courts have jurisdiction to try any suit, it is
open to the parties to choose one of the two competent courts to decide their
disputes. In cases where the parties expressly agree, in accordance with their
own agreement, that their dispute is to be tried by only one of them the party
may only bring an action before that court on its own to which they have
agreed.