IN THE HIGH COURT OF ALLAHABAD
SARAL SRIVASTAVA, J.
Shobhit Sah and Others - Petitioners
Versus
M/s Induranta Realtors and Others - Respondents
Matters Under Article 227 No. 3386 of 2022
Decided On : 04-07-2022
Constitution of India, 1950 - Article 227 - Code of Civil Procedure, 1908 - Order 7 Rule 11 - Arbitration and Conciliation Act, 1996 - Section 8, 9, 11 - Commercial Court Act, 2015 - Section 2 (1) (C) (XV) – Arbitration - Appointment of arbitrator - Plaintiff-respondent no.1 instituted a suit bearing Original Suit against petitioners, who are defendant nos.2, 3, 4 & 7 in suit stating therein that a registered partnership agreement was entered into between respondent no.1, petitioners and respondent nos.2 to 4, who are defendant nos.1, 5 & 6 in suit, - Under partnership agreement, petitioners shall transfer ownership of suit property to respondent no.1, and respondent no.1 shall bear all expenses in developing suit property -Whether dispute is to be referred to arbitrator under clause 21 of partnership deed, first question which needs to be determined is whether dispute among partners arises out of partnership deed - Whether dispute falls within ambit of arbitration clause is yet to be adjudicated upon. It is relevant to notice that respondent no.1 has not approached proper forum under Section 11 of Act, 1996 for appointment of Arbitrator - Whether present case falls within periphery of one of such cases where this Court should exercise its power under Article 227 of Constitution of India to quash plaint or as alternative remedy is available to petitioners in form of application under Order 7 Rule 11 of C.P.C., they may be relegated to same – Held, It is also contended that suit has been instituted by concealing material fact that respondent no.1 has filed an application under Section 9 of Act, 1996 before Commercial Court Act wherein he admitted in para 21 that dispute falls within ambit of arbitration clause of partnership agreement, that may be so, but at this stage, it is too early to conclude that suit is liable to be dismissed for concealment of fact inasmuch as before dismissing suit on ground of concealment, court has to ascertain as to whether such concealment of fact has any bearing on outcome of suit, which can be determined only on basis of evidence and material on record and not by this Court in exercise of its supervisory jurisdiction under Article 227 of Constitution of India - Writ petition dismissed.
JUDGMENT :
1. Heard Ms. Shreya Gupta, learned counsel for petitioners.
2. The petitioners through the present petition under Article 227 of the Constitution of India have prayed for quashing of plaint of Original Suit No.557 of 2022.
3. The facts, in brief, are that plaintiff-respondent no.1 (for convenience referred to as 'respondent no.1') instituted a suit bearing Original Suit No.557 of 2022 against the petitioners, who are defendant nos.2, 3, 4 & 7 in suit (for convenience referred to as 'petitioners') stating therein that a registered partnership agreement was entered into between the respondent no.1, petitioners and respondent nos.2 to 4, who are defendant nos.1, 5 & 6 in the suit, (for convenience referred to as 'respondent nos.2 to 4). Under the partnership agreement, petitioners shall transfer the ownership of suit property to respondent no.1, and the respondent no.1 shall bear all expenses in developing the suit property. The details of the suit property have been stated at the foot of the plaint. Under the partnership agreement, multistory building, residential complex, commercial complex, multiplex complex, hotel/motel apartment club, etc. will be constructed and respondent no.1 was given possession of the suit property.
4. The further averments in the plaint is that respondent no.1 incurred a huge amount in developing the suit property and started construction on 21.04.2022. The petitioners with some unscrupulous persons came to the suit property and started threatening respondent no.1 and made an attempt to dispossess respondent no.1 from the suit property. It is further stated that the cause of action for the institution of suit arose on 21.04.2022 when respondent no.1 came to know that the petitioners want to sell the suit property to some other person at a higher price. In the aforesaid backdrop, the following relief has been prayed for in the suit:-
d& ;g fd ctfj;s gqdqe bErukbZ nokeh noke ds fy;s Áfroknhx.k dks eqekfu;r fd;k tkos fd Áfroknhx.k fdlh nhxj l[l dks fdlh Ádkj dk dksbZ Hkh vUrj.k o gLrkUrj.k] lV~Vk ;k cSukek ;k fdlh Hkh Ádkj dk Assign Agreement Á'uxr tk;nkn ftldk fooj.k okni= ds vUr esa e; uD'kk utjh o pkSgnh ds fn;k x;k gS] dk u djsa rFkk oknh ds LokfeRo dh Hkh Hkwfe ij oknh ds 'kkfUr iw.kZ v/;klu esa dksbZ vojks/k iSnk u djsa rFkk mlds mi;ksx miHkksx o fuekZ.k dk;Z tks py jgk gS mldks u jksds rFkk fdlh rjg dh dksbZ eqtfger iSnk u djsA
[k& ;g fd dqy [kpkZ eqdnek cgd oknh f[kykQ Áfroknhx.k vk;n Qjeku tk;A
x& ;g fd vykok [okg ctk; eqrftdjg lnj onkfu'r jk; vnkyr oknh vkSj Hkh ftl fdlh nknjlh dks ikus dk eq'rgd djkj ikos mldh Hkh fMxzh cgd oknh f[kykQ Áfroknhx.k vk;n Qjek;k tkosA**
5. The description of the suit property as stated at the foot of the plaint is as follows:-
iwjc&vkjkth uEcj&154 o vU;
if'pe& tehu jktd`".k nkl vkjkth uEcj 116 o vU; mRrj&ÁkbosV jkLrk ckngwa edcwy vkye jksM ¼eq[; ekxZ½
nf{k.k& vkjkth uEcj 120]121]122 o vU; o edku ua0 ,l 8@106,A**
6. Learned counsel for the petitioners has urged that under clause 21 of the partnership deed, any dispute between partners of the firm shall be referred to an arbitrator who has jurisdiction to decide the dispute. It is further contended that the suit filed by respondent no.1 is sham illusory and inspired by nefarious and vexatious design to harass the petitioners which are established from the record and in such view of the fact, this Court under Article
The mere existence of an arbitration clause does not automatically oust the jurisdiction of civil courts unless explicitly stated in law.
A party to an arbitration agreement or any person claiming through or under him is entitled to apply for referring the dispute before the arbitrator, unless it is found that prima facie no valid arbi....
The main legal point established in the judgment is the scope of revisional powers under Section 115 of the CPC and the principles of rejection of plaint under Order VII Rule 11 of the CPC.
The court reaffirmed that the scope of inquiry under Section 11 is limited to determining the prima facie existence of an arbitration agreement, and the withdrawal of a prior application does not con....
A partner cannot submit a dispute to arbitration without express authority from all partners, as required by Section 19(2)(a) of the Indian Partnership Act.
The appointment of an arbitrator is invalid if the partnership deed is not duly stamped and jurisdiction lies where the immovable property is situated.
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