IMPORTANT POINTS
Section 8(2) of Arbitration and Conciliation Act, 1996 means that court shall not consider any application filed u/s 8(1) unless it is accompanied by original arbitration agreement or duly certified copy thereof. Filing of the application without such original or certified copy, but bringing original arbitration agreement on record at the time when of consideration of the same by the Court shall not entail rejection of the application u/s 8(2).
There is no provision of law that disputes arising out of partnership deed cannot be referred to arbitration.

Headnote:(a) Arbitration and Conciliation Act, 1996 – Section 8(2) – Entertainment of the application, unless accompanied by the original arbitration agreement or a duly certified copy thereof, is prohibited – Expression ‘entertained’ – Order XXI, Rule 90, Proviso, Code of Civil Procedure, 1908 – Word 'entertain' does not refer to initiation of the proceedings but to the stage when the Court takes up the application for consideration – Section 8(2) means that court shall not consider any application filed u/s 8(1) unless it is accompanied by original arbitration agreement or duly certified copy thereof – Filing of the application without such original or certified copy, but bringing original arbitration agreement on record at the time when of consideration of the same by the Court shall not entail rejection of the application u/s 8(2) – Instantly defendants filing original Retirement Deed and Partnership Deed before the court proceeded to decide the application – Retirement Deed and Partnership Deed also relied by the plaintiffs – Hence it is not open to them to plead rejection of defendants’ application on ground of being not accompanied by the deeds – Sais application rightly entertained. (Para 19, 21, 22, 23)
       (1971) 3 SCC 124; (1998) 1 SCC 732 – Relied upon
       (2008) 2 SCC 602; (2007) 7 SCC 737 – Referred
       (b) Arbitration and Conciliation Act, 1996 – Section 8(1) – All parties to the retirement deed as also partnership deed parties to arbitration agreement – Only one party, defendant no. 6 not a party to said deeds as he did not inherit any share in Partnership deed or in the schedule property – No question of bifurcation of either cause of action or parties – No error in referring parties to arbitration. (Para 26, 27)
       (c) Arbitration and Conciliation Act, 1996 – Section 8(1) – Retirement deed and the Partnership deed both signed by retiring partners, continuing partners and concurring partners containing arbitration clause – In absence of any provision of law barring reference of dispute of partnership to arbitration, no error in impugned judgment. (Para 28, 29)
       Facts of the case:
       The appellants/plaintiffs had filed the original suit No. 5 of 2014 praying for permanent prohibitory injunction on the files of District Judge Mangalore. The Defendants/respondents filed an IA u/s 8(1) of Arbitration and Conciliation Act, 1996. The vacation District Judge allowed the application and referred the parties to arbitration.
       This order has been affirmed by the High Court in revision.
       Finding of the Court:
       There is no error in the impugned judgment.
       Result: Appeal dismissed.

JUDGMENT

ASHOK BHUSHAN, J.

Leave granted.

2. This appeal has been filed against judgment dated 08.07.2014 of High Court of Karnataka in Civil Revision No. 219 of 2014. The Civil Revision was filed by the appellants against the judgment and order dated 27th May, 2014 of vacation District Judge, Mangalore in Original Suit No. 5 of 2014 filed by the appellants/plaintiffs. In the Suit, I.A. No. IV was filed by the defendants/respondents under Section 8(1) of Arbitration and Conciliation Act, 1996, relying on arbitration agreement in retirement deed dated 25.07.2005 (hereinafter referred to as retirement deed) as well as in the partnership deed dated 05.04.2006 (hereinafter referred to as partnership deed). Learned District Judge has allowed the application filed by the defendant under Section 8(1) of 1996 Act. Parties to the suit were referred to the arbitration to settle the dispute as per arbitration agreement. The High Court wide impugned judgment has affirmed the order of Trial Court with observation that parties can press for an early trial. The Revision Petition was disposed of accordingly. Aggrieved against the judgment of High Court, the appellants/plaintiffs have filed this appeal.

3. The brief facts necessary to be noted for deciding this appeal are:

(i) Late Ramabhakta had started a business of manufacture and sales of 'Beedi' under the name 'M/s Neo Subhash Beedi Works'. After his demise, his six sons, namely, late M. Narasimha Bhakta, late M. Subhaschandra Bhakta, late M. Prakashchandra Bhakta, late M. Ganesh Bhakta, late M. Gangadhar Bhakta and late M. Ashok Bhakta, constituted the partnership firm.

(ii) M. Narsimha Bhakta retired from the firm as per the release deed dated 30.06.1986 and the remaining partners continued with the firm.

(iii) M.Prakashchandra Bhakta died on 20.03.1995 and as per his Will, his minor son Master M. Vinayaka Bhakta was admitted to the partnership as per partnership deed dated 21.03.1995. On 06.03.1997, Subhaschandra Bhakta died and his LRs, namely Defendant Nos. 1 to 4 became partners. Ashok Bhakta died on 18.09.2001. The first plaintiff is son of late Ashok Bhakta.

(iv) On 25.07.2005, retirement deed was executed in which Defendant Nos. 1 to 4 were stated to have retired from partnership. The partnership deed dated 05.04.2006 was entered between late M. Gangadhar Bhakta, M. Vinayaka Bhakta, Defendant No. 5 and M. Vipin Bhakta(S/o late M. Ganesh Bhakta) and Master M. Anantesh Bhakta, 1st Plaintiff. M.Gangadhar Bhakta expired and his estate is represented by the Plaintiff Nos. 2 & 3.

4. The suit for partition was filed by M. Prakaschandra Bhakta and others against M. Subhaschandra Bhakta and others, being O.S. NO. 4 of 1985. The preliminary decree was passed on 31.07.1986. M. Subhaschandra Bhakta and others filed FDP No. 24 of 1992 for preparation of final decree in which the compromise petition dated 04.04.1994 was filed and compromise decree was passed on 05.04.1994. As per the compromise decree, Item No. 1 of 'A' schedule property was allotted to M. Subhaschandra Bhakta and Item No. 2 was allotted to M. Prakashchandra Bhakta.

5. An agreement to sale dated 19.04.1993 was executed by M. Prakashchandra Bhakta in favour of partnership firm. Similar agreement to sell dated 19.04.1993 was also executed by M.Subhaschandra Bhakta in favour of firm.

6. A Suit No. 5 of 2014 was filed by three Plaintiffs (appellants) against six Defendants who are Respondent Nos. 1 to 6 in this appeal praying for permanent prohibitory injunction restraining the Defendants or anyone claiming through them for transferring or alienating 'A' schedule property. Further, the permanent prohibitory injunction was sought against the Defendant regarding possession and enjoyment of property by Plaintiff. The Defendant had filed I.A.No.IV under Section 8(1) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) on 09.05.2014, praying to pass an order referring the parties to the arbitration for adjudication of the di

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2016 Supreme(SC) 889

SUPREME COURT OF INDIAR.K. AGRAWAL, ASHOK BHUSHAN, JJ.ANANTHESH BHAKTA REPRESENTED BY MOTHER USHA A.BHAKTA & ORS. – APPELLANTSVERSUSNAYANA S. BHAKTA & ORS. – RESPONDENTSCIVIL APPEAL No.10837 OF 2016 (ARISING OUT OF SLP(C) NO. 31179 OF 2014)Decided On : 15-11-2016

Cases Referred (4)

SUPREME COURT OF INDIA
R.K. AGRAWAL, ASHOK BHUSHAN, JJ.
ANANTHESH BHAKTA REPRESENTED BY MOTHER USHA A.BHAKTA & ORS. – APPELLANTS
VERSUS
NAYANA S. BHAKTA & ORS. – RESPONDENTS
CIVIL APPEAL No.10837 OF 2016 (ARISING OUT OF SLP(C) NO. 31179 OF 2014)
Decided On : 15-11-2016