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IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
GOLDEN CHARIOT RECREATIONS PVT.LTD. - Petitioner
Versus
MUKESH PANIKA & ANR. - Respondents
ARB.P. 143 of 2018 & IA No.3336-3337 of 2018
Decided on : 23-07-2018
Arbitration - Partnership Dispute - Arbitration and Conciliation Act, 1996, Section 11 - 13, 43(1) - The court dismissed the petition under Section 11 of the Arbitration and Conciliation Act, 1996, as it was barred by limitation.
Fact of the Case:
The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an independent arbitrator to adjudicate disputes arising from a partnership dispute. The petitioner claimed to be a constituent partner of a partnership firm and invoked an arbitration clause contained in the Supplementary Deed of Partnership. The respondents denied the existence of the partnership deed and the arbitration agreement.
Finding of the Court:
The court found that the present application was barred by the provisions of the Limitation Act, 1963, as it was filed more than three years after the disputes were crystallized and the petitioner had invoked the arbitration clause. The court dismissed the petition and all pending applications.
Issues: The principal controversy addressed was whether the present application was barred by limitation. The court also considered the existence of the partnership deed and the arbitration agreement, as well as the disputes raised by the parties.
Ratio Decidendi: The court held that the petitioner was required to file the application within three years from the expiry of 30 days of its initial notice invoking the arbitration clause. The court emphasized that disputes were crystallized when the respondents unequivocally denied the existence of the partnership deed and the arbitration agreement, and there was no requirement for the petitioner to issue a fresh notice for resolution of the disputes.
Final Decision: The court dismissed the petition under Section 11 of the Arbitration and Conciliation Act, 1996, as it was barred by limitation. All pending applications were also disposed of.
VIBHU BAKHRU, J
1. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’), inter alia, praying that an independent arbitrator be appointed to adjudicate the disputes between the parties. The petitioner relies on an arbitration clause as contained in the Supplementary Deed of Partnership dated 09.07.2012.
2. The petitioner claims to be a constituent partner of a partnership firm named Integration 2020 Developers (hereafter ‘the Firm’). It is claimed that the petitioner owns a 50% stake in the Firm and its assets including the property bearing Municipal No.H-5/6 to H-5/10, Municipal Ward No.1, opposite Qutub Minar, Mehrauli, New Delhi with adjoining land admeasuring 1038 square yards. The said property is located opposite Qutub Minar and is popularly known as ‘Qutub Colonnade’ (hereafter ‘the property’).
3. The petitioner claims that respondent no.2 is a company, which holds the remaining 50% stake in the Firm. Respondent no. 2 – M/s Furthering Arts Private Limited (hereafter ‘FAPL’) is in turn held and controlled by respondent no.1 (hereafter ‘Mukesh’).
4. The petitioner claims that on 29.11.1994, a firm was constituted by Mr Georges Mailhot and his wife Bina K. Ramani. The Firm (known as ‘Integration 2020 Developers’) purchased the property (Qutub Colonnade) by an Agreement to Sell dated 02.03.1995 executed by the owners of the property, namely, Amar Nath and Dewan Chand. The said owners also executed a Power of Attorney and affidavits in favour of the Firm. It is stated that the property was duly mutated in the records of the Municipal Corporation of Delhi in the name of the Firm.
5. The original Partnership Deed dated 29.11.1994 was entered into between Mr Georges Mailhot and Ms Bina K. Ramani and was modified by the partners on 23.07.2005 and the Firm was duly registered with the Registrar of Firms, Government of NCT of Delhi. On 20.05.2010, the Partnership Deed dated 29.11.1994 (as amended on 23.07.2005) was further amended and the name of the Firm was changed from Integration 2020 to Integration 2020 Developers (‘the Firm’).
6. The petitioner claims that sometime in the month of May, 2012, Mukesh approached the petitioner and expressed his interest to acquire the entire stake of the partners in the Firm. It is claimed that Mukesh was interested in opening an art club/art gallery and required the property owned by the Firm for the said purpose.
7. The petitioner claims that they entered into a Loan Agreement with the respondents on 04.06.2012, whereby the petitioner agreed to give a loan of Rs.5 crores to each of the respondents. It is stated that on the same date, that is, on 04.06.2012, Mr Georges Mailhot and Ms Bina K. Ramani sold half of their respective shares to the respondents. Consequently, Mukesh and FAPL were inducted as partners in the Firm holding 25% stake each. It is claimed that, thereafter, the original partners (Mr Georges Mailhot and Ms Bina K. Ramani) retired from the Firm and entered into a Supplementary Partnership Deed.
8. Thereafter, on 11.06.2012, Mukesh offered 50% stake in the Firm to the petitioner and the petitioner paid another sum of Rs.9.5 crores to the respondents (Rs.5 crores on 14.06.2012 to FAPL and Rs.4.5 crores on 19.06.2012 to Mukesh).
9. It is claimed that on 20.06.2012, the respondents paid Mr Georges Mailhot and Ms Bina K. Ramani a sum of Rs.10 crores and they deposited the original title deeds with the respondents. The petitioner claims that these Deeds were deposited with the petitioner by Mukesh.
10. On 09.07.2012, the petitioner entered into a Supplementary Deed of Partnership, whereby FAPL transferred its entire share in the Firm to the petitioner against a receipt of Rs.10 crores. Consequently, both Mukesh and the petitioner now held 50% stake in the said company.
11. The Supplementary Partnership Deed dated 09.07.2012 includes an arbitration clause, which is set out below:-
“13. In the event of any disp
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