Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Del) 236

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
MR. MOHD. KHALID – Appellant
Versus
M/S JAI MATA DI PACKAGING THROUGH ITS PARTNERS & ORS. – Respondent
ARB.P. 1115/2025

Advocates:
For the Appellants/Petitioners: Mr. Mukesh Rana, Ms. Mamta, Mr. Janesh Patherwal, Ms. Bhawna Singh, Ms. Vanshika Rastogi
For the Respondents: Mr. Hemant Kothari, Mr. Bharat Gupta

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 confer exclusive jurisdiction under Section 42.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11 - Appointment of Sole Arbitrator - Petition filed for appointment of Arbitrator under Partnership Agreement clause - Disputes arose due to non-payment of dues and operational conflicts among partners - Respondent's objections rejected on the basis of jurisdiction and nature of proceedings under Section 9 and Section 42 - Court confirmed existence of arbitration agreement and its applicability - Arbitrator appointed to adjudicate disputes. (Paras 1, 19, 26, 36, 38)

(B) Jurisdiction under Section 42 - Court clarified that Section 42 does not apply when the first petition is unresolved or withdrawn, preventing exclusive jurisdiction by one court based on an abandoned proceeding. (Paras 30, 34)

Facts of the case:
The Petitioner filed a petition seeking a Sole Arbitrator under the Arbitration Act due to conflicts regarding operational control and financial contributions in a partnership for a business involving packaging and mining. The partners did not agree on payments due, leading to operational disruptions. (Paras 5-12)

Findings of Court:
The Court determined that the petition under Section 11 was maintainable, and no valid jurisdiction bar existed due to the dismissal of the Section 9 application. An Arbitrator was appointed to resolve partnership disputes. (Paras 24-36)

Issues: Whether the present Petition for appointment of an Arbitrator is maintainable after a Section 9 application was previously filed and dismissed? (Paras 19, 30)

Ratio Decidendi: The court ruled that the first application under Section 9, having ceased to exist, did not preclude the current Section 11 application. Courts must respect the arbitration agreement's terms and not allow procedural hurdles to obstruct legitimate claims. (Paras 24, 36)

Result: Petition allowed; Arbitrator appointed.

Table of Content
1. formation and structure of partnership agreement (Para 1 , 2 , 3 , 4)
2. conflict and disputes between partners in a partnership (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12)
3. legal notices and petitions for dispute resolution (Para 13 , 14 , 15)
4. judicial scrutiny under section 11 of the arbitration act (Para 16 , 17 , 19 , 20 , 21 , 22)
5. legal basis for appointing an arbitrator (Para 23 , 24 , 25 , 26)
6. jurisdictional implications of section 42 of the arbitration act (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
7. final ruling on the arbitration petition and appointment of arbitrator (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46)

JUDGMENT

HARISH VAIDYANATHAN SHANKAR J.

1. The present Petition, under Section 11 of theArbitration and Conciliation Act, 1996 , Act, has been filed seeking the appointment of a Sole Arbitrator in terms ofClause 15 , Arbitration Clause of thePartnership Deed dated 23.02.2023 , Partnership Deed/Agreement for adjudication of disputes inter se the parties.

2. M/s Jai Mata Di Packaging, Respondent No. 1-Firm, which is Respondent No. 1 herein, is a Partnership Firm, while the Petitioner, along with Respondent Nos. 2, 3 and 4, are equal partners with 25% equity share in Respondent No.1-Firm.

3. As stated in the Petition, the said partnership was entered into by way of a Partnership Deed dated 23.02.2023. The various important aspects of the Agreement are delineated below:

a. The Partnership Agreement was entered into and registered in New Delhi.

b. Respondent No.1-Firm was formed to carry on the business of Packaging Material and Mining/Excavation of river sand.

c. Clause 2 of the Agreement states that the Principal Place of Business and the Registered Address of Respondent No.1- Firm is at A-31/5, Ground Floor, Gali No. 4, A-Block, Kaithwara, NR Engg. College, Delhi-110053.

d. The said business activities were also to take place through its old Principal Place of Business, i.e., C-80, Shivaji Park, New Delhi, and through its additional place of business in Uttar Pradesh and Himachal Pradesh.

e. Clause 9 of the Agreement recognizes the right of every partner to have access to the books of accounts of the firm and to verify its correctness.

f. Clause 15 of the Agreement provides for the Arbitration Clause for redressal of any difference of opinion or dispute between the partners.

4. It is stated in the Petition that Respondent No. 1-Firm was allotted the Sand/Morram mining project at Yamuna River at Balu Ghat of Dhaurahara, Chitrakoot, Uttar Pradesh, by the State Government vide Lease Agreement dated 11.06.2021, Lease Agreement, for a period of 5 years till 10.06.2026.

5. It is further stated that on 01.05.2024, Respondent No. 2 visited the mining site along with her gang and obstructed the work, hijacked the operations and intimidated the staff as well as the Petitioner, forcing them to leave. This led to being a point of conflict between the Petitioner and Respondent Nos. 2 to 4 and ultimately culminated into the closure of the site.

6. On 09.05.2024, a Show Cause Notice was issued to the Respondent No. 1-Firm by the Office of District Magistrate, Chitrakoot (Mining Section) for depositing the outstanding Royalty of Rs. 6,97,40,914/-, in order to prevent termination of their Lease Agreement for Mining.

7. The Petitioner vide letter dated 20.05.2024 expressed his readiness and willingness to pay his proportionate share of dues and called upon Respondent Nos. 2, 3 and 4 to pay their share of the amount with respect to the dues payable to the Mining Section in the interest of Respondent No. 1-Firm to keep the project site operational.

8. However, none of the other partners consented to contributing their share of dues payable, and thereby affected the operations of Respondent No 1-Firm.

9. Further, as stated, since the Petitioner was neither in operational and final control of Respondent No. 1-Firm nor was the authorised signatory to the bank account of it, vide letter dated 20.05.2024, he call

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2026 Supreme(Online)(Del) 236

IN THE HIGH COURT OF DELHI AT NEW DELHIHarish Vaidyanathan Shankar, JMR. MOHD. KHALID – AppellantVersusM/S JAI MATA DI PACKAGING THROUGH ITS PARTNERS & ORS. – RespondentARB.P. 1115/2025

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 confer exclusive jurisdiction under Section 42.

Cases Referred (4)

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
MR. MOHD. KHALID – Appellant
Versus
M/S JAI MATA DI PACKAGING THROUGH ITS PARTNERS & ORS. – Respondent
ARB.P. 1115/2025