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2006 Supreme(Bom) 2044

IN THE HIGH COURT OF BOMBAY
(R.M. Lodha and S.A. Bobde, JJ.)
MASOOD MOHMMED HUSAIN - Appellant
Versus

GULAM RASUL MOHAMMEDALI SHAIKH and others - Respondents
Arbitration Petition No. 194 of 2005
Decided on 15-12-2006.
Advocates appeared
For appellant: D. H. Mehta with D.O. Mehta instructed by T. A. Purohit
For respondents: P. K. Samdani, Senior Counsel with V. K. Merchant instructed by M/s Kishore Thakordas and Co.

Headnote:Arbitration and Conciliation Act, 1996 - Section 9 - Partnership Act, 1932, Section 69 - Unregistered firm - Application under Section 9 of Act by a partner of said firm - Effect of non- registration of - Bar under Section 69(3) of Partnership Act - Application maintainable. - An application under Section 9 of the Arbitration and Conciliation Act moved by a partner of an unregistered firm is maintainable is more appropriate as it enables the parties to avail of a remedy which otherwise would not have been available by virtue of sub-section 2(A) of Section 69 introduced by the Maharashtra Legislature. Having held that the application under Section 9 of the Arbitration and Conciliation Act is maintainable.

ORAL JUDGMENT

R. M. LODHA, J. :- The original petitioner, whose application under section 9 of the Arbitration and Conciliation Act, 1996, is rejected by order dated 22nd August, 2005 is in appeal before us.

2. Brief facts of the matter are thus:

The appellant (hereinafter to be referred as "the petitioner") set up the case in the arbitration petition that by a Deed of Partnership dated 6th September, 2002, the partnership was constituted between the petitioner and the respondents to carryon business as developers and builders in the name and style of M/s Amber Enterprises. That the said firm is unregistered is not in dispute. According to the petitioner, the said partnership was dissolved by the petitioner. The partnership firm is said to have owned various assets. The Deed of Partnership contains an arbitration clause. As per the case set up by the petitioner, disputes and differences between the parties having been arisen, are to be adjudicated upon by the arbitral tribunal. In the application under section 9, therefore, the petitioner prays for interim relief for appointment of the Receiver of a partnership assets and other ancillary reliefs.

3. The respondents contested the arbitration petition and inter alia raised the preliminary objection that the partnership firm according to the petitioner having already been dissolved was not a registered firm and, therefore, the application under section 9 of the Arbitration and Conciliation Act, 1996 was not maintainable in view of bar under section 69, of the Indian Partnership Act.

4. The learned single Judge held that even if the partnership firm is not registered, the application under section 9 of the Arbitration and Conciliation Act, 1996 was maintainable. However, the learned single Judge further held that since arbitral proceedings themselves were not maintainable, the petitioner was not entitled to any interim order from the Court.

5. The first question that arises for our consideration is whether section 69 of the Indian Partnership Act as applicable in the State of Maharashtra affects the maintainability of the application under section 9 of the Arbitration and Conciliation Act, 1996. The Senior Counsel and Counsel for the parties cited few judgments of the Supreme Court in support of their rival contentions. We may consider these judgments now.

6. In the case of Jagdish Chandra Gupta vs. Kajaria Traders (India) Limited, 1965 Mh.L.J. (SC) 45 = 1964 Bombay Law Reporter (Vol. LXVI) 710, the Constitution Bench of the Supreme Court was concerned with the construction of the words "other proceeding" in section 69(3) of the Indian Partnership Act. The Constitution Bench held that the words "other proceeding" in section 69(3) of the Indian Partnership Act must receive their full meaning untrammelled by the words "a claim of set-off' preceding these. The latter words, Supreme Court held, neither intend nor can be construed to cut down the generality of the words "other proceeding". Incidentally, we may notice that the Supreme Court in Jagdish Chandra Gupta (supra) was dealing with the proceedings under section 8(2) of the Arbitration Act, 1940. This is what the Supreme Court said :

"The first question to decide is whether the present proceeding is one to enforce a right arising from the contract of the parties. The proceeding under the eighth section of the Arbitration Act has its genesis in the arbitration clause, because without an agreement to refer the matter to arbitration that section cannot possibly be invoked. Since the arbitration clause is a part of the agreement constituting the partnership it is obvious that the proceeding which is before the Court is to enforce a right, which arises from a contract. Whether we view the contract between the parties as a whole or view only the clause about arbitration, it is impossible to think that the right to proceed to arbitration is not one of the rights which are founded on the agreement of the parties. The words of section 69(

































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