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2018 Supreme(Guj) 1093

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Biren Vaishnav, J.
Shantilal Shivabhai Jadav – Appellant
Vs.
Kaushikbhai Hiralal Siddhiwala – Respondent
Special Civil Application No. 9929 of 2016
Decided On : 04-07-2018

Advocates Appeared:
Maulik R Shah, Adv., Aayog Y Doshi, Adv., Pratik P Thakkar, Adv., Anshul Shah, Adv., S.P. Majmudar, Adv.

Headnote:Arbitration and Conciliation Act, 1996 – Section 8(2) – Rejection of application seeking reference of subject matter of suit to arbitration – A suit in order to be arbitrable should be a suit in respect of a matter which parties have agreed to refer and which comes within ambit of arbitration agreement – In a suit as to a matter which lies outside arbitration agreement and is also between some of parties who are not parties to agreement, there is no question of application of Section 8 of Act – When facts as averred in plaint are seen in context of relief’s claimed against defendants no. 4 and 5 suit is clearly not in respect of a matter which can be referred to arbitration as defendant no. 4 and 5 are not parties to the arbitration agreement – With regard to question of applicability of an arbitration clause to a partnership which is dissolved and whether such an arbitration clause ceases to exist on such resolution need to be answered because dispute involved in suit is a matter not within domain of Arbitrator – Petition dismissed. (Paras 7, 10 and 11)

JUDGMENT

Biren Vaishnav, J.

The present petition, under Article 227 of the Constitution of India, has been filed by the original defendants no. 1 to 3 - petitioners herein. The petitioners have challenged the order below Ex. 23 dated 05.05.2016 passed by the learned Principal Civil Judge, Bharuch in Regular Civil Suit No. 152 of 2015. By the aforesaid order, the application of the petitioners filed under Section 8(2) of the Arbitration and Conciliation Act, 1996 (for short "the Act") praying that the subject matter of the suit be referred to the Arbitrator was rejected.

2. The facts in brief are as under:

2.1 The respondent no. 1 was the original plaintiff who had filed Regular Civil Suit No. 152 of 2015 (Special Civil Suit No. 113 of 2013) before the learned Senior Civil Judge, Bharuch.

It was the case of the plaintiff (respondent no. 1 herein) that he and the petitioners were partners. They were carrying out an enterprise in the name of M/s. Gajanand Enterprise. The partnership was entered into by a partnership deed dated 01.08.1997. The partnership was mainly carrying out the business of dealing in purchase of lands, plotting of such lands, carrying out construction on such plots and selling and/or leasing such constructions. The dispute was regarding a plot of land at Zadeshwar. It was the case of the plaintiff that the partners had purchased the land in the name of the plaintiff and had built "Gajanand Complex" which had shops and godowns. The partners were dealing in selling such shops and godowns as a part of their partnership business.

2.2 It was the case of the plaintiff that he would execute the agreement to sell and the sale deed on behalf of the partnership firm and that the partners - the defendants no. 1 and 2 (petitioners herein ) had no independent right of sale.

It was the case of the plaintiff that the defendant no. 4 who was the mother-in-law of the defendant no. 3 and the mother of defendant no. 2, and therefore being related, had entered into a transaction of sale by a sale deed dated 19.12.2009.

The shops of the Gajanand Complex were fraudulently and without the knowledge of the plaintiff sold by the defendants no. 2 and 3 - the partners to the defendant no. 4. Such bogus transaction of sale were entered into by the partners - defendants no. 2 and 3 because it was they who maintained the accounts of the partnership and had custody of all the documents.

2.3 Since from the year 2010 there was a difference/dispute between the partners with regard to maintenance of accounts, notice was issued by the plaintiff to dissolve the partnership which was a partnership at will. The plaintiff therefore alleged that the sale deed entered into by and between the defendants no. 2 and 3 in favour of defendant no. 4 was entered into by the defendants no. 2 and 3 by virtue of a fraudulent transaction of which the plaintiff was unaware of. Such sale deeds were entered into without his consent. The plaint therefore apart from claiming a right to accounts of the partnership also categorically stated that though the defendant no. 4 was not a partner, he was a necessary party and was joined as it was found that the defendants no. 2 and 3 with a fraudulent intention had alienated the properties in favour of the defendant no. 4. The cause of action had therefore arisen when the plaintiff issued a notice dated 14.09.2010 for dissolution of the partnership which was, according to the plaintiff, a partnership at will.

2.4 The relief’s therefore that the plaintiffs sought were three main relief’s - (I) That the partnership namely M/s. Gajanand Enterprise be dissolved after taking accounts and distributing the profit share in favour of the plaintiff and a decree of dissolution be so passed (II) That the property at Zadeshwar namely Gajanand Complex which had shops and godowns may not be dealt with by the defendants by way of sale, mortgage or rent and that since it was a property of the partnership the defendants be restrained from interfering wi



























































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