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2012 Supreme(Guj) 67

2012 (2) GCD 1121 (Guj)
Hon’ble Ms. Justice Sonia Gokani
Rupal Textile & Partners of Partnership Firm Madhubhai G. & Anr.
Versus
Partners of Partnership Firm M/s. Rupal Textile Mahendra H. & Anr.
Special Civil Application No. 11605 of 2011—Decided on 08/02/2012

Advocates:
Appearance :
Mr. M.G. Nagarkar, for the Petitioner Nos. 1 - 2.
Mr. Dhirendra Mehta, for the Respondent Nos. 1 - 2.
Mr. Shaivang D. Mehta, for the Respondent Nos. 1 - 2.

Point in Issue :
Whether without accompaniying partnership agreement application under Section 8 of the Act maintainable.

Headnote:Head Note :

       Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 8 and 8(2) — Application under — Claiming bar of suit in view of specific condition in partnership agreement — Partnership deed not accompanied the application — Dismissal of application — Validity — Finding of — Court held than partnership deed was the basis of the suit preferred by respondent plaintiff seeking injunction and other rights and same are not disputed by either side — The partnership agreement is already produced by plaintiff and it is farming part of the record — Again said agreement is produced by defendant subsequently before the Court — Simply non-production of partnership agreement with the application under Section 8 can not be held to have taken away right of party to claim bar of suit on account of specific clause in agreement — Court set aside the impugned order of lower Court and directing it to proceed to adjudicate the matter.

       Held :

       It would be necessary to reiterate that the partnership document containing the clause of Arbitration of course was not accompanying the application of the petitioner defendants moved under Section 8 of the Arbitration Act. However, this deed was the basis of the suit preferred by the respondent -plaintiff seeking injunction and other rights concerning the affairs and matters of partnership and the same was not disputed by either side Defendants -petitioners herein produced the same at a later date and interpreting that move as a breach to the mandate of Section 8 of the said Act. Court of Sr. Civil Judge dismissed the said application. [Para 13]

       Again, when such an agreement is produced subsequently before the Court, that simply cannot take away the right of the party of reference by adopting this kind of approach keeping in view the object and spirit of the provision. [Para 15]

       Law Laid Down :

       Objection regarding the non-filing of the original or the certified copy of the arbitration agreement with application under Section 8 of the Act itself do not appear to be tenable.

       

Judgment

Ms. Sonia Gokani, J.—The present petition is preferred by the original defendant challenging the order of the learned Principal Senior Civil Judge, Surat passed in Special Civil Suit No. 3 of 2011 against the petitioners-defendants in a suit for declaration and permanent injunction preferred by the respondents herein to restrain the petitioner from transferring the properties belonging to the partnership firm and for such other reliefs.

2. Petitioners-defendants made an application at exhibit 15 before the Court on 20th January, 2011, inter alia contending that the suit is barred by Section 8 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as “the Act”), for there being specific condition in the partnership deed for referring the disputes concerning the affairs and matters of partnership firm to the Arbitrator to be appointed by the partners of the firm and for such appointment, Court was not to be approached. In this circumstance, petitioner herein (original defendant) requested the Court to stay the said suit of the plaintiffs-respondents based on the partnership agreement for getting its share along with interest and to issue the direction to resolve the dispute through the Arbitrator. It is say of the petitioner that plaintiffs themselves have produced the copy of the partnership agreement along with the suit and relied upon the same for basing its claim However, the petitioners (original defendants) did not produce the copy along with such application-(Exhibit 15) under Section 8 of the said Act.

3. Learned senior Civil Judge after a detailed hearing on both the sides on the ground that the application was not accompanied by the partnership deed, which is otherwise mandatory under the provision of Section 8 of the Act, dismissed the said application of the petitioner . The impugned order is challenged in this petition raising various grounds as enumerated in the petition.

4. Learned advocate Shri. M.G. Nagarkar appearing for the petitioners assailed the order impugned by firstly distinguishing the decision of the Apex Court passed in case of Atul Singh & Ors. vs. Sunil Kumar & Ors., reported in AIR 2008 SC 1016 as the same is made the basis for insisting on the partnership deed along with the application under Section 8 of the Act. He urged that the facts in this case of Atul Sing is completely different where the very document referring the clause of Arbitration was disputed whereas in the instant case, respondents-original plaintiffs themselves have based their suit and depended on such partnership deed which was already forming the part of very record of the Court. He substantiated his submissions by citing the decision of Madras High Court rendered in case of Cash & Gain Finance & Investment Ltd. vs. Manjula Udaya Shankar, reported in (2009)1 Arbitration Law Reporter 576. It is emphasized that in the said judgment Atul Sing’s case (Supra) had been referred to and distinguished by the Madras High Court.

4.1 Learned advocate also relied on the judgement of Kerala High Court in case of Natarajan vs. General Manager, Southern Railway, 2006(4) Arb.LR 149(Kerala), where the Kerala High Court has discussed the purpose of production of arbitration agreement or copy thereof along with application and emphasized that what is required to keep in mind is the purpose of such production. It also interpreted the word “accompanied” as used in Section 8(2) of the Act.

4.2 Based on this judgement, it is urged that the order of the Trial Court in interpreting Section 8(2) is completely erroneous and further urged to set-aside the order impugned.

4.3 Yet another judgement sought to be relied upon by learned advocate is the case of NIIT Ltd. vs. Manoharan, reported in 2006(1) Arb. LR 69 (Kerala) where the plaintiff had produced the arbitration agreement before the Court and relied upon the said agreement. In such circumstances, Court held that the requirement of Section 8(2) was essentially fulfilled by such pr
































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