Ashok Bhan, J.
1. This judgment shall dispose of civil revision petitions No. 823 to 832, 586 to 598 and 605 to 617 of 1988, which arise between theparties on the same set of facts giving rise to common questions of law and fact. The facts being taken from briefly stated the facts are :
Sutlej Land Finance Private Limited Financiers and Transporters with their registered office at Jalandhar (hereinafter referred to as 'the respondents') filed through its director Shri Ajit Singh Deogan a petition under Section 20 of the Indian Arbitration Act, 1940 (hereinafter referred to as 'the Act'), against Hoshiarpur Azad Transport Company Limited. Hoshi-arpur, through its general manager (hereinafter referred to as 'the petitioner') for reference of the dispute which had arisen between the parties to the sole arbitrator S. Avtar Manmohanjit Singh, advocate, Jalandhar. It was alleged that the petitioner had hired bus No. PNH-3587, T.D. Jai Chand Bhasin v. Union of India, AIR 1983 Delhi 508 1968 engine No. 312-97-800-1016, chassis No. 342-050-860-6460 on hire purchase basis from respondents, vide hire purchase agreement dated December 19, 1980, that Baba Ram Singh respondent No. 2 stood guarantee for the petitioner. The petitioners were to make payment in monthly instalments as entered in the hire purchase agreement and according to Clause 22 of the said agreement, the disputes and differences between the parties, if any, were to be referred to the sole arbitrator S. Avtar Mohinderjit Singh, advocate, Jalandhar; that the petitioner failed to carry out his part of the agreement while the respondent was throughout ready and willing to perform his part of the contract.
2. The petition was contested by the petitioner only. Respondent No. 2 did not contest the same despite service and suffered ex parte proceedings to be taken against him. The petitioner denied that it had purchased any vehicle on hire purchase from the respondent or agreed to pay the amount in instalments. It is stated that the alleged agreement is a forged and fabricated document and that the same was brought into existence by respondent No. 2 who was the managing director of the petitioner-company and was one of the close relations of the general manager of the respondent-company ; that the hire purchase agreement, if any, was without consideration ; no dispute had arisen between the parties and, therefore, it was not liable to be referred for arbitration to the arbitrator.
3. The trial court, vide its order dated March 29, 1984, allowed the petition and referred the dispute to the said arbitrator. Aggrieved by this, the petitioner filed an appeal, which was accepted on August 23, 1985. The order of the trial court dated March 29, 1984, was set aside and the case was remanded to the trial court with a direction to recast the issues arising from the pleadings of the parties and then re-decide the matter afresh on the merits after affording proper opportunity to the parties to lead their evidence. After remand, the following issues were framed :
(1) Whether the respondent executed hire purchase agreement in favour of the petitioner DPA
(2) Whether the matter is liable to be referred to the arbitrator DPA
(3) Relief.
4. The parties were given opportunities to lead their evidence in support of the issues. The trial court decided both the issues in favour of the respondent and against the petitioner. The petition under Section 20 of the Act was allowed and the disputes and differences between the parties were referred to the sole arbitrator S. Avtar Mohinderjit Singh, advocate, Jaland-har, for adjudication. An appeal was carried against this order, which was rejected. The order of the trial court referring the dispute to the sole arbitrator was upheld. The present petition has been filed impugning the orders of the courts below referring the dispute for adjudication to the arbitrator.
5. I have heard counsel for the parties at length. Exhibit A-1 is the hire purchase agreement. It was signed by S. Gurbax Singh as general manager of the petitioner and A. N. Gautam, managing director of the respondent-company on behalf of the respondent. Execution of the agreement is proved by the deposition of Rasham Singh A.W.-3. This witness has deposed that agreement exhibit A-1 was signed in his presence by the parties after understanding its contents ; he further stated that he had signed the agreement as an attesting witness. Exhibit A-2 is the voucher showing the payment. Execution of the documents exhibits A-1 and A-2 was not challenged before the first appellate court. The execution of these two documents has not been challenged before me either.
6. The main argument advanced by learned counsel appearing for the petitioner was that the agreement exhibit A-1 was without consideration and, therefore, invalid and illegal; that the arbitration clause being a part of the original agreement goes with the agreement being void and, therefore, cannot be enforced, it was argued that the petitioner being the owner of the vehicle could not be the hirer of the same. I do not find any substance in this submission. The present was a petition filed under Section 20 of the Act, which reads as under :
'20. Application to file in court arbitration agreement--(1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in court.
(2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or if otherwise, between the applicant as plaintiff and the other parties as defendants.
(3) On such application being made, the court shall direct notice thereof to be given to all parties to the agreement other than, the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.
(4) Where no sufficient cause is shown, the court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the court.
(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.'
7. In order to obtain an order under Section 20 of the Act, two things have to be proved ; firstly that the arbitration agreement had come into existence before the institution of the suit and that in respect of the subject-matter of the agreement a dispute has arisen. If these two conditions are satisfied then the party instead of proceeding under Chapter II of the Act may apply to the court having jurisdiction in the matter for a direction that the agreement be filed in the court. The court after satisfying itself regarding the existence of an arbitration agreement and that a dispute has arisen between the parties in respect of the subject-matter of the agreement shall make an order of reference to the arbitrator appointed by the parties under the agreement or where the parties cannot agree upon an arbitrator, then to an arbitrator appointed by the court. In this case, the execution of the agreement is duly proved. The agreement contains clause 22 in which it is provided that all questions and matters in difference relating to the agreement shall be referred to the arbitrator named in the arbitration agreement. Exhibit A-2 is the voucher prepared on the day of the execution of the agreement. The scope of enquiry under Section 20 of the Act is a limited one. If the court is satisfied that there is a written agreement between the parties duly executed and subsisting in relation to which a dispute has arisen with regard to the subject-matter of the agreement then the court having jurisdiction is bound to make a reference. So far as the merits of the dispute regarding passing of consideration are concerned that would be for the arbitrator to decide. The Supreme Court of India in Wazir Chand Mahajan v. Union of India, AIR 1967 SC 990, while dealing with the question of limitation held as under (page 993) :
'After an agreement is filed in court and the matter is referred to the arbitrator, it is for the arbitrator to decide by the application of the law contained in the Limitation Act, whether the claim is barred. But Section 37(1) does not confer authority upon the court to reject the application for filing of an arbitration agreement under Section 20 of the Arbitration Act because the claim is not made within three years from the date on whichthe right to apply arose. In dealing with an application for filing an arbitration agreement, the court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject-matter of the agreement which is within the jurisdiction of the court. But the court is not concerned in dealing' with that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation : that question falls within the province of the arbitrator to whom the dispute is referred.'
8. In this authority, it was clearly held that once the court reaches its satisfaction regarding the existence of a written agreement which is valid and subsisting duly executed before the institution of the suit and also that a dispute has arisen with regard to the subject-matter of agreement which is within the jurisdiction of the court it is bound to make the reference under Section 20 of the Act unconcerned with the merits of the disputes. The same view was taken by a Division Bench of the Delhi High Court in Jai Chand Bhasin v. Union of India, AIR 1983 Delhi 508, wherein the following observations were made (headnote) :
'At the stage of the application under Section 20 the court is only to see that there are disputes and those disputes are to be referred to arbitration as per agreement between the parties and the arbitrator can decide those questions. The court is not concerned with the question whether the claim of the party to the arbitration agreement is barred by time. That question falls within the province of the arbitrator to whom the dispute is referred.'
9. Counsel for the petitioner relying upon Khardah Co. Ltd. v. Raymon and Co. (India) Pvt. Ltd., AIR 1962 SC 1810 and Waverly Jute Mills v. Ray mon and Co., AIR 1963 SC 90, stressed that where the agreement is held to be invalid then every part of it including the clause as to arbitration contained therein must also be held to be invalid and argued that the agreement being without consideration was void. In both these cases, referred to above, applications have been filed under Section 35 of the Act. The present application has been filed under Section 20 of the Act for making a reference to the arbitrator. As has been held earlier, the execution of agreement has not been contested and the question as to whether the consideration passed under the agreement or not shall be within the jurisdiction of the arbitrator and the same cannot be gone into at this stage of the proceedings.
10. The other submission made by counsel for the petitioner was that the petitioner was a limited company and its operation is controlled by the Companies Act ; that there is no evidence of the loan/debt having been incurred in compliance with Section 292 of the Companies Act, 1956, andthus the agreement is not binding on the company and its shareholders : that the person who executed/accepted the agreement ou behalf of the petitioner did not do so in pursuance to a valid resolution passed in his favour authorising him to execute the agreement. As has been observed by the courts below, the records and proceeding book, etc. of the company were in their possession. No evidence was led by the petitioner to the effect that its general manager or any other person acted arbitrarily and entered into the agreement without the resolution as enjoined by law. In fact Ram Singh R.W.-1 who was examined by the petitioner has evaded direct replies and stated that he was not aware if the petitioner had any minutes book. He did not categorically state that the petitioner did not pass any resolution authorising the person who executed the document on its behalf to execute the same. The burden to prove that no such resolution was passed was on the petitioner. The petitioner-company did not produce its book of resolution. The minutes regarding the resolution passed are in possession of the company and are not open for inspection to the strangers. Since the petitioner had taken the stand that its general manager had no authority to borrow the money, it was for the company to prove from its own books of minutes and resolution that no authority was given to its general manager to borrow any money. The only inference which under the circumstances can be drawn from the non-production of these books would be that had these books been produced then the same would have shown that there was a resolution passed by the company authorising its general manager to borrow the money. In Shri Kishan Rathi v. Mondal Bros, and Co. (Private) Ltd. [1967] 37 Comp Cas 256 (Cal), a learned single judge dealing with the same point observed as under (headnote) :
'Whether there was a resolution by the board of directors delegating power on the manager to borrow money is a fact which is within the special knowledge of the company and its directors. They can easily produce the resolution book or the minute book and show that there was no such delegation. If they do not do so an adverse inference must be drawn against them that had they produced them, the books would have shown such delegation to the manager.'
11. I fully subscribe to the view taken in the above-said authority.
12. No other argument was raised.
13. For the reasons recorded above, I find no merit in these revision petitions and dismiss the same with costs.