2026 Supreme(Online)(Del) 6334

IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Madhu Jain, JJ
Prem Lata Surekha – Appellant
Versus
Chakradhari Surekha – Respondent
FAO(OS) (COMM) 70/2025 | CM APPL. 24573/2025

Appellate courts cannot substitute their own factual findings for those of an arbitral tribunal unless the award is perverse. Furthermore, procedural amendments prescribing time-bound completion of arbitrations do not apply retrospectively to proceedings commenced before the amendment's effective date.

Headnote:(A) Arbitration & Conciliation Act, 1996 - Sections 21, 34, 37, 29A - Indian Partnership Act, 1932 - Sections 31, 32, 43 - Dispute over partition of partnership firm assets - Applicability of procedural amendments - Scope of interference in appellate jurisdiction.

(B) Appellate jurisdiction under Section 37 is limited to grounds set out in Section 34. It is well-settled that the court cannot undertake independent re-assessment of merits or substitute its own view for that of the arbitral tribunal unless the award suffers from perversity, illegality, or violation of fundamental policy. Interference should not be casual or cavalier. (Paras 63, 64)

(C) A partnership at will remains active until formally dissolved through established legal procedure. Procedural time limits introduced by amendments cannot be applied retrospectively to arbitral proceedings initiated prior to the commencement of the amendment act, unless parties expressly agree. Adjudication regarding reconstitution of a firm requires compelling evidence; failure to produce original documents or substantiate claims through official records necessitates rejection of such contentions. (Paras 29, 30, 53)

Facts of the case:
The dispute arose from a family-run partnership firm constituted in 1974. A claim was initiated for partition of the firm's property and rendition of accounts, asserting that recent documents showing firm reconstitution were forged and that the original partnership remained valid. The counter-claim asserted that the firm had been reconstituted and the original partners had retired. The arbitral tribunal concluded that the defense failed to prove reconstitution and that the partnership remained in existence until formally dissolved by notice in 2015. The arbitral award granted partition of the property in equal shares. The initial court upheld this award, leading to the present appeal.

Findings of Court:
The court held that the arbitral proceedings were initiated before the enactment of statutory time limits, rendering those limits inapplicable. The court emphasized that the tribunal properly analyzed evidence, noted the failure of the appellant to substantiate the alleged reconstitution, and correctly determined the existence of the original partnership. The findings of the tribunal were concurrent and devoid of perversity.

Issues: Whether the time limits stipulated for arbitral proceedings are retrospectively applicable to ongoing cases; whether the court can re-examine evidence in an appeal under the governing statute; and whether the partnership was validly reconstituted or continued in its original form.

Ratio Decidendi: An appellate court is restricted from re-adjudicating the merits of a dispute already finalized by an arbitral tribunal if the findings are not perverse. A partnership remains in existence until properly dissolved, and the burden of proving any alteration to the partnership constitution rests on the party asserting such change. Regulatory amendments concerning procedural timelines do not apply to arbitrations pending before the effective date of the legislation.

Result: Appeal dismissed with cost of Rs. 1,00,000/- imposed on the appellant.