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2022 Supreme(Jhk) 789

IN THE HIGH COURT OF JHARKHAND AT RANCHI
Sujit Narayan Prasad, J.
Anju Devi and ors. - Petitioners
Versus
Bipin Bihari, son of Lakhit Ram Mahto and ors. – Respondents
A.Appl. No. 29 of 2022
Decided On : 24-11-2022

Advocates:
Advocate Appeared:
For the Petitioner:Mrs. Debolina Sen Hirani, Advocate

The main legal point established is that if a contract contains an arbitration clause and the Arbitrator has not been appointed, the High Court is required to appoint an Arbitrator for resolution of the dispute.

Headnote:

Arbitration - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Clause 20 and 23 of Partnership Deeds

Fact of the Case:

The application was filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for adjudication of a dispute arising from partnership agreements. Despite valid service of notices, the respondents did not appear, leading the court to proceed with the matter.

Finding of the Court:

The court found that the partnership deeds contained arbitration clauses (Clause 20 and 23) for resolution of disputes by appointing an Arbitrator, and the respondents had not taken steps for appointment of an Arbitrator by mutual agreement. The court held that if a contract contains an arbitration clause and the Arbitrator has not been appointed, the High Court, in this case, is required to appoint an Arbitrator for resolution of the dispute.

Issues: The issues involved the validity of the application under Section 11(6) of the Arbitration and Conciliation Act, 1996, and the requirement for appointment of an Arbitrator based on the arbitration clauses in the partnership deeds.

Ratio Decidendi: The court's decision was based on the presence of arbitration clauses in the partnership deeds and the legal principle that if a contract contains an arbitration clause and the Arbitrator has not been appointed, the High Court is required to appoint an Arbitrator for resolution of the dispute.

Final Decision: The court allowed the application, appointed Hon’ble Mrs. Justice (Retd.) Jaya Roy as the sole arbitrator, and directed the Registrar General to send the case records to the appointed arbitrator.

ORDER :

The instant application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking a direction for appointment of Arbitrator for adjudication of the dispute between the parties.

2. This Court had issued upon the concerned respondents, as would appear from order dated 15.09.2022. Steps have been taken and as per the office note dated 22.11.2022, the notices said to have been served validly.

3. Learned counsel for the petitioner, in view thereof, has submitted that since even in spite of service upon the concerned respondents, there is no appearance on their behalf as no vakalatnama has been filed, therefore, the matter may be disposed of by appointing an Arbitrator.

4. This Court has heard the learned counsel for the petitioner and after perusing the order dated 15.09.2022 as also the office note dated 22.11.2022, whereby and whereunder, the office has reported through the following note which reads hereunder as :-

    “It may be recalled that earlier in compliance to the Order dated 15/09/2022, notices upon Respondent no. 01 to 04 under Ordinary Process as well as Register cover with AD were issued.

Valid Service reports of notices upon Respondent no. 01 & 04 received as same were received by Respondents himself as per report of process server (kept at Z1 & Z4"),

Service report of notice upon Respondent no. 02 has been received which appears to be valid with a report of Process Server that son (Navneet Kant) of the Respondent has received the notice and he lives with Respondent jointly, Kept at flag Z2,

Service report of notice upon Respondent no. 03 has been received which appears to be valid with a report of Process Server that Brother (Navneet Kant) of the Respondent has received the notice and he lives with Respondent jointly, Kept at flag ‘Z3’,

Signed ADs of registered cover of Respondent no 01 & 04 have been received, kept on record.

ADs of registered cover of Respondent no. 02 & 03 have been received, kept on record. {said Ads have been received by Navneet},

But, no appearance of respondents have been made as yet as per computer enquiry.

Submitted before Bench "For Admission".

Before an App. Bench of S.J”

5. This Court, after taking into consideration the aforesaid office note and considering the fact that even after notice having been validly served upon the concerned respondents, no vakalatnama has been filed and, as such, deems it fit and proper to proceed with the matter for dealing the issue on merit.

6. The instant application has been filed by the applicants/petitioners invoking the jurisdiction conferred under Section 11(6) of the Arbitration and Conciliation Act, 1996, praying therein for appointment of independent Arbitrator for reference of the dispute arising out of two agreements, both dated 20.06.2020 entered by and between the petitioners/applicants and the respondents.

7. The brief facts of the case as per the pleading made in the application read hereunder as :-

It is the case of the petitioners/applicants that Late Sushil Kumar, husband of petitioner No.1 and father of petitioner No.2 and Late Lakhit Ram Mahto, father of Respondent No.1, 3 and 4 and husband of Respondent No.2, were partners in the partnership firm “Royal Cement Company” carrying on the business of a cement factory and another partnership firm running in the name and style of “Hotel Parvati” dealing in the business of hotel.

After the death of both the original partners, namely, Lakhit Ram Mahto and Sushil Kumar, the aforesaid family members were inducted as partners.

It is the further case of the petitioners/applicants that the petitioners were being kept in the dark about the affairs of the business and as no share of the profits were being paid to them, a meeting of the partners was held in April, 2021 in which important decisions were taken regarding the business and lands, including decision of scrutiny of the account to be made by the partners and payment of proportionate shares of the profits to them.

As the afores

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