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2024 Supreme(All) 1335

MANOJ KUMAR GUPTA
Ram Taulan Yadav – Appellant
Versus
Himanshu Kesarwani – Respondent


Advocates:
Advocate Appeared:
For the Appellants : Prabhav Srivastava, Rishabh Srivastava, Ujjawal Satsangi.
For the Respondent: Abhay Kumar Singh.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  1. Service of Notice: The respondents were duly served through registered post, with some notices refused or unclaimed, but service was deemed sufficient (!) .

  2. Nature of Dispute and Application: The dispute arises from partnership agreements, with the application under Section 11 seeking the constitution of an arbitral tribunal to resolve partnership-related differences (!) (!) .

  3. Partnership Agreements and Arbitration Clauses: The original partnership agreement from 2016 contained an arbitration clause, which was reiterated in subsequent agreements, including a supplementary deed executed in 2021. These agreements collectively govern the partnership and its dispute resolution mechanism (!) (!) (!) .

  4. Continuity of Arbitration Clause: The arbitration clause from the initial agreement continues to be applicable despite the induction of new partners and subsequent amendments, as these amendments were executed to record changes while maintaining the original agreement's terms (!) (!) .

  5. Validity of Unregistered Partnership and Stamp Duty: The partnership was unregistered, and there were concerns about stamp duty deficiencies. However, recent jurisprudence clarifies that such deficiencies are curable and do not bar arbitration proceedings. Objections related to stamping can be raised before the arbitral tribunal, not as a ground to refuse arbitration (!) (!) .

  6. Binding Nature of Arbitration Clauses: The arbitration clauses in earlier agreements are enforceable against all partners, including those who were not signatories to subsequent agreements, provided they are part of the ongoing partnership relationship and have consented to the terms indirectly (!) (!) .

  7. Non-signatory Parties and Arbitration: Even if a party did not sign the later agreements, their consent to the original terms and participation in the partnership can bind them to arbitration clauses, with the question of their binding nature to be determined by the arbitral tribunal (!) (!) .

  8. Appointment of Arbitrator: The court has proposed a former judge as the arbitrator, emphasizing the importance of obtaining proper disclosures and consent from the arbitrator before proceeding further (!) (!) .

  9. Scope of Tribunal's Authority: The arbitral tribunal will decide issues such as the enforceability of arbitration clauses and the participation of non-signatory partners, based on evidence and legal principles, leaving factual determinations to the tribunal (!) .

  10. Procedural Directions: The court has directed the office to seek the arbitrator's consent and disclosures, with further proceedings scheduled after their receipt, ensuring compliance with statutory requirements (!) (!) .

These points encapsulate the court's reasoning, the legal principles applied, and the procedural directions issued in this arbitration-related matter.


JUDGMENT :

MANOJ KUMAR GUPTA, J.

1. As per office report dated 26.07.2023, opposite party No. 1 has been duly served by registered post but no one has appeared on his behalf. In respect of opposite party No. 2, the notice sent to him by registered post has returned with the endorsement of refusal. Thus, service on the said respondent is also sufficient. However, no one has appeared on his behalf also.

2. Heard Shri Ujjawal Satsangi and Shri Rishabh Srivastava along with Shri Prabhav Srivastava, learned counsel for the applicants and Shri Abhay Kumar Singh, learned counsel for opposite party No. 3.

3. The instant application under Section 11 of the Arbitration and Conciliation Act, 1996 has been filed by the applicants invoking the power of this Court to constitute an arbitral tribunal in respect of the disputes arising between the parties out of partnership agreements dated 29 August 2016, 2 March 2020 and 20 February 2021.

4. The facts in brief are that a partnership agreement was executed on 29 August 2016 between applicant no. 1 (Ram Taulan Yadav) and one Sheela Yadav for doing business in the name of M/s Autar & Associates. As per Clause 14 of the said agreement all disputes and dif

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