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2025 Supreme(Ker) 3071

IN THE HIGH COURT OF KERALA AT ERNAKULAM
S. MANU, J.
Sajid Pasha S/o Musthafa Kamal Pasha – Appellant
Versus
Abdunnasir P. S/o Aboobakkar P. – Respondent
A.R. No. 8 of 2025
Decided On : 12-12-2025

Advocates Appeared:
For the Appellants : M.A. Vaheeda Babu, Babu Karukapadath, P.K. Abdul Rahiman, Karukapadath Wazim Babu, P. Lakshmi, Aysha E.M., Abuasil A.K., Haniya Nafeeza V.S., Hashim K.M.
For the Respondents: Vijay V. Paul, Anil Sebastian Pulickel, Ajay V. Anand, Shilpa Soman, Rojit Zachariah, Angela Elsa John, Safal P. Salim, Hamed Abdulla Javahir, A.K. Muhammed Hashim, Thwalhath V., Arun Thomas, Veena Raveendran, Karthika Maria, Shinto Mathew Abraham, Leah Rachel Ninan, Mathew Nevin Thomas, Karthik Rajagopal, Kurian Antony Mathew, Noel Ninan Ninan, Adeen Nazar, Arun Joseph Mathew, Aparnna S.

A request for arbitration must clearly detail the particular dispute to satisfy Section 21 of the Arbitration and Conciliation Act, 1996, triggering the commencement of proceedings and the calculation of limitation.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 21 and 11 - Request for arbitration - The applicants invoked arbitration regarding disputes arising from partnership deeds but failed to provide clear particulars of the disputes in their request, rendering it invalid under Section 21. The court highlighted that notice invoking arbitration must detail the particular dispute and is necessary for computing the limitation period. The communication submitted lacked clarity and specificity, failing to fulfill the requirements mandated by law. (Paras 13, 19, 28)

Facts of the case:
The dispute arose from a partnership between the applicants and respondents, where disagreements over profit sharing, management, and request for audit occurred. Despite meetings and discussions, no resolution was achieved, prompting applicants to seek arbitration under the Arbitration and Conciliation Act.

Findings of Court:
The court found that the request for arbitration by the applicants was improperly framed and lacked necessary details, and therefore failed to initiate valid arbitral proceedings as stipulated by statute.

Issues: Whether the communication sent by the applicants constituted a valid notice under Section 21 of the Arbitration and Conciliation Act.

Ratio Decidendi: The court emphasized the significance of clarity in the request for arbitration. The absence of specific mention of the dispute in the communication disqualified it as a proper notice under Section 21, essential for determining the arbitration start date and limitation period.

Result: Arbitration request is rejected.

Table of Content
1. formation and management of partnership business. (Para 1 , 2 , 3 , 4)
2. disputes regarding accounts and arbitration position. (Para 5 , 6)
3. respondents' objections and counterarguments. (Para 7)
4. hearing of legal representatives. (Para 8)
5. arguments presented by the applicants and respondents on arbitration. (Para 9 , 10 , 11)
6. importance and legal interpretation of section 21 of the act. (Para 12 , 13 , 14 , 15)
7. judicial interpretation of disputes related to arbitration. (Para 16 , 17 , 18)
8. notice under section 21 and its requirements. (Para 19 , 20 , 21)
9. failure of the notice under section 21 and resulting consequences. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28)
10. conclusion of the court refusing arbitration due to procedural deficiencies. (Para 29)

ORDER :

1. Under the name and style “M/s. Roofs and Shades” applicants and respondents 1 and 2 formed a partnership firm with equal partnership. The partnership deed was executed on 5.2.2005. A copy of the same has been produced as Annexure-A1. The 1st respondent was the Managing Partner. According to the applicants, he along with the 2nd respondent- his wife, was managing the day-to-day affairs of the firm. Accounts were settled and profit was divided till the financial year 2010-11.

2. Later, another partnership deed was executed between the applicants and respondents 1 and 2 on 6.4.2011 with the name of the partnership as “M/s.Roofs and Shades Structural Solutions”. According to the applicants, the business of “Roofs and Shades” was carried over and continued by “Roofs and Shades Structural Solutions”. Management of the firm continued with the respondents 1 and 2.

3. It is alleged that in October 2019, the 1st applicant demanded the respondents 1 and 2 to provide the books of accounts for verification and for settlement of accounts for the year 2011 and also for sharing the profits from 2011 to 2019. However, respondents 1 and 2 did not provide the books of accounts. On 4.5.2020, there was a joint meeting of the partners at the residence of respondents 1 and 2 and consensus was arrived at regarding settling of accounts and management of the firm. Nevertheless, the commitments made in the meetings were not discharged by the respondents 1 and 2. It is also claimed that the respondents 1 and 2 had agreed to induct the 1st applicant as the managing partner.

4. Thereafter, there arose disputes with regard to sharing of profits. There were several discussions and communications between the parties. Since the issues could not be resolved, applicants, as per e-mail dated 29.9.2023, suggested to nominate a renowned Engineer as the Arbitrator. A printout of the e-mail communication is produced as Annexure-A3. There was no response from the respondents 1 and 2 and the only option left to the applicants was to initiate appropriate proceedings under the Arbitration and Conciliation Act,1996.

5. CMA (Arb.) No.1/2024 was filed under Section 9 of the Arbitration and Conciliation Act,1996 [henceforth mentioned as ‘the Act’ for conciseness] before the Commercial Court, Kozhikode by the applicants for various interim reliefs. Respondents 1 and 2 filed a counter affidavit. They stated in the counter affidavit that on the basis of mutual understanding between the applicants and themselves, they started some other firms and details of the firms were stated in the affidavit. Applicants allege that the partners of those firms are close relatives as well as friends of respondents 1 and 2. Respondents 1 and 2 filed I.A.No.2/2024 questioning the maintainability of CMA and it was dismissed by the Commercial Court by order dated 30.9.2024. Challenging the order passed by the Commercial Court, O.P.(C)No.2338/2024 was filed before this Court and the said case is still pending.

6. According to the applicants, different firms constituted by the respondents 1 and 2 are in fact managed by them and all the firms are constituted for the same purpose of the business of “M/s.Roofs and Shades” w

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