Disputes involving serious allegations of fraud and malpractices should be tried and decided by a civil court, not through arbitration proceedings.

Manmohan Singh, J.

1. By this order, I propose to decide two petitions filed by the petitioners. The same are:

(a) Arb. P. No.455/2012 under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) for appointment of sole Arbitrator against the illegal acts of diverting the funds, investments of the partnership firm without authority etc. by the respondent Nos.1 & 2.

(b) OMP No.748/2012 filed under Section 9 of the Act for granting of various interim reliefs.

2. Learned counsel appearing on behalf of both parties have made their submissions in Arb. P. No.455/2012. Mr. Tikku, learned Senior advocate submits that incase prayer for appointment of sole Arbitrator is allowed, his clients may not press OMP at this stage as the petitioners would be moving the petition for interim protection before Arbitral Tribunal. The submissions of Mr. Anil Sapra, learned Senior advocate for respondents is that both the petitions filed by the petitioners are not maintainable.

3. Brief facts as per both petitions are :

(i) The three petitioners and respondent Nos. 1 and 2 are holding 20% share each of respondent No. 3 i.e. M/s SKN Energy, an unregistered partnership firm (hereinafter referred to as ‘the firm’). The said firm had been holding 31% shares of the M/s Haryana City Gas Distribution Limited (herein referred to as “the company”) who is in the business of distribution of gas in the industrial and residential premises. All five partners are also promoters and directors of the company.

(ii) The firm was created by way of execution of a partnership deed between the parties to the dispute who are joint family members but also partners of various joint business and cross holding in the group of companies headed by the different persons severally and jointly.

(iii) The object of the partnership firm as per partnership deed was to acquire the right from the various gas distribution companies for appointment of the operator for running of the CNG Pump Stations and to get the commission per kilo from the gas distribution company on the total gas sold from the CNG Station.

(iv) The capital of the firm was initially fixed at Rs. 50,000/- as per clause 5 of the partnership deed which was to be contributed by the partners of the firm in their profit sharing ratio i.e in equal ratio but due to the huge amount of the deposit under tripartite agreement received, invested in the company by the firm against which the shares were allotted to the firm it all came down to be 20% profit sharing ratio for each partner as per clause 6(b) of the partnership deed.

(v) The firm invested the money in the company which was incorporated vide incorporation certificate dated 27th March, 2000 under the Companies Act,1956 having total authorized shares capital of Rs.30,00,00,000/- divided into 3,00,00,000/- @ Rs. 10/- each, engaged in the main business of natural gas distribution divided into two segments PNG & CNG.

(vi) The petitioners are the promoters/first directors of the said gas company which is not a listed company but a closely held company under the family business by the popular trade name SKN Bentex Group. The petitioners submit that the petitioner No.1 holds 104,31,853 equity shares in the company due to their hard work, devotion, dedication and created enviable social reputation. They diligently carried out the functions in the capacity of the director of the company and took the responsibility of corporate planning, bringing money in the company from time to time to deal all the matters related with the franchisee.

(vii) The firm holds 77 lacs shares in the company i.e 31% of the total equity which is the main subject matter of the dispute among the partners.

4. The petitioners allege that various properties were purchased by the joint and collective efforts of the three sons of late Shri Kundan Lal Chopra i.e Shri Satish Chopra, Shri Kapil Chopra and late Shri Nishit Chopra and various companies,