Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(SC) 569

2009(4) Supreme 218
SUPREME COURT OF INDIA
(From Delhi High Court)
Markandey Katju and V.S. Sirpurkar, JJ.
Sunder Kukreja and others — Appellants
versus
Mohan Lal Kukreja and another — Respondents
Civil Appeal No. 1910 of 2009
(Arising out of Special Leave Petition(Civil) No.1342 of 2008)
Decided on : 26-03-2009

Advocates appeared:
For the Appellants :Arun Jaitley, Sr. Adv., Navin Chawla, Advocate.
For the Respondents ; Neela Gokhale, Vijay Kumar, H.P. Singh for Dharam Bir Raj Vohra, Rajesh Prasad Singh, Advocates.

IMPORTANT POINT
If prima facie there is a live dispute, the matter should be referred to Arbitrator.

Headnote:Arbitration Act, 1940 – Section 20 – Retirement deed having been found to be not genuine, it was rightly concluded that dispute is subsisting – Matter deserved to be referred to arbitrator who would also adjudicate about the genuineness and acceptability of the retirement deed. (Paras 15 and 17)
        JT 2005(9) SC 219; JT 2007(4) SC 501 – Relied upon.
        AIR 1971 SC 1653 – Impliedly Relied upon.
        AIR 1974 SC 158 – Distinguished.
       Facts of the case :
        1. The appellant Sunder Kukreja filed a petition under Section 20 of the Arbitration Act, 1940 praying for an appointment of an Arbitrator. The parties are real brothers and were carrying on business with each other in the name and style of M/s. D.R. Kukreja and Company. Their mutual rights and obligations were governed by partnership deeds, the last of which was executed on 10.7.1984. In terms of Clause 11 of the said deed, disputes arising between the parties had to be resolved by way of arbitration before a sole arbitrator to be nominated by the parties.
        2. Subsequently the petition under Section 20 of the Arbitration Act was filed by the appellants seeking a direction for filing the arbitration agreement dated 10.7.1984 in the Court and for reference of the dispute between the parties to arbitration in terms of Clause 11 thereof.
        3. The said petition under Section 20 was opposed by the respondent herein who filed a written statement contending that there was no subsisting arbitration agreement between the parties in the light of the retirement deed dated 16.8.1990 allegedly executed by the petitioners by which the partnership between the parties stood dissolved and all claims stood completely satisfied.
        4. The learned Single Judge hearing the arbitration petition referred the disputed deed of retirement for examination and opinion to the Central Forensic Science Laboratory (CFSL) who reported that the alleged signatures of the petitioners on the alleged retirement deed were not genuine.
        5. The learned Single Judge held that the arbitration clause in the present case is wide enough to include all the disputes sought to be referred. Hence the learned single Judge allowed the petition under Section 20.
        6. The Division Bench hence set aside the judgment of the learned Single Judge and remanded the matter to learned Single Judge for a fresh consideration of the question whether the alleged retirement deed was never executed between the parties.
       Finding of the Court :
        The dispute is alive and deserves to be referred to arbitrator.
       Result : Appeal allowed, arbitrator appointed.

JUDGMENT

Markandey Katju, J.—

1. Leave granted.

2. This appeal by special leave has been filed against the impugned judgment dated 30.11.2007 of the Delhi High Court FAO(OS) No.469 of 2006.

3. Heard Shri Arun Jaitley learned counsel for the appellants and Ms. Nita Gokhale learned counsel for the respondents.

4. The dispute in this case is between brothers. The appellant Sunder Kukreja filed a petition under Section 20 of the Arbitration Act, 1940 praying for an appointment of an Arbitrator. The parties are real brothers and were carrying on business with each other in the name and style of M/s. D.R. Kukreja and Company. Their mutual rights and obligations were governed by partnership deeds, the last of which was executed on 10.7.1984. In terms of Clause 11 of the said deed, disputes arising between the parties had to be resolved by way of arbitration before a sole arbitrator to be nominated by the parties. Clause 11 reads as follows:

“11. In the event of any dispute or disputes arising between the parties in the running of the partnership business or any matter relating to partnership it shall be referred to a sole arbitrator, agreed to in writing by the parties and the award given by the sole arbitrator shall be binding on all the parties. In case, the parties cannot agree to a sole arbitrator, the matter will be decided in accordance with the Indian Arbitration Act, 1940.”

5. It was contended by the respondent true that the partnership was dissolved by the parties with mutual consent in terms of the retirement deed dated 16.8.1990 alleged to have been executed by the appellant. However, the appellant denied executing any such retirement deed.

6. Subsequently the petition under Section 20 of the Arbitration Act was filed by the appellants seeking a direction for filing the arbitration agreement dated 10.7.1984 in the Court and for reference of the dispute between the parties to arbitration in terms of Clause 11 thereof. It was alleged in the petition under Section 20 that disputes relating to payment of profits earned by the partnership firm and the interest on the said amount had arisen between the parties which called for adjudication by the arbitrator under Clause 11. The petitioner further alleged that the respondent had been mismanaging the affairs of the partnership by employing undesirable elements and other dubious means, thereby disentitling himself to remain in control of the partnership.

7. The said petition under Section 20 was opposed by the respondent herein who filed a written statement contending that the petitioner has misrepresented the true facts and that there was no subsisting arbitration agreement between the parties in the light of the retirement deed dated 16.8.1990 allegedly executed by the petitioners by which the partnership between the parties stood dissolved and all claims stood completely satisfied. It was also alleged that the petitioners had not come to the Court with clean hands and had deliberately omitted to mention the fact of their retirement from the business under the retirement deed.

8. The genuineness of the retirement deed was, however, challenged by the appellants herein (the petitioners in the petition under Section 20) who asserted that no retirement deed has been executed by them. According to the petitioners, the alleged retirement deed was a forged and fabricated document which was never executed by the petitioners, and which was prepared to somehow usurp the share belonging to the other partners in the firm without settling the accounts.

9. By an order dated 1.5.1996, the learned Single Judge hearing the arbitration petition referred the disputed deed of retirement for examination and opinion to the Central Forensic Science Laboratory (CFSL). The document in question was accordingly examined by the CFSL who reported that the alleged signatures of the petitioners on the alleged retirement deed were not genuine.

10. The learned Single Judge held that the plea that there was no

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2009 Supreme(SC) 569

IMPORTANT POINT If prima facie there is a live dispute, the matter should be referred to Arbitrator.

Cases Referred (4)

IMPORTANT POINT
If prima facie there is a live dispute, the matter should be referred to Arbitrator.