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2005 Supreme(Del) 225

High Court Of Delhi
MULAKH RAJ, WADHAYA RAM, WEST PATEL NAGAR, NEW DELHI - Appellant
Versus
SHASHI RANI - Respondent
W.P.(C.) : 4423 of 2002
Decided On : 02/23/2005

Advocates Appeared:
DINESH GUPTA, RAJIV KAPOOR

Headnote:Arbitration and Conciliation Act, 1996 - Section 11 — Partnership Act, Section 69 — Rejection of application for appointment of arbitrator on the ground of dispute pertaining to unregistered partnership firm — Writ petition challenging the order — Section 69(3) providing an exception to the partner of unregistered partnership to sue for accounts of realization of property of dissolved firm — Impugned order set aside and retired District and Sessions Judge appointed as arbitrator.

Vijender Jain, J.

( 1 ) THIS petition has been filed to challenge the impugned order passed by the learned Additional District Judge dismissing the petitioner s application under section 11 of the Arbitration and Conciliation Act, 1996. The ground of rejection of the application for non-supply of the vacancy of an arbitrator was that the firm of which the husband of the respondent and petitioner were partners, was an unregistered firm. Therefore, it was held by the learned Additional District Judge that in view of the disability envisaged under Section 69 of Partnership Act, the petitioner could not maintain an application under Section 11 of the Arbitration and Conciliation act.

( 2 ) AS a preliminary objection, learned counsel for the respondent has submitted that the remedy of writ petition is not available to the petitioner. We see no force in the objection of the learned counsel. In Konkan Railways Corporation Ltd. Vs. Mehul Construction Co. (2000) 7 SCC 201, the Supreme Court of India has opined that order passed by a designated authority to appoint arbitrator is an administrative order.

( 3 ) SINCE no appeal would lie as there is no adjudicatory order passed by the designated authority while exercising jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996, therefore, the only remedy available would be to file a writ petition under Articles 226/227 of the Constitution of India.

( 4 ) WE have perused the order passed by the trial court placing reliance on a judgment of learned Single Judge of this Court in Om Prakash Vs. Usha Rani and Ors. 96 (2002) DLT 35. It was held that non-registration of the firm was a bar for maintaining an application under Section 11 of the Arbitration and Conciliation Act. Learned counsel appearing for the petitioner has contended that against the decision in the case of Usha Rani (supra) decided by the learned Single Judge, an appeal (FAO 556/2001) was preferred and by an order dated 12th August, 2002, the said judgment of Usha Rani s case (supra) was set aside by the Division Bench of this court.

( 5 ) ON the other hand, learned counsel for the respondent has contended that the petition is not maintainable. In support of his contention he has relied upon a judgment of Supreme Court in the case of U. P. State Sugar Corpn. Ltd. Vs. Jain construction Co. and Anr. 2004 (4) CCC 51.

( 6 ) WE have given our careful consideration to the arguments advanced by learned counsel for both the parties. A learned Single Judge of this Court in Usha rani s case took the following view :-

" Once it is taken that it was a suit that has to be filed under Section 20 of the Arbitration Act the necessary corollary and the finding would be that strict provisions of Section 69 of the Partnership Act would always come into play. When a partner has to enforce the right against the other arising out of the contract which had been reduced into writing necessarily these is no option for the Court but to state that the partnership should have been registered before any such application under section 20 of the Arbitration Act would be maintainable. Once such an application is not maintainable, the petitioner had no option except, but to file the suit for rendition of accounts and dissolution of partnership. In that view of the matter the word "other proceedings to enforce a right" would include the application/suit that has to be filed. Application under Section 20 of the Arbitration Act would not be maintainable. "

( 7 ) IN the appeal that judgment was set aside in view of the decision of the supreme Court in Prabhu Shankar Jaiswal Vs. Sheo Narain Jaiswal and ors. (1996) 11 scc 225. Section 69 of the Partnership Act is as follows :

" 69. Effect of non-registration - (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner i






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