IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR BEFORE HON'BLE SHRI JUSTICE G. S. AHLUWALIA

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ON THE 28 OF NOVEMBER, 2025 ARBITRATION APPEAL No. 23 of 2025 ARVIND AGRAWAL AND OTHERS Versus AAKASH JAIN Appearance:

Shri Prashant Singh Kaurav, Advocate for the applicants.

Shri Nikhil Rai, Advocate for respondent.

ORDER This arbitration appeal, under Section 37(1)(A) of Arbitration and Conciliation Act, 1996 (for short "the Act") has been filed against the order dated 16.12.2024 passed by Principal District Judge, Gwalior, in RCSA No.1156/2024, by which application filed by applicant under Section 8 of the Act has been rejected.

2. Facts necessary for disposal of present appeal, in short, are that respondent filed a suit for declaration of title and permanent injunction, pleading inter alia that defendant Nos. 1 and 2 /applicants Nos. 1 and 2 constituted a partnership firm in the name of M/s Cosmo Infratech. At the time of constitution of partnership firm, defendants Nos. 1 and 2 had a partnership of 50% each. Defendant Nos. 1 and 2 had purchased Survey No. 94/1, 95, 96 and 97, total 13 Bigha of land, by registered sale deed in the name of defendant No. 3, whereas the sale deed of Survey No. 79, area 3 bigha and 13 biswa, Survey No. 108/2/1, area 1 bigha and 10 biswa, which was adjoining to the aforesaid land, was yet to be executed. On 16.02.2021, defendant Nos. 1 and 2 executed an agreement and agreed to give their 22% of share (total 44%) of partnership worth rupees 5 crore 65 lacs to the plaintiff, and thus plaintiff became the partner of 44% of share, whereas defendant Nos. 1 and 2 remained partner of 28% each in defendant No.3/firm. Accordingly, an amended partnership deed dated 23.03.2021 amongst the plaintiff as well as defendant No. 1 and 2 was executed. After the plaintiff paid his share, the sale deed of Survey No. 79, area 3 bigha and 13 biswa and Survey No. 108/2/1, area 1 bigha and 1 biswa, was executed in the name of the defendant No. 3/Firm. After purchasing the land, the entire land was got diverted in the name of defendant No. 3. After taking permission from different departments, development work was started and residential and non-residential plots were being developed. Later on, plaintiff came to know that defendant Nos. 1 and 2 have already sold 44,000 square feet of land to Shri Naveen Shivhare in a clandestine manner and no information was given by the defendant Nos. 1 and 2 to the plaintiff. Plaintiff came to know about the said fact when arbitration took place in a different dispute pending between defendants No. 1 and 2 and Naveen Shivhare. The cost of 44,000 square feet of land which has been given by defendants No. 1 and 2 to Naveen Shivhare is Rs. 26 crore 40 lacs and accordingly, the share of plaintiff comes to Rs. 11 crores 60 lacs. However, the said amount has not been paid by defendants Nos. 1 and 2. Plaintiff also came to know that defendants Nos. 1 and 2 have also not made payment of entire consideration amount in respect of land which was purchased by them in the name of defendant No. 3 prior to induction of plaintiff as partner. However, at the time of induction of plaintiff as partner, defendant Nos. 1 and 2 had assured that all the lands are free from all encumbrances. Defendant Nos. 1 and 2 are alienating the developed plots at the rate of Rs. 5,000 to 6,000 per square feet, whereas Collector guideline of those plots is between Rs. 800/- to 1,000/-. Thus, it was pleaded that defendant Nos. 1 and 2 are taking money in black and account of the same has not been given to the plaintiff. No partition has taken place between plaintiff and defendant Nos. 1 and 2, and without partition defendant Nos. 1 and 2 have no right or title to alienate any part of the property, whereas it is being done by defendants Nos. 1 and 2, therefore it is illegal. Plaintiff had requested defendant Nos. 1 and 2 to partition the disputed agricultural land but defendant Nos. 1 and 2 always avoided the same and as intention o