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2014 DIGILAW 2292 (DEL)

Dharam Pal Kadam v. Jagdish Chander Suneja

2014-08-26

DEEPA SHARMA

body2014
JUDGMENT : 1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. It is submitted that the petitioner as well as respondent Nos. 1 and 2 had entered into a partnership agreement dated 17.4.2012 to run a liquor shop under the name and style of Krishna Marketing, situated at GF-3A, Ground Floor, Pearl Omaxe Building, Netaji Subhash Place, Pitampura, Delhi. It is submitted that the petitioner had paid a sum of Rs. 15 lakh through cheques in the account of the partnership firm. Subsequently, vide letter dated 1.7.2013 the petitioner wrote to Commissioner (Excise) that he had resigned from the said partnership firm. It is submitted that the petitioner had sent legal notice dated 3.10.2013 to the respondents for termination of the partnership agreement and for rendition of accounts. It is submitted that pursuant to Clause 13 of the partnership deed, any dispute arising between the parties shall be mutually decided by the parties or shall be referred to arbitration, if the partners fail to mutually agree upon. It is submitted that despite having written the letters the respondents have not appointed any arbitrator, hence the present petition. 3. Notice of the petition was issued to the respondents on 25.4.2014. Respondent No. 2, through his Counsel has submitted that he does not wish to file any reply and agrees for appointment of an Arbitrator by this Court. This factum is recorded by this Court in its order dated 26.5.2014. 4. Reply, however, has been filed by respondent No. 1 who has raised several issues. It is submitted that there is collusion between the petitioner and the respondent No. 2 and that they have in connivance with their sons, whom they have employed individually in the partnership firm, have misappropriated large sums from the account of the partnership firm. It is also submitted that a complaint case has been filed against the petitioner, respondent No. 2 and their sons as it was noticed that they had misappropriated a sum of Rs. 65 lakh and the matter is pending before Shri Dharmender Singh, Metropolitan Magistrate, Rohini Courts, Delhi. It is also submitted that respondent No. 1 is a partner of 50% share in the partnership deed and the petitioner and respondent No. 1 are the partners of 25% share in the profit and loss. 65 lakh and the matter is pending before Shri Dharmender Singh, Metropolitan Magistrate, Rohini Courts, Delhi. It is also submitted that respondent No. 1 is a partner of 50% share in the partnership deed and the petitioner and respondent No. 1 are the partners of 25% share in the profit and loss. It is submitted that partnership has suffered loss over the period and both i.e. the petitioner and respondent No. 2 are liable to share the loss. It is also submitted that if the matter is referred to the learned Arbitrator, the Arbitrator would not be in a position to decide his counter claim of recovery against the petitioner, respondent No. 2 and their sons because their sons are not a party to the arbitral clause. On these facts it is submitted that the matter be not referred for arbitration and he be allowed to invoke the jurisdiction of a Civil Court for recovery of the misappropriated amount from petitioner, respondent No. 2 and their sons Pankaj Bagla and Yachin Kadam. 5. Heard. 6. There is no dispute to the fact that there was a partnership agreement between the parties which contains an arbitral clause. The arbitral clause states that in case of a dispute inter se partners, the matter can be referred to the Arbitrator. There is also no dispute to the fact that the petitioner has invoked the said arbitration clause and has asked for appointment of an arbitrator as after his retirement from the partnership, he wants rendition of accounts of the said partnership firm. It is also not disputed that there are disputes existing between the parties which also include certain employees of the partnership. Section 11 of the Arbitration and Conciliation Act confers the jurisdiction upon this Court to appoint an Arbitrator in case the parties fail to agree on the Arbitrator within 30 days from the receipt of the request by one party from the other patty, It is apparent that the parties have raised claims and counter claims touching upon the partnership and there are disputes existing between the partners which, the parties had agreed to be referred to the learned Arbitrator. 7. At this stage, under the law, none of the party is permitted to discard the said arbitration clause and claim that the matter be fought in the Civil Court. 7. At this stage, under the law, none of the party is permitted to discard the said arbitration clause and claim that the matter be fought in the Civil Court. All the terms and conditions of the agreement are equally binding on all the parties to the said agreement. This Court cannot presume at this stage that the Arbitrator would be unable to deal with the disputes arising out of the partnership agreement. There is nothing in law which debars the civil proceedings in the cases where criminal cases are pending between the parties. The filing of an FIR therefore does not debar the petitioner from raising a civil dispute and seeking its resolution. Since the claim has been raised by the petitioner and since in the reply, the respondent No. 1 has also raised counter-claims qua partners, I am of the considered opinion that the matter should be referred pursuant to the arbitral clause to an Arbitrator. The existence of an arbitral clause itself bars the jurisdiction of a Civil Court. In view of the existence of the arbitration clause in the agreement between the parties dated 17.4.2012 I hereby appoint Shri S.K. Tandon (former Additional District Judge) as an Arbitrator to conduct the arbitration under the aegis of the Delhi International Arbitration Centre (DAC), Delhi High Court, New Delhi as per rules. Ordered accordingly.