IN THE HIGH COURT AT CALCUTTA
SHEKHAR B. SARAF, J.
Partha Pratim Banerjee & Anr. - Petitioners
Versus
Satya Narayan Jaiswal & Ors. - Respondents
AP No. 441 of 2021
Decided On : 14-03-2023
Arbitration and Conciliation Act, 1996 - Sections 9, 11 , 11(6A) , 5 and 8 - Misappropriation of business funds - Deed of partnership - Petitioners and the respondents no. 1 and 2 formed a partnership business, that is firm, for purpose of running and operating a restaurant and/or bar - Deed of partnership was executed between the partners - Firm was brought to life for a period of at-least 21 years for operating the restaurant from the premises – Held, Petitioners were not even in dispute with respondent no. 1 and were in fact arrayed as correspondents - At no particular time can it be said that there was a ‘breaking point’ from which the limitation period started running. invocation of arbitration was done was during existence of the firm and for adjudication of disputes that had arisen and needed to be resolved - Declaration by Arbitrator in terms of Section 12(1) in the form prescribed in the Sixth Schedule of Act before Registrar - Petition (being A.P. 441/2021) is disposed of.
JUDGMENT :
Shekhar B. Saraf, J.
1. The petitioner no. 1, Partha Pratim Banerjee and petitioner no. 2, Joseph Emmanuel Gomes, carry on business under the name and style of “RPS Enterprise” (hereinafter referred to as the ‘firm’) as partners from premises no. 77/1A, Park Street, Police Station-Park Street, Kolkata 700016.
2. The respondent no. 1, Satya Narayan Jaiswal and respondent no. 2, Pradip Jyoti Agarwal are also partners carrying on business under the name and style of the firm.
3. The respondent no. 3 is the firm having its registered office at premises no. 77/1A, Park Street, Police Station-Park Street, Kolkata 700016 (hereinafter referred to as ‘the premises’).
Relevant Facts:
4. The petitioners and the respondents no. 1 and 2 (hereinafter referred to as ‘the partners’) formed a partnership business, that is the firm, for the purpose of running and operating a restaurant and/or bar. The partners named the said restaurant ‘Copper Handi’.
5. A deed of partnership dated September 24, 1998 (hereinafter referred to as ‘the deed of partnership’) was executed between the partners. The firm was brought to life for a period of at-least 21 years for operating the restaurant from the premises.
6. A deed of lease dated February 19, 2000 was executed between the respondent no. 1 and the firm for a period of 21 years. However, the said deed was cancelled on February 21, 2000. Subsequent to which the respondent no. 1, being the landlord of the property, was to receive Rs. 1000 from the tenant, being the firm.
7. The respondent no. 2 filed a title suit no. 260 of 2004 against the petitioner no. 1 and respondent no.1 on October 4, 2002. The present respondent no. 1 along with the present petitioner no. 1 filed an application under Section 5 of the Act read with Section 8 of the Act for stay of the suit. The Learned VIth Bench of the City Civil Court, Calcutta, stayed the suit and directed the parties to refer the matter in disputes to the arbitrator.
8. In the year 2005, a criminal proceeding was initiated against the then manager, Rabindra Prasad Agarwal, for misappropriation of business funds. The respondent no. 1 had, by letter dated June 27, 2005, authorised the petitioner no. 1 to file all necessary documents in connection with the said criminal proceeding. Furthermore, the respondent no. 1 had, by letter dated December 14, 2011, requested the petitioner no. 1 to pursue matters relating to the firm with the excise department, Government of West Bengal.
9. In the minutes of the meeting held on May 17, 2017, the partners of the firm had discussed the disputes and issues among the partners and agreed to resolve the disputes within a reasonable time and the date of the next meeting was fixed on May 26, 2017, which never took place.
10. Being the authorised representative of the partnership firm, the petitioner no. 1 issued a letter dated November 29, 2018 to the Collector of Excise, Kolkata, requesting to grant him an opportunity of being heard in order to resolve the issue of renewal of the excise license of the firm.
11. Owing to the underlying disputes that had arisen between the partners, the petitioner no. 1 sent a letter dated November 29, 2018 to all co-partners, requesting their cooperation for the renewal of the excise license of the partnership business. Only the petitioner no. 2 had replied to the said letter.
12. The petitioners became aware of alleged breaches of the deed of partnership. They visited the premises and were allegedly prevented from entering the same. They were allegedly refused any books of accounts. The petitioners lodged a complaint with the Park Street Police Station on December 12, 2018. Thereafter, the petitioners got to know that the respondent no. 1 has allegedly inducted tenants in the premises.
13. The petitioners filed a Section 9 application under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) before the Learned City Civil Court, Calcutta, VIth Bench on December 19, 2018. The
SupremeToday
The main legal point established in the judgment is that the dispute amongst the partners regarding the dealings of the firm could be referred to arbitration as per the partnership deed, but once the....
A new cause of action cannot revive an arbitration petition previously dismissed as barred by limitation; the original denial of the agreement remains effective.
A partner cannot submit a dispute to arbitration without express authority from all partners, as required by Section 19(2)(a) of the Indian Partnership Act.
The main legal point established in the judgment is that a purportedly fresh cause of action cannot extend the limitation period for filing an arbitration petition, and the court may dismiss a petiti....
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