JUDGMENT :

Suvir Sehgal, J.

CM-14684-CII-2024

Application is allowed, as prayed for.

Replies filed on behalf of respondents No. 2 and 3 are taken on record.

Main case.

1. This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the 1996 Act') seeking appointment of an Arbitral Tribunal comprising of a sole Arbitrator to adjudicate the dispute between the parties.

2. Learned senior Advocate for the petitioner submits that the petitioner and respondents No.2 to 6 had entered into a partnership deed, dated 08.01.2021 and a firm by the name of M/s Sham Jewels and Infra, respondent No.l was constituted. Vide partnership deed, dated 31.08.2021, Annexure P-1, respondent No.7 was inducted as a partner and the firm was re-constituted. He submits that some differences arose between the parties and the petitioner served a notice of retirement dated 30.08.2022, Annexure P-2 upon the other partners and by virtue of legal notice, dated 01.11.2022, Annexure P-3, petitioner invoked arbitration clause No.21 of the partnership deed, Annexure P-1. He submits that some respondents sent separate replies, Annexures P-4 and P-5 to the legal notice and have opposed the appointment of an arbitrator.

3. Upon notice by this Court, a common reply has been filed on behalf of respondents No.2 and 3 to the main petition as well as to the miscellaneous application. Except for respondents No.2 and 3, counsel representing the other respondents have stated that they do not have any objection, in case, an arbitrator is appointed. Counsel for the contesting respondents has opposed the petition on two grounds. First objection raised is that the partnership firm is unregistered and by referring to the bar under Section 69(3) of the Indian Partnership Act, 1932, it has been contended that arbitral proceedings at the instance of an unregistered firm are not maintainable. Reliance upon the judgements of the Supreme Court in

(i) Jagdish Chander Gupta Versus Kajaria Traders (India) Ltd (1964) 8 SCR 50;

(ii) Prabhu Shankar Jaiswal Versus Sheo Narayan Jaiswal and ors. (1996) 11 SCC 225; and

(iii) U.P. State Sugar Corporation Ltd Versus Jain Construction Co. and another (2004) 7 SCC 332.

4. Second objection raised by the contesting respondents is that by virtue of notice, Annexure P-3, petitioner has invoked arbitration clause in partnership deed, dated "26.08.2021", however, no such agreement was ever entered into between the parties. To counter the respondents, counsel for the petitioner has relied upon the judgments of the Hon'ble Supreme Court and submits that the date "26.08.2021" in notice, Annexure P-3, is an inadvertent error and the reference is to the partnership deed, Annexure P-1 between the parties.

5. I have heard counsel for the parties and considered their respective submissions.

6. Both the objections raised by the respondents are being dealt with hereunder, one by one. The judgements relied upon by counsel for respondents No.2 and 3 pertain to the interpretation of Section 69 of the Indian Partnership Act, 1932 in relation to the Arbitration Act, 1940, (hereinafter referred to as "the 1940 Act"). Supreme Court discussed the distinction between the 1940 Act and the 1996 Act in Umesh Goel Versus Himachal Pradesh Co-operative Group Housing Society Ltd. (2016)11 SCC 313 and held that arbitral proceedings do not come within the ambit of expression "other proceedings" used in Section 69(3) of the Partnership Act and bar under Section 69, ibid, can have no bearing on arbitral proceeding and award. The judgement in Jagdish Chander's case has been noticed by the Supreme Court and it has been observed that it does not have any application to the proceedings, which have emanated under the 1996 Act. In particular, reference deserves to be made to paras 27 and 28 of the judgement in Umesh Goel's case (supra), which are reproduced hereunder:-

"27. The scope and ambit of the power and jurisdiction of 'court ' defined under Section 2(e) of