Vipin Sanghi, J. (Oral)

1. This petition has been preferred under Section 11 of the Arbitration and Conciliation Act, 1996 (the Act) to seek the appointment of an arbitrator. The parties, admittedly, entered into a partnership deed dated 01.02.2008. The said partnership was, however, unregistered. This partnership deed contains the following arbitration clause:

"15. Any controversy or claim arising out of or relating to the contract or breach thereof shall be settled by arbitration under the Arbitration Act then in force. The decision given there under shall be binding on all the parties."

2. The petitioner, who is one of the partners and the father of respondent No. 1 and also related to the other respondents, submits that the partnership firm has been working under the name and style of M/s The Punjab Steel Works., which is engaged in the business of manufacturing, forging and sale of iron and steel goods. The share of the various partners in the profits and losses of the firm have been clearly set out in the partnership deed. It is stated that the accounts of the partnership firm were being maintained with Bank of India, but in the year 2006 one more account with ICICI Bank, Rajouri Garden, New Delhi, was opened in the name of the firm. The petitioner states that earlier he was primarily looking after the day-to-day affairs of the firm, but with age catching up, he could not undertake the day-to-day decision making for running of the business of the firm, and the responsibility of running the firm was shouldered by his son Kamal Kishore Manchanda, i.e. respondent No. 1. Presently, it is the respondent No. 1, who is looking after the business of the firm.

3. The grievance of the petitioner is that respondent No. 1 is mismanaging the affairs of the firm. He has opened another bank account with the name of the firm. Incomes of the firm are being diverted to the said account opened by, and being operated by respondent No. 1 alone. Due to the alleged aforesaid conduct of respondent No. 1, disputes have arisen between the parties. In this background, the petitioner seeks appointment of an arbitrator as, it is contended, despite the notice dated 28.07.2009 invoking the arbitration agreement, the parties have not been able to agree on any person to act as an arbitrator.

4. Upon notice being issued, the respondents put in appearance and filed their reply. The petition is contested by respondent No. 1 alone. Learned counsel for the other respondents Mr. Rajeev Sharma submits that the dispute is primarily between the petitioner and respondent No. 1 i.e. the father and son and they do not have much concern with the said dispute.

5. Since there is no denial that the partnership deed was executed between the parties, the existence of the arbitration agreement is not really in dispute. The existence of the disputes in relation to and arising out of the partnership deed between petitioner and respondent No. 1, in the light of the allegations made in the petition and the reply filed thereto, also cannot be doubted. I, therefore, proceed to record the objections of respondent No. 1, before I record the submissions of the petitioner.

6. Respondent No. 1 has raised two submissions to oppose the appointment of the arbitrator by the Court. The first submission of Mr. B. Mohan, learned counsel for respondent No. 1 is that the partnership firm, being an unregistered firm, the present petition is not maintainable to seek the dissolution of the firm in the light of the provision contained in Section 69 of the Partnership Act. In this regard, he places strong reliance on the decisions of the Supreme Court in Krishna Motor Service by its partners v. H.B. Vittala Kamath, (1996) 10 SCC 88. The second submission is that the petitioner has made serious allegations of fraud, misappropriation and even alleged criminal conduct on the part of the respondent No. 1. Such allegations of fraud or other criminal conduct cannot be adjudicated upon in arbitration proceedin