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IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
Vivek Singh Thakur, J.
Rajesh Kumar Rao & another - Appellants
Versus
Ravinder Kumar Gupta - Respondent
Arbitration Appeal No. 12 of 2020
Decided On : 12-01-2023
Arbitration and Conciliation Act, 1996 – Section 8(1) – Instant Arbitration Appeal has been preferred by appellants against order, passed by Senior Civil Judge, , whereby application preferred by appellants under Section 8(1) of Arbitration and Conciliation Act, 1996, praying for referring dispute to Arbitrator has been dismissed, on ground that dispute in reference in Civil Suit does not fall within purview of Clauses of Deed of Partnership executed between appellant No.1 and respondent and, Arbitration Clause of Deed of Partnership was not applicable in case in hand – Agreements to Sell entered between parties were result of coercion and connivance of appellants to pressurize respondent to sell his share. [Para 15]
Finding of the Court: Court have gone through entire record as well as case law cited by parties – Dispute between parties is with respect to Agreement to Sell pertaining to half share a partner and according to Clause 10 of Partnership Deed, a partner, intending to sell his share, was bound to sell his share in favour of remaining partners and, an Agreement to Sell entered between parties is in furtherance to Clause 10 of Partnership Deed and dispute arising between parties is related to Clause 10 of Partnership Deed – Therefore, Arbitration Clause of Partnership Deed covers dispute related to selling of half share by partner to remaining partner. Therefore, keeping in view provisions of Section 8 of Arbitration Act, Civil Court had no other option but to refer matter to Arbitrator in terms of Arbitration Clause and thus, Senior Civil Judge has committed an error by dismissing application filed by appellants to refer dispute for arbitration.
Result: Appeal disposed of.
JUDGMENT :
Vivek Singh Thakur, J.
Instant Arbitration Appeal has been preferred by appellants against order dated 23.11.2020, passed by Senior Civil Judge, Lahaul & Spiti at Kullu in CMA No. 145-VI/2020 in Case No. 25/2020, titled Ravinder Kumar vs. Rajesh Kumar Rao and another, whereby application preferred by appellants under Section 8(1) of Arbitration and Conciliation Act, 1996 (hereinafter referred as the “Act”), praying for referring the dispute to Arbitrator has been dismissed, on the ground that dispute in reference in Civil Suit does not fall within the purview of Clauses of Deed of Partnership dated 17.4.2014 executed between appellant No.1 and respondent and, therefore, Arbitration Clause of Deed of Partnership was not applicable in the case in hand.
2. Undisputed facts, in present case, are that on 17.4.2014, a Deed of Partnership was entered between Ravinder Kumar respondent and Rajesh Kumar (appellant No.1) to run a Crusher namely M/s Bhawani Stone Crusher in partnership and to use the stone extracted from land referred in Partnership Deed, in partnership business. The land comprised in Khasra Nos. 844 and 845, referred in agreement, whereupon Crusher had already been installed by previous owner Daulat Ram, is in joint ownership and possession of Ravinder Kumar and Rajesh Kumar in equal shares. Land measuring 5-8-0 bighas has been taken on lease by Ravinder Kumar for extraction of stones and stones extracted therefrom were agreed to be used only in M/s Bhawani Stone Crusher with condition that profit of stone extracted shall be distributed between both partners in equal shares. Apart from other terms and conditions, there was Arbitration Clause No. 9 which reads as under:-
3. Clause 10 of Partnership Deed is also relevant for adjudication of present matter, which reads as under :-
4. It is the case of appellants that vide Agreement dated 20.9.2020, respondent Ravinder Kumar Gupta had sold movable and immovable property of Stone Crusher along with land comprised in Khasra Nos. 844 and 845 measuring 54 biswas to its partner Rajesh Kumar Rao for consideration of Rs.1.50 crore and Rs.70 lacs was agreed to be paid by 10.10.2020 and balance amount of Rs.75 lacs was to be paid within two months, and partners, i.e. Ravinder Kumar Gupta and Rajesh Kumar Rao, had also agreed to close the limit by depositing amount payable for that in equal shares. It was agreed that any liability or right, as existing on 20.9.2020, was to be shared by both partners equally whereas from 21.9.2020 Crusher was to be run by Rajesh Kumar Rao with all rights and liabilities of Crusher thereafter. Appellant No.2 Abhimanu Gorsi, who is son of Rajesh Kumar Rao, is one of the witnesses to this agreement.
5. It is also an admitted fact that another Agreement dated 24.3.2021 was executed between parties i.e. Ravinder Kumar and Rajesh Kumar Rao, in continuation of previous agreement dated 20.9.2020, wherein it was recorded that petitioner has paid Rs.10 lacs vide cheque dated 21.9.2020, Rs.65 lacs vide cheque dated 22.9.2020 and Rs.75 lacs vide cheque dated 5.4.2021 to Ravinder Kumar Gupta and Ravinder Kumar Gupta had agreed to pay his share of 50% in CC Limit and in FITL Loan of M/s Bhawani Stone Crusher by depositing the same in accounts maintained in SBI Bhuntar Branch and Ravinder Kumar had agreed to execute the sale deed in favour of Rajesh Kumar Rao on or before 10.5.2021.
6. Later on, it has been claimed that amount of
Clause 10 provides that in case any partner intends to leave partnership business then it would be incumbent upon him to sell his share in favour of remaining partners and leaving partner shall not h....
Legal heirs of a deceased partner are bound by the arbitration clause in the partnership deed, allowing disputes to be referred to arbitration despite the death of a partner.
The mere existence of an arbitration clause does not automatically oust the jurisdiction of civil courts unless explicitly stated in law.
Dissolution of partnership - Non-compliance of Clause 18 of Partnership Deed - Absence of any embargo to refer post dissolution dispute to Arbitrator, it is not possible to accept that Arbitration cl....
The main legal point established in the judgment is that the fulfillment of conditions for retirement from a partnership and the requirement of stamp duty under the Stamp Act, 1899 are crucial factor....
The appointment of an arbitrator is invalid if the partnership deed is not duly stamped and jurisdiction lies where the immovable property is situated.
The court established that parties must adhere to arbitration as per the arbitration clause in the Partnership Deed, affirming the arbitrator's jurisdiction over disputes arising from the partnership....
Partnership disputes can be referred to arbitration in accordance with the provisions of the Partnership Deed.
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