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2021 Supreme(Mad) 2086
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
T. Jaganathan – Appellant
Versus
J.R.S. Crusher and Others – Respondents
C.M.A. No. 1592 of 2021, C.M.P. No. 8270 of 2021
Decided On : 20-10-2021
Advocate Appeared:
For the Appellant : L. Chandrakumar for M/s. B. Sundarapandiyan.
For the Respondent: M/s. Kanimozhi.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 37 (2) (b) and 37 – Civil Procedure Code, 1908 - Order I Rule 10 - Partnership Firm - Sold Property Illegally - Respondents Nos. 1 to 4, who are claimants in Arbitration, 5th respondent in this appeal, who is first respondent in Arbitration sold property belonging to partnership Firm illegally during pendency of Arbitration to Appellant – Held, He has purchased subject property only from 5th respondent in his individual capacity under a Sale-Deed registered as Document - Application has also been filed before Arbitral Tribunal by respondents Nos. 1 to 4, who are claimants under Order I Rule 10 CPC which is not applicable before Arbitral Tribunal - Arbitration and Conciliation Act is a special enactment and any application can be filed seeking for any relief only if Act permits such a relief to be granted - It is also noticed from impugned order that Arbitral Tribunal has not given any reasons for allowing impleading application filed by respondents Nos. 1 to 4 and it is a non speaking order - When respondents Nos. 1 to 4 have not satisfied requirements for impleading a non signatory to Arbitration agreement, Arbitral Tribunal has by total non application of mind to provisions of Arbitration and Conciliation Act as well as to settled position of law as indicated supra has erroneously allowed impleading application that too by a non speaking order - Hence impugned order has to be necessarily set aside by this Court - Appeal allowed.
JUDGMENT :
ABDUL QUDDHOSE, J.
Prayer: Civil Miscellaneous Appeals filed under Section 37 (2) (b) of the Arbitration and Conciliation Act, 1996 against the order of the Learned Sole Arbitrator Thiru. L. Yousuf Ali, District Judge (Retired) dated 26.02.2020 in M.P. No. 10/2018 in O.P. No. 347/2016.
1. This appeal has been filed under Section 37 of the Arbitration and Conciliation Act challenging the order dated 26.02.2020 passed by the Arbitral Tribunal under which the Appellant has been impleaded as a party respondent in the Arbitration.
2. There arose disputes between the partners of M/s. JRS Crusher, a registered Partnership firm and the dispute was referred to Arbitration in accordance with the Arbitration clause contained in the Partnership Deed at the instance of respondents Nos. 1 to 4 against the respondents 5 and 6. All the respondents are partners of M/s. JRS Crusher. The respondents 1 to 4 who are the claimants in the Arbitration filed M.P. No. 10 of 2018 in O.P. No. 347 of 2016 which is the Arbitration claim seeking to implead the Appellant/proposed party as the 3rd respondent in the Arbitral proceedings.
3. According to the respondents Nos. 1 to 4, who are the claimants in the Arbitration, the 5th respondent in this appeal, who is the first respondent in the Arbitration sold the property belonging to the partnership Firm illegally on 16.06.2017 during the pendency of the Arbitration to the Appellant. In such circumstances, M.P. No. 10 of 2018 was filed by the respondents Nos. 1 to 4 before the Arbitral Tribunal seeking to implead the Appellant as the 3rd respondent in the Arbitration.
4. A counter statement was also filed by the Appellant in M.P. No. 10 of 2018 before the Arbitral Tribunal denying the allegations of the respondents Nos. 1 to 4 and also questioning the jurisdiction of the Arbitral Tribunal to implead him as a party to the Arbitration on the ground that he is not a party to the Arbitration agreement. He has also categorically stated that he was a bona-fide purchaser, having purchased the property from the 5th respondent in his individual capacity and the property does not belong to the Partnership firm. Under the impugned order dated 26.02.2020, the Arbitral Tribunal has allowed M.P. No. 10 of 2018 filed by the respondents Nos. 1 to 4, who are the claimants in the Arbitration and by the said order, the Appellant was impleaded as a party respondent in the Arbitration.
5. The impugned order dated 26.02.2020 reads as follows:
This instant application in M.P. No. 10/2018 came to be filed by the petitioners/claimants for seeking directions to the first and second respondent to implead the proposed party as 3rd respondent in O.P. No. 347/2016 on the file of this court.
It is not in dispute between the parties on either side that the first respondent sold the property to a third party to one Mr. T. Jaganathan while the matter is sub-judice before this Court and before Hon'ble High Court also.
Under these circumstances I do not have any hesitation to pass an order to direct the proposed parties to implead in the main O.P. for the proper adjudication of the main case.
In the result this application is allowed without any cost.
6. Aggrieved by the aforesaid order, this appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996.
7. Heard Mr. L. Chandrakumar, learned counsel for the Appellant and M/s. Kanimozhi, learned counsel for the respondents.
Discussion:
8. The following are undisputed facts:
(a) the Appellant is not a party to the Partnership Deed dated 27.07.2013 entered into between the partners viz. the respondents.
(b) the Appellant is not a Partner of the Partnership firm M/s. JRS Crusher
(c) the appellant is only a purchaser of a property from the 5th respondent in his individual capacity under the Sale-Deed, dated 16.06.2017 registered as Document No. 2139 of 2017.
(d) Under the Sale-Deed dated 16.06.2017, the 5th respondent traces his title to a gift settlement deed, registered as document N
