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2015 DIGILAW 1044 (RAJ)

Lokesh Kumar v. Santra Devi Goyal

2015-05-12

PRAKASH GUPTA

body2015
JUDGMENT 1. - This civil revision petition is preferred against the Order dated 06/05/2014 passed by the Additional District Judge, Tonk (hereinafter referred to as 'the trial Court'), whereby, he dismissed the application filed by the petitioner-defendant No. 1. 2. Brief facts giving rise to this revision petition are that the plaintiff-respondents No. 1 filed a suit for rendition of accounts and permanent injunction against the petitioner and respondents No. 2 to 5. It is pleaded by the plaintiff-respondent that a partnership firm, B.R. Industries, was established on 17/10/1987. In the said firm, husband of the plaintiff-respondent No. 1, was one of the partners. 3. The said firm was reconstituted on 01/04/2003 and further reconstituted on 14/02/2007. As per the the reconstituted partners dated 14/02/2007 partners and their share was mentioned in the plaint and the share of the plaintiff-respondent No. 1 was mentioned as 25%. The said partnership deed was signed by all the partners though one of the partners Babu Lal, died later on 23/09/2007. 4. As per the partnership deed dated 14/02/2007, plaintiff-respondent No. 1 is one of the partner but the defendants started to create hindrance in her participation; more so they did not pay the profits to plaintiff-respondent No. 1 and the statement of accounts. Since the partnership dated 14/02/2007 was at will, plaintiff-respondent No. 1 was served a notice dated 20/03/2008 with regard to dissolution of firm w.e.f. 31/03/2008 and called upon to settle the accounts. However, the defendants were given a reply to the said notice, alleging that the firm was reconstituted on 24/09/2007 and the plaintiff-respondent No. 1 is no more a partner for the adopted son of Mr. Ramesh Chand Goyal, in whose favour even will was executed by Ramesh Chand Goyal is already a partner. However, the plaintiff-respondent No. 1 alleged that the will is forged. The plaintiff sought a declaration that reconstitution of the firm dated 24/09/2007 is void. She claimed to be a partner irrespective of the said deed dated 24/09/2007. 5. The petitioner-defendant No. 1 moved an application on 21/10/2008 under Section 8 of the Arbitration and Conciliation Act, 1996 stating that in view of clause 19 of the partnership deed dated 14/02/2007, produced by the plaintiff in Court, the matter is required to be referred to the Arbitrator and the civil Court cannot entertain the suit. 6. 5. The petitioner-defendant No. 1 moved an application on 21/10/2008 under Section 8 of the Arbitration and Conciliation Act, 1996 stating that in view of clause 19 of the partnership deed dated 14/02/2007, produced by the plaintiff in Court, the matter is required to be referred to the Arbitrator and the civil Court cannot entertain the suit. 6. The plaintiff-respondent No. 1 filed a reply to the application dated 21/10/2008. The learned trial Court vide its Order dated 06/05/2014 rejected the same. Being aggrieved by the aforesaid Order dated 06/05/2014, the petitioner filed the instant revision petition. 7. It is submitted by the learned counsel for the petitioner that plaintiff has based her claim on the basis of the partnership deed dated 14/02/2007 under clause 19 which provides for resolution of dispute by an Arbitrator. Therefore, the matter was required to be referred to the Arbitrator and a suit was not maintainable. As per the partnership deed dated 14/02/2007, all disputes, even dispute with regard to a relief of the partnership deed dated 24/09/2007, could be resolved by an Arbitration clause contained in partnership dated 14/02/2007. He relied upon (2009) 4 SCC 495 Nandan Biomatrix Limited v. Diesel Oils Limited and (2009) 10 SCC 103 Branch Manager, Magma Leasing and Finance Limited and Another. 8. Per contra, learned senior counsel Mr. R.K. Agrawal appearing on behalf of the respondent No. 1, has submitted that the main relief claimed in the suit is that a declaration be made to the effect that the reconstituted partnership deed dated 24/09/2007 was illegal and void as there was no intention or desire on the part of the plaintiff to retire from the partnership. Dispute arising between the partners is not with regard to the partnership deed dated 14/02/2007. The said dispute between the plaintiff and the defendants is related to the partnership deed dated 24/09/2007 in which the plaintiff is not a party. Therefore, the application under Section 8 arbitration was not maintainable and the same was rightly rejected by the learned trial Court. Learned counsel for the respondent relied upon AIR 2008 SC 1016 Atul Singh and Ors. v. Sunil Kumar Singh and Ors. 9. I am not impressed with any submission made by the learned counsel for the petitioner. 10. Therefore, the application under Section 8 arbitration was not maintainable and the same was rightly rejected by the learned trial Court. Learned counsel for the respondent relied upon AIR 2008 SC 1016 Atul Singh and Ors. v. Sunil Kumar Singh and Ors. 9. I am not impressed with any submission made by the learned counsel for the petitioner. 10. The plaintiff claims, amongst other, the following reliefs: "( v ) ;g fd bl vk'k; dh m)?kks"k.kk iznku dh tk;s fd izfroknhx.k }kjk fnukad 24-9-2007 dks fu"ikfnr rFkk dfFkr Hkkxhnkjh foys[k ftlds }kjk QeZ ch0vkj0 b.MLV~ht dk rFkkdfFkr :i ls jhdkUlVhV~;w'ku fd;k x;k o okfnuh dks Hkkxhnkjh ls gVk;k x;k dks izHkko 'kwU;] csvlj] vekU; xSjdkuwuh o voS/k ?kksf"kr fd;k tkos o bl vey dh ?kks".kk dh tkos fd okfnuh 14-2-2007 ds mijkUr Hkkxhnkjh QeZ ch0vkj0 b.MLV~ht esa QeZ ds fo?kVu gksus rd fujUrjrk esa Hkkxhnkj gS o QeZ ds fglkc Qsgeh ds fy, gdnkj gSA ( c ) ;g fd bl vk'k; dh Hkh m)?kks"k.kk dh tkos fd QeZ ch0vkj0 b.MLV~ht dk fnukad 31-3-2008 dks fo?kVu gks pqdk gS okfnuh QeZ dh py vpy lEifRr] ykHk gkfu dk iw.kZ fglkc] cSysUl 'khV o reke fglkc fdrkc izkIr djus dh vf/kdkfj.kh gSA ( l ) ;g fd fglkc Qsgeh (Rendition of Accounts) dh fMdzh oknh ds i{k esa iznku dh tkos ,oa okfnuh dk tks Hkh fgLlk Hkkxhnkjh QeZ ch0vkj0 b.MLV~ht esa curk gS og okfnuh dks fo?kVu rd rFkk rn~mijkUr Hkh tks QeZ ds uke ls vftZr fd;k x;k gS fnyk;k tkos o vko';drk gks rks izkjfEHkd fMdzh Hkh ikfjr dh tkosA " 11. Admittedly, the plaintiff was a partner by virtue of the partnership dated 14/02/2007. No dispute arose between the partners with regard to the partnership deed dated 14/02/2007 but according to the plaintiff subsequently, without any consent, intention or desire of the plaintiff, the plaintiff was retired from the partnership vide partnership deed dated 24/09/2007. Indisputedly, the plaintiff is not a party to the partnership deed dated 24/09/2007. In these facts and circumstances Section 8 of the Arbitration Act, is not at all attracted in the present matter. In case of Atul Singh (supra) Hon'ble Apex Court in almost similar facts observed as under:- "8. In order to appreciate the contention raised by learned counsel for the parties, it will be convenient to set out Sections 7 and 8 of the 1996 Act: 7. In case of Atul Singh (supra) Hon'ble Apex Court in almost similar facts observed as under:- "8. In order to appreciate the contention raised by learned counsel for the parties, it will be convenient to set out Sections 7 and 8 of the 1996 Act: 7. Arbitration agreement.- (1) In this Part, 'arbitration agreement' means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in - (a) a document signed by the parties; (b) an exchange of letter, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. (8) Power to refer parties to arbitration where there is an arbitration agreement. - (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Sub-section (1) of Section 8 of the 1996 Act says that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. Therefore, for application of Section 8, it is absolutely essential that there should be an arbitration agreement between the parties. It is an admitted fact that neither Shri Rajendra Prasad Singh nor the plaintiffs are parties to the partnership deed dated 17.2.1992. there is no document as defined in Section 7 of 1996 Act which may contain the signature of either Shri Rajendra Prasad Singh or the plaintiffs. Similarly, there is no document as contemplated by clause (b) or (c) of sub-section (4) of Section 7 of 1996 Act from which it may be spelled out that either Rajendra Prasad Singh or the plaintiffs were parties to clause relating to arbitration contained in the partnership deed dated 17.2.1992. It is also an admitted fact that Shri Rajendra Prasad Singh was alive when the said partnership deed dated 17.02.1992 was executed. Therefore, on the face of it Section 8 of 1996 Act would not apply to any dispute concerning the said partnership deed dated 17.2.1992 and the matter cannot be referred to arbitration. 9. The first relief claimed by the plaintiffs in the suit is a decree for declaration that the reconstituted partnership deed dated 17.02.1992 was illegal and void and there was no intention or desire of Shri Rajendra Prasad Singh to retire from the partnership and further that the plaintiffs being heirs of Shri Rajendra Prasad Singh will be deemed to be continuing as partners to the extent of his share. It is true that the plaintiffs have also sought rendition of accounts and their share of profits from the partnership as well as interest over the unsecured loan and the principal amount of unsecured loan on rendition of accounts. It is true that the plaintiffs have also sought rendition of accounts and their share of profits from the partnership as well as interest over the unsecured loan and the principal amount of unsecured loan on rendition of accounts. For getting this relief, the plaintiffs undoubtedly rely upon the partnership deed dated 13.1.1989. However, this deed of 1989 could be relied upon and form the basis of the claim of the plaintiffs only if the partnership deed dated 17.2.1992 was declared as void. If the deed dated 17.2.1992 was not declared as void and remained valid and operative, the plaintiffs could not fall back upon the earlier partnership deed dated 13.1.1989 to claim rendition of accounts and their share of profits. Therefore, in order to get their share of profits from the partnership business, it was absolutely essential for the plaintiff appellants to have the partnership deed dated 17.02.1992 declared as illegal, void and inoperative. The relief for such a declaration could only be granted by the civil Court and not by an arbitrator as they or Shri Rajendra Prasad Singh through whom the plaintiffs derive title, are not party to the said deed. The trial Court had, therefore, rightly held that the matter could not be referred to arbitration and the view to the contrary taken by the High Court is clearly illegal." 12. The facts before me are almost identical to the Judgment referred above and hence, covers the matter, in fact and in law, entirely. 13. In the light of this, the trial Court has not illegally exercised its jurisdiction, I find no jurisdictional error in the impugned Order passed by the learned trial Court. This revision petition being devoid of merits, is hence, dismissed.Revision dismissed. *******