CORAM: N. J. JAMADAR, J.

JUDGMENT RESERVED ON: 13TH JANUARY 2025

JUDGMENT PRONOUNCED ON: 17TH APRIL 2025

JUDGMENT:

1. Rule. Rule made returnable forthwith and with the consent of the learned counsel for the parties, heard finally.

2. This Petition under Article 227 of the Constitution of India assails the legality, propriety and correctness of a judgment and order dated 4th September 2024 passed by the learned District Judge, Kalyan, in MCA No. 4 of 2024 whereby the Appeal preferred by the Petitioner-original Defendant No.2 against an order passed by the Trial Court refusing to refer the parties to Arbitration under Section 8 of the Arbitration and Conciliation Act 1996 (“the Act of 1996”) came to be dismissed.

3. Shorn of superfluities, the background facts can be stated as under:

3.1 The Petitioner-Defendant No.2, Respondent No.3-Defendant No.3 and Narayan Tiwari, the predecessor-in-tile of Respondent Nos. 1 and 2-Plaintiffs, had entered into a partnership under the name and style of M/s Tiwari Enterprises. The firm was engaged in the business of builders and developers and other allied activities. They had agreed to share the profits in the ratio of 50%, 25% and 25%, respectively. The partnership was at will. The partnership firm-Defendant No.1 did develop certain properties.

3.2 The Plaintiffs asserted Narayan Tiwari, their father, was unwell since the year 2012. Defendant No.2 took undue advantage of the said situation and usurped the control of the said firm and thereby caused prejudice to Narayan Tiwari. On 27th May 2017, Narayan Tiwari passed away. After the demise of Narayan Tiwari, the Plaintiffs called upon Defendant No.2 to determine the share of late Narayan Tiwari. However, the Defendants did not pay head to the request of the Plaintiffs. Instead the Defendant No.2 in collusion with his Son, Yogesh Narayan Tiwari, prepared fraudulent and forged documents to falsely claim that Yogesh Tiwari came to be inducted as a partner of the firm. Hence the Suit for rendition of accounts and determination of the share of late Narayan Tiwari in the firm.

3.3 Defendant No.2 filed an Application under Section 8 of the Act of 1996, contending that the Plaintiffs were in custody of the original Deed of Partnership dated 31st January 2003. The partnership agreement contains an arbitration clause. It was, therefore, necessary to refer the parties to Arbitration.

3.4 The Application was resisted by the Plaintiffs.

3.5 By an order dated 19th December 2023, the learned Civil Judge, Senior Division, Kalyan declined to refer the parties to Arbitration

3.6 observing, inter alia, that the Plaintiffs had made allegations of fraud and preparation of false documents. Consequently, Arbitrator would not be in a position to decide those issues. Aggrieved, Defendant No.2 preferred an Appeal under Section 37 of the Act of 1996. By the impugned order, the learned District Judge, dismissed the Appeal on a different ground, namely, Defendant No.2 was not admitting the existence or enforcement of the Partnership Deed which contains arbitration clause, as Defendant No.2 had set up a Deed of Reconstitution of the partnership firm under which late Narayan Tiwari and Rakesh Tiwari retired from the firm and Yogesh Tiwari, son of Defendant No.2, allegedly came to be inducted in the firm.

3.7 Being aggrieved, Defendant No.2 has approached this Court.

4. I have heard Mr. Abhay S. Khandeparkar, the learned Senior Advocate, for the Petitioner and Mr. Sumedh Modak, the learned Counsel for the Respondents-Plaintiffs. With the assistance of the learned Counsel for the parties, I have perused the pleadings and documents on record.

5. Mr. Khandeparkar, the learned Senior Advocate for the Petitioner, submitted that the learned Civil Judge as well as the learned District Judge were clearly in error in refusing to refer the parties to Arbitration in the face of an explicit arbitration clause. All the prerequisites to refer the parties to Arbitration under Section 8 o