IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Aravind Kumar, J.
Dipakkumar Nathabhai Patel – Petitioner
Versus
Narmadaben Dhirajlal Radadia – Respondent
Petn. Under Arbitration Act No. 173 of 2018
Decided On : 05-08-2022
Civil Procedure Code, 1908 – Order VII Rule 11 – Arbitration and Conciliation Act, 1996 – Section 11(6), 43(1), 21 – Limitation Act, 1963 – Partnership Act, 1932 – Section 59 – Court proceedings – Declaration and permanent injunction – Petition is filed under section 11(6) of Arbitration and Conciliation Act, 1996 seeking appointment of Arbitrator contending inter alia that petitioner and respondents had entered into a partnership agreement and one of partner namely was relieved from partnership and thereafter a new partnership agreement came to be executed under which petitioner – Held, Even according to petitioner, cause of action arose on his alleged removal way back and instead of taking recourse to invoke arbitration clause and seek for settlement of his claim immediately thereafter assuming he had a right to do so, he resorted to file Civil Suit and even after first order came to be passed in Regular Cisil Suit if being construed as date on which petitioner had cause of action for filing an application under section 11(6) for appointment of an Arbitrator, he did not choose to do so and said cause of action to sue had stood extinguished on expiry of three years period even if it had commenced and as such by present application filed under section 11(6) of the Act, petitioner cannot be allowed to urge his claim on basis of a dead cause of action or revive claim which is barred by Law of Limitation namely not raising it within three years from date cause of action arose – Ordered Accordingly.
JUDGMENT :
1. This petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short) seeking appointment of Arbitrator contending inter alia that petitioner and respondents had entered into a partnership agreement on 02.03.1994 and one of the partner namely Rameshbhai Ishwarbhai Patel was relieved from the partnership and thereafter a new partnership agreement came to be executed on 01.07.1998 under which the petitioner - applicant and the respondent Nos. 1 to 3 became partners of the firm under which the applicant has been given 25% of the share. It is further contended that on account of certain disputes having arisen between applicant and respondents, the applicant had filed a Regular Civil Suit No. 486 of 2005 before Civil Judge (Senior Division), Vadodara as well as Regular Civil Suit No. 409 of 2006 and Regular Civil Suit No. 746 of 2007 for various reliefs, which came to be disposed of on the ground that deed of partnership contained arbitration clause. Hence, it is stated that on disposal of suits, applicant had got issued notices to the respondents calling upon the respondents to give their consent for appointment of sole arbitrator, to which the respondent No. 1 objected. Respondent No. 3 did not object and no reply is issued by respondent No. 2. Hence, applicant has sought for appointment of an arbitrator.
2. On notice being issued, respondent No. 1 appeared and filed affidavit-in-reply denying the averments made in the petition except to the extent expressly admitted thereunder. It is stated that "Aadarsh Pharmacy and General" was an unregistered firm and was reconstituted by partnership deed dated 01.07.1998, whereunder it was agreed that partnership was determinable at Will. It is also stated that said partnership was dissolved in the year 2005 after meeting came to be held on 09.05.2005, wherein it was agreed by the partners that petitioner would be removed from the firm and consequently dissolved the firm. It is contended that in furtherance of the meeting, minutes came to be drawn and respondent Nos. 2 and 3 executed a dissolution deed dated 16.05.2005 and even on request being made, petitioner did not affix his signature to the said dissolution deed and as such respondent No. 1 is said to have intimated the applicant on 16.05.2005 about his removal from the Firm and consequently dissolution of the firm. It is further contended that in the suits which came to be filed, the respondent No. 1 had filed an application under section 8 of the Act which came to be allowed and suit came to be disposed of vide order dated 08.03.2007. It is contended that thereafter petitioner filed third suit being Regular Civil Suit No. 764 of 2007, which came to be disposed of vide order dated 10.06.2013. Hence, contending that claim of the petitioner is hopelessly barred by limitation and by attempting to revive the dead cause of action, the present application has been filed. Hence, 1st respondent has prayed for dismissal of this application.
3. Heard Shri Jigar Gadhvi, learned advocate appearing for petitioner and Shri Dipen Shah, learned advocate appearing for respondents. Perused the records.
4. Undisputedly, it emerges from the available records that partnership deed entered into between the parties on 01.07.1998 was an unregistered firm. The said partnership firm was not registered as required under section 59 of the Partnership Act. The said partnership deed provided for an arbitration clause. The dispute which arose between the petitioner / applicant on one hand and first respondent on the other hand namely the petitioner who claims to have been illegally removed from the partnership firm. Whereas respondent No. 1 has contended that a meeting was held on 09.05.2005 wherein all the partners of the firm participated and it was resolved to remove the petitioner as partner of the firm and it was also resolved thereunder to dissolve the firm. The petitioner is said to
The main legal point established in the judgment is that the dispute amongst the partners regarding the dealings of the firm could be referred to arbitration as per the partnership deed, but once the....
The main legal point established is the court's authority to appoint an Arbitrator when an Arbitration Agreement is invoked, and the need for detailed examination of the effect of new agreements on t....
The court held that an arbitration clause in a partnership deed survives the death of a partner, allowing the arbitration of disputes related to the partnership's operations.
Claims withdrawn do not reset the limitation period; the original cause of action's date governs the timeliness of arbitration requests.
The main legal point established in the judgment is that the limitation period for filing an application seeking appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation A....
The court reinforced the principle that arbitration agreements must be enforced and that jurisdictional issues regarding non-signatories should be resolved by arbitral tribunals, aligning with preced....
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