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2018 Supreme(UK) 219

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Sudhanshu Dhulia, J.
Mrs. Namrata Sen - Applicant
Versus
Captain Saurabh Chauhan (Retd.) - Respondent
Arbitration Application No. 47 of 2015
Decided On : 11-06-2018

Advocates:
Advocate Appeared:
For the Applicant : Mr. B.D. Pandey
For the Respondent: Mr. Naresh Pant

The main legal point established is that the arbitration clause in the original partnership deed applies to supplementary contracts, and the court's intervention in appointing an arbitrator is minimized under Section 11(6-A) of the Arbitration and Conciliation Act, 1996.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11(6)

Fact of the Case:

The applicant filed an arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. The applicant claimed to be a partner in a firm and sought appointment of an arbitrator due to a dispute with the respondent, who denied the partnership and the supplementary partnership deed.

Finding of the Court:

The court found that the respondent had admitted the applicant to be a partner of the firm in previous years before the Income Tax authorities, and the respondent's denial of the partnership and the supplementary partnership deed was not tenable. The court also held that the arbitration clause in the original partnership deed applied to the supplementary contract, and the application for appointment of an arbitrator was not time-barred.

Issues: The issues involved the validity of the applicant's partnership claim, the applicability of the arbitration clause to the supplementary contract, and the timeliness of the application for appointment of an arbitrator.

Ratio Decidendi: The court relied on the respondent's previous admission of the applicant's partnership, the interpretation of the arbitration clause in the original partnership deed, and the timeliness of the application under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Final Decision: The court appointed an arbitrator, Justice Irshad Hussain, to constitute the arbitral tribunal, based on the existence of a dispute and the presence of an arbitration clause in the deed.

JUDGMENT :

Sudhanshu Dhulia, J.

This arbitration application has been filed by the applicant under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.

2. The case of the applicant in brief is that there was an original partnership agreement between the maternal grand-mother of the applicant, namely, Smt. Reva Rautela, and her brother i.e. the respondent on 18.12.2006. The partnership was for running a hotel in the name and style of “Reva Retreat” at “Bhowali”, district Nainital. Admittedly, this partnership deed is a document which is duly registered. During the course of hearing this document was also produced before this Court by the respondent, and was perused by this Court. On 06.06.2008, the present applicant was inducted as one of the partners in the firm and since then she claims to be a partner of the firm. It is again an admitted fact that the supplementary partnership deed dated 06.06.2008 was never registered. Smt. Reva Rautela, the maternal grandmother of the applicant and the respondent, passed away on 16.10.2014. Thereafter certain dispute arose between the applicant and the respondent, who are sister and brother, respectively. The applicant moved an application before the respondent for appointment of an arbitrator, on which no action was taken and consequently the applicant became constrained to file the present arbitration application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

3. Counter affidavit and rejoinder affidavit have been filed. Parties have been heard at length at various points of time.

4. The principal contention of the counsel for the respondent Sri Naresh Pant is that the applicant is not a partner. In fact respondent denies the supplementary partnership deed and claims it to be a forged and fabricated document. Therefore the clear stand of the respondent is that since the applicant is not a partner of the firm, and the supplementary partnership deed on which she has placed reliance is a forged and fabricated, there is no question of appointment of arbitrator.

5. The fact of the matter is that though the supplementary partnership deed is not registered, the respondent had admitted the applicant to be a partner of the firm in the year 2010-11, 2011-12 and 2012-13 before the Income Tax authorities, a fact to which the respondent admits.

6. Be that as it may, the veracity and the bona fide of the claim of the applicant of a partner is that the respondent had admitted that applicant was one of the partners of the firm, and he now cannot retract.

7. There are other important facts, which must be settled before any order is passed in this matter. The first and foremost point raised by the respondent is that in any case the supplementary deed on which reliance is being placed by the applicant is an unregistered document. The respondent has relied upon Section 49 of Registration Act, 1908 as well as Section 69 of the Indian Partnership Act, 1932.

8. Section 49 of the Registration Act, 1908 reads as under:

“49. Effect of non-registration of documents required to be registered.- No document required by section 17 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall-

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:

[Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.]”

9. Section 69 of the Indian Partnership Act, 1932 reads as under:

69. Effect of non-registration.- (1) No sui






























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