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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
M/s. Shyamjee Prepaid Services - Petitioner
Versus
M/s. Top Steels And Mrs. Renu Devi & Anr. – Respondents
ARB.P. No.137 Of 2019, CRL.M.A. No.1480 Of 2021, I.A. No.18203 Of 2019, I.A. No.1618 Of 2020, I.A. No.1619 Of 2020 & I.A. No.6083 Of 2022
Decided On : 18-01-2023
Civil Procedure Code, 1908 – Section 151, 114 – Order XXX, Rule 3 – Arbitration & Conciliation (Amendment) Act, 2015 – Arbitration and Conciliation Act, 1996 – Section 11, 21, 16(1)(a), 40(1) – Indian Partnership Act, 1932 – Section 42 (c), 69(3)(a), 47, 19(2) – Doctrine of Severability – instant review petitions under Section 114 read with Section 151 of the Code of Civil Procedure, 1908 have been filed on behalf of partners of respondent-firm seeking review of order and consequently praying for an order cancelling appointment of Sole Arbitrator vide Order in captioned matter – Held, Admittedly, there is no notice of joint firm’s dissolution. As a result, Court is of view that petitioner firm, which consisted of former partners, has undoubtedly been dissolved by virtue of section 42(c) of Act, 1932 – However, dissolution of petitioner firm shall not have any influence on pending transactions between erstwhile partners of petitioner and respondent firm – Court delivered its order appointing an arbitrator, all parties were present whereby, the respondent/applicant herein failed to express any objections – Court finds no basis to interfere with or reconsider the impugned order appointing Sole Arbitrator, for review – Taking into consideration facts and circumstances as well as discussions that have been presented so far, Court finds that respondent/applicant in the present case failed to establish adequate reasons for reviewing order that was passed – Resultantly, all applications for review are dismissed being devoid of any merit – Disposed of.
JUDGMENT :
[Chandra Dhari Singh, J.]
REVIEW APPLICATION NOS. 529/2019, 53/2020, 54/2020 &1619/2020
1. The instant review petitions under Section 114 read with Section 151 of the Code of Civil Procedure, 1908 have been filed on behalf of the partners of the respondent-firm seeking review of the order dated 2ndSeptember, 2019 and consequently praying for an order cancelling the appointment of Sole Arbitrator vide Order dated 2nd September, 2019 in the captioned matter.
2. Learned counsel for the respondent-firm argued that the petitioner-firm herein did not approach this Court with clean hands & mind and thereby, obtained the order dated 2nd September, 2019 for appointment of the arbitrator in reference to an arbitration clause in the Agency Agreement to which the petitioner firm is not a party. It is argued that the impugned order, dated 2nd September, 2019, clearly demonstrates that petitioners were kept in the dark with respect to appointment of the arbitrator. It is also submitted that the respondents/applicant did not receive any notice in accordance with Section 21 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act, 1996”) invoking the arbitration clause, nor were they added as parties in the aforementioned Arbitration Petition. Upon receiving notification from the Sole Arbitrator, the respondents/applicants learned for the first time of the claims and the Arbitrator appointed.
3. Learned counsel appearing on behalf of respondent-firm/applicant submitted that both the firms, which are the parties to the Agency Agreement containing the arbitration clause, have been dissolved and thus, the petitioner firm herein, being a new firm, lacks legal status and locus standi to invoke the arbitration clause.
Facts of the Case
4. The following are the events that caused the respondent-firm to file the present application for review:
ii. The respondent, a partnership firm, is a manufacturer of hot-rolled steel wires in coils, rods, Thermax bars, M.S. ingots, M.S. billet, and other products utilized in its plant having its registered office at DC-256, Town Samalkha, Ward No.3 Padav Mohalla, Distt Samalkha, Panipat (Haryana)-132101.
iii. The parties executed an agreement dated 27th October, 2014 whereby the petitioner was appointed to be the respondent’s agent in the State of Haryana to market the products that are hot Rolled steel wires in coils, rods/thermax bars/M.S. ingot/M.S. billet etc. in accordance with the said agreement.
iv. According to the terms and conditions of the signed agreement dated 27th October, 2014, it was agreed that the petitioner firm would provide the material to the respondent firm, so that they may sell and dispose of the petitioner's goods for the highest profit. Additionally, it was agreed that the respondent would deliver the unsold products and commodities to the petitioner prior to the agreement's expiration or cancellation. It was further agreed that the statement of account would be periodically reconciled by both parties.
v. According to clause 11 of the agreement dated 27th October 2014, the respondent was required to pay a commission of Rs. 50/- per metric tonne on the sale of hot rolled steel wire rods, thermax bars, M.S. ingots, M.S. billets, etc. It was also agreed that the respondent was not permitted to make purchases for and on behalf of the petitioner or to pledge the firm's credit in any other way under clause 12 of the agreement. It was also agreed that the respondent would not sell the petitioner business's goods and commodities, nor would it make any claims or provide any guarantees that were not included in the terms and conditions that the petition
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