Research › Search › Judgment

Gauhati High Court · body

2012 DIGILAW 500 (GAU)

Sharmistha Baruah v. Prahalad Kumar Agarwal

2012-04-24

HRISHIKESH ROY

body2012
JUDGMENT Hrishikesh Roy, J. 1. Heard Mr. N.N. Jha, the learned counsel appearing for the petitioner. The respondent is represented by Mr. S.P. Roy, the learned counsel. This is an application under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the Arbitration Act") for appointment of an Arbitrator to adjudicate on the dispute pertaining to the partnership firm M/s. ECO Motors of the petitioner and the respondent. Clause 12 of the partnership agreement dated 15.2.2009 provides as follows : Clause 12 Arbitration : That all the disputes relating to this partnership between the partners or their representatives if can not be settled mutually, the same shall be referred to arbitration and the entire proceedings thereto shall be governed as per provisions of the ARBITRATION AND CONCILIATION ACT. 2. Mr. N.N. Jha, the learned counsel submits that the petitioner through her notice dated 9.7.2010 (Annexure-A-2) addressed to the respondent had demanded appointment of an Arbitrator but as the notice failed to act within 30 days, Court should appoint an Arbitrator. 3. Mr. S.P. Roy, the learned counsel submits that the notice dated 97.2010 (Annexure-A.2) was not sent by the partner (petitioner) herself but by an Advocate, purporting to act on behalf of the partner. That apart, this advocate's notice was never served on the respondent. Accordingly Mr. Roy submits that condition precedent under Sections 3 and 11(4)(a) of the Arbitration Act is not satisfied and therefore he contends that the Court lacks jurisdiction to appoint Arbitrator, by exercise of powers under Section 11(6) of the Arbitration Act. He also refers to the FIR filed by the respondent against the petitioner leading to registration of the Jalukbari P.S. Case No. 693/2010 and the interpolation made in the lease deeds and other papers of the partnership firm to project the multitude of criminal aspects of the dispute and therefore argues that it is not a suitable case, to refer to arbitration. 4. Since the petitioner had not enclosed any Postal proof to show that the advocate's notice dated 9.7.2010 was actually dispatched, this Court on 17.9.2010 and on 21.1.2011 directed the petitioner to furnish proof to establish that the notice demanding arbitration was actually dispatched. 4. Since the petitioner had not enclosed any Postal proof to show that the advocate's notice dated 9.7.2010 was actually dispatched, this Court on 17.9.2010 and on 21.1.2011 directed the petitioner to furnish proof to establish that the notice demanding arbitration was actually dispatched. The petitioner eventually produced Postal Certificate from the Assistant Superintendent of Post Office (HQ), Guwahati and from this the petitioner asserts that a registered letter booked on 14.7.2010 was delivered to the addressee on 17.7.2010. But Mr. S.P. Roy points out that although postal delivery slip shows the addressee to be P.K. Agarwal (respondent), the letter was not received by the notice but was received by one Uddhab Deka. The Counsel contends that Uddhab Deka is neither a family member nor an employee of the respondent. 5. A reading of the FIR lodged by the respondent against the petitioner and her husband shows that serious allegation of cheating, criminal breach of trust etc. were made and consequently the Jalukbari P.S. Case No. 693/2010 was registered under Section 403 /406 /420 /468 /120-B of the IPC. The order dated 20.9.2011 of the learned Chief Judicial Magistrate (CJM.), Guwahati shows that although final report was initially submitted by the police, the case was ordered to be further investigated by the learned CJM. 6. Since allegation was made by the petitioner that the respondent has ceased to function w.e.f. 17.5.2010 in the partnership concern i.e. M/S ECO Motors and mischievous attempts were made by the petitioner to have the partnership converted into a proprietorship concern, a Civil Suit No. 79/2011 was filed by the respondent against the petitioner (making her defendant No. 1), where the plaintiff has asserted his right to the partnership business and claims consequential benefits. 7. For the Court to acquire jurisdiction to appoint Arbitrator under Section 11 of the Arbitration Act, it is necessary to be satisfied that notice demanding appointment of Arbitrator was duly dispatched and was received by the respondent or his representative. Only when the notice fails to appoint Arbitrator within 30 days from the receipt of request to do so from the other party, jurisdiction is conferred on the Court to appoint an Arbitrator. 8. What is significant in the present case is that initially the petitioner had not enclosed any postal certificate along with her Arbitration Petition to establish that the notice was dispatched to the respondent. 8. What is significant in the present case is that initially the petitioner had not enclosed any postal certificate along with her Arbitration Petition to establish that the notice was dispatched to the respondent. Only subsequently and that too because of orders of this Court, the petitioner produced a certificate from the postal authorities. Thereafter the respondent has filed affidavit asserting that the notice was never served on the respondent and the person who received the notice i.e. Uddab Deka is an unknown person and is not an employee or a family member of the respondent. Significantly, the petitioner has failed to counter this stand of the respondent. Thus the petitioner in my view, couldn't establish that notice was duly served on the respondent. 9. Moreover, this is a case where serious allegation of fraud, manipulation and misappropriation is made against the party who has demanded adjudication of the dispute through arbitration proceeding. But considering the seriousness of the criminal charges alleged against the petitioner by the respondent and the pendency of the criminal case against the petitioner and her husband, I feel that this may not be an appropriate case for adjudication by an Arbitrator. Since serious allegation of fraud and malpractice are alleged against the petitioner in respect of the functioning of the partnership firm and a civil case is pending, appreciation of evidence in a normal Court will be a better way of dealing with the matter. Therefore having regard to the law declared by the Apex Court in Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust and others, reported in 2012 AIR SCW 323, it is held that this is not a suitable case for referring to arbitration. 10. Before parting with the records, it may be recorded that the respondent has claimed on oath that the petitioner who was the other partner of the partnership firm M/s. ECO Motors hasn't filed the case and her signature is forged by her husband in the Vakalatnama and other related papers. But this Court doesn't wish to record any opinion on this aspect since it is already held that in the absence of the condition precedent for invoking the jurisdiction under Section 11 of the Arbitration Act, the prayer for appointment of Arbitrator can't be granted in the present case. In view of above, the petition is dismissed without any order on cost. Petition dismissed