The court clarified the applicability of legal provisions related to arbitration, stamping, registration, dissolution of partnership firm, and limitation, emphasizing the enforceability of arbitration clauses and the appointment of an arbitrator to resolve disputes.

JUDGMENT :

1. Heard Mr. Patni, learned Counsel for the applicant and Mr. Sushant Dixit, learned Counsel for the non applicant. There is no dispute regarding execution of an agreement dated 27-10-2015 between the non-applicant and M/s Choudhari Food Industries, a Partnership Firm, of which the applicant herein namely Rajesh Madhavrao Chaudhari, was the partner. It is not disputed, that the agreement contains an arbitration clause 16, which is as under :

“16) That, in case, of any disputes as regards the interpretation of these presents or in relation to payment either delayed or otherwise in respect of purchase of the finished goods by the First Party and supply by the Second Party, the parties do hereby agree and undertake to settle down the same by Arbitration and the decision of Arbitrator shall be final, conclusive and binding on both the parties. The appointment of Arbitrator shall be made by both the parties mutually and amicably”.

2. Since there was a dispute between the parties, a notice was given on 29-1-2020 by the applicant invoking the arbitration clause, which was not replied to, as a result of which the present application has been filed for appointment of an Arbitrator.

3. The application is opposed by Mr. S. V. Dixit, learned Counsel for the non-applicant on several grounds as under :

(a) the agreement dated 27-10-2015 which relates to purchase of frozen meat by M/s Choudhari Food Industries from the non-applicant, is insufficiently stamped.

(b) the applicant is a Proprietorship Concern, whereas the agreement was with M/s Choudhari Food Industries, a Partnership Firm, and therefore, the same does not satisfy the requirement of section 7 of the Arbitration and Conciliation Act.

(c) since the Partnership Firm M/s Choudhari Food Industries was not registered under the provisions of the Partnership Act, it is affected by the bar under section 69 of the Indian Partnership Act, 1932.

(d) the claim is barred by limitation as the supply was stopped on 1-4-2016 and notice invoking arbitration clause was issued on 29-1-2020.

4. Insofar as the plea, that the agreement dated 27-10-2015 is insufficiently stamped and is unregistered, it is material to note that the agreement is for purchase of frozen meat, and therefore, does not require registration. For the contention, that the agreement is insufficiently stamped, Mr. Dixit places reliance upon Article 5(h)(A)(iii) of the Maharashtra Stamp Act, which relates to specific performance by any person or a group of persons and where the value of contract exceeds Rs.1,00,000/-, and upto Rs. 10,00,000/- the duty payable is 0.25 % of the amount agreed in the contract subject to minimum of Rs.100/- and in any other case 0.5% of the amount agreed in the contract. A perusal of the agreement dated 27-10-2015, would indicate, that no specific amount was agreed, but a rate was fixed per Kilogram, and the amount would therefore depend upon the orders placed from time to time. This is therefore a case where the agreement, would clearly not fall within the scope of Article 5(h)(A)(iii) of the Maharashtra Stamp Act. Even otherwise, a claim for compensation, is being sought to be made on account of breach of the contract and it is not a case of specific performance of the contract and therefore, for this reason also the above article would not apply.

5. Insofar as the contention that the Partnership Firm being not registered, the bar under section 69 of the Partnership Act would apply, it is settled position of law that the bar under section 69(1) and (2) of the said Act, applies to filing of a suit and not to initiation of arbitration proceedings. It is also settled position of law, that an Arbitrator is not a Court, as held in Union of India vs. Ambika Construction, (2016) 6 SCC 36 in the following words :

“10. ----- However, the arbitrator is not a Court. The arbitrator is the outcome of agreement. He decides the disputes as per the agreement entered into between the parties. Arbitration