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2018 Supreme(P&H) 214

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
B.S. WALIA, J.
Manjeet Singh and another - Petitioners
Versus
Harnek Singh and another - Respondents
CR No.7533 of 2017
Decided On : 02-02-2018

Advocates:
Advocate Appeared:
For the Petitioners:Mr. Ashwani Bakshi, Advocate.

IMPORTANT POINT
.

Headnote:Arbitration & Conciliation Act, 1996, S.8 – Arbitration Agreement – Suit for Recovery – Application for appointment of arbitrator was dismissed – Held; plaintiff a partner in the firm – Plaintiff also selling his personal agricultural produce to firm – Amount claimed by plaintiff is towards recovery of price of crops sold to defendant firm – Arbitration clause in partnership agreement would not apply as dispute is not amongst partners – Application held to be rightly dismissed – Specific Relief Act, 1963, S.34. (Para 9)

JUDGMENT :

B.S. WALIA, J.

1. Prayer in this petition under Article 227 of the Constitution of India is for setting aside order dated 23.08.2017-Annexure P-5, passed by the Learned Additional Civil Judge (Senior Division), Malout, dismissing the petitioners/defendants application u/s 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) for referring the parties to arbitration.

2. Brief facts of the case leading to the filing of the instant revision petition are that plaintiff/respondent No.1 filed a suit against the petitioners/defendant Nos. 2 and 3 as well as respondent No.2/defendant No.1 for recovery of Rs. 87,35,185/- i.e. Rs. 67,28,224.64/- as principle amount and Rs. 20,06,960.36/- as interest @ 12% per annum besides future interest @ 12% per annum till realization of the amount on account of price of agricultural produce sold by plaintiff/respondent No.1 to Commission Agent Defendant No.1/respondent No.2.

3. That on receipt of notice in the suit, the petitioners/defendants appeared before the learned trial Court and filed application dated 07.10.2016 u/s 8 of the Act for referring the parties to the suit to arbitration in terms of Clause No. 15 in partnership deed dated 01.04.2005. Clause 15 is reproduced as under :-

15. That in case of any dispute, doubt or difference arising between the partners or their legal representatives or either of the relating to interpretation of the terms and conditions of this deed or any matter concerning the said business, before or after the termination of this firm, the same shall be referred to an arbitrator to be appointed by the parties by mutual agreement whose decision shall be final, binding and conclusive on the said partners”.

4. Respondent No.1/plaintiff filed reply denying applicability of the arbitration clause on the ground that he had not filed the suit in his capacity as a partner but only as a farmer maintaining an account with the firm as such. Therefore, the dispute being one between a farmer and commission agent was not covered under the arbitration clause relied upon by the petitioners. After considering the pleadings and submissions of the parties, the learned trial Court vide order dated 23.08.2017 i.e. Annexure P-5 dismissed the application filed by the petitioners.

5. Order dated 23.08.2017 i.e. Annexure P-5 has been challenged on the ground that the learned trial court failed to take into account that respondent No.1/plaintiff was a working partner of the firm in question along with his brother Balwinder Singh and had created the alleged liability in the firm in connivance with his brother by manipulating the record of the firm, that the dispute raised in the suit was essentially a dispute arising out of the business of the partnership firm, therefore, the dispute being one concerning the business of the firm, was liable to be referred to arbitration being covered under arbitration clause in the partnership deed.

6. The Learned Addl. Civil Judge (Senior Division), dismissed the application in view of the stand of the plaintiff/respondent No.1 that he had filed the suit for recovery in his individual capacity as an agriculturist (and not on the basis of partnership between the parties) for the price of crops sold by him to the defendant commission agent against J-forms issued by the defendant commission agent but had not been given money due to him despite repeated requests. The learned trial Court also took into account that in terms of Section 13 of the Partnership Act, a firm was liable to indemnify the partner in respect of payments made and liability incurred by him. Moreover, genuineness of J-Forms alleged to have been issued by the defendants to the plaintiff as relied upon by the plaintiff in the suit was a matter of evidence and could not be gone into at that point of time. On the basis of the aforesaid reasoning, the learned Trial Court held that the arbitration clause in partnership deed did not have any bearing on the personal r




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