JUDGMENT : Akil Abdul Hamid Kureshi, J. 1. Petitioners seek appointment of an arbitrator to resolve the disputes between the petitioners and the respondents arising out of a partnership agreement dated 19.02.2010. 2. Brief facts are as under: "Under the said partnership agreement, six partners i.e. the present petitioners and respondents in defined shares joined together to form a partnership for a partnership business in the name of M/s. Navdurga Tobaco Company. Main business of the firm would be to process and sale processed tobacco and for dealing in tobacco on commission. It is not in dispute that the agreement contained an arbitration clause which, when translated in English, would read as under: "If in relation to the work of the partnership business or in relation to any other matter between the partners any dispute arises, the same could be resolved through arbitration and not through the Court process." 3. Since multiple disputes arose between the two sets of partners, the present petitioners issued a notice dated 12.05.2016. In such notice, they made multiple allegations of misfeasance and misapplication of partnership funds by the respondents. The petitioners, therefore, under the said notice conveyed to the respondents as under: "13. It is submitted that Accounts of M/s. Navdurga Tobacco Co., a Partnership firm are not yet settled between the parties by duly inquiry and investigations, and that My clients want Dissolution of this Partnership firm as the duration of Partnership is at Will as per clause 5 of the Partnership Deed. My client is entitled to seek the Dissolution of Firm and also is entitled to seek details of proper accounts as per the provisions of Indian Partnership Act. It is submitted that the Deed of Partnership contains Arbitration Clause viz. Clause 16 which says that if there are any differences or disputes between the partners then the same are to be resolved by Arbitration. 14. My client hereby call upon you to dissolve the partnership firm viz. M/s. Navdurga Tobacco Company, which as per section 43(2) stands dissolved on the date of this notice or on the date of receipt of this notice by you. 14. My client hereby call upon you to dissolve the partnership firm viz. M/s. Navdurga Tobacco Company, which as per section 43(2) stands dissolved on the date of this notice or on the date of receipt of this notice by you. My clients hereby call upon for settlement of accounts of the said partnership firm and for that my client intends to appoint arbitrators to settle the accounts of the said partnership firm in full and final so that the liabilities of the firm are completely settled and that all the partners get their respective share from the said partnership firm from surplus if any after settling all liabilities. My clients herby also call upon you to bring back all the amounts that you No. 1 have withdrawn from the said partnership firm by making payments for your personal use without the knowledge of my clients. 15. Should you fail to comply then having no choice my client would initiate legal proceedings under Arbitration and Conciliation Act to refer to his grievance to an Arbitrator duly appointed for the purpose of resolving the dispute referred herein-above viz. Dissolution of M/s. Navdurga Tobacco Co. a partnership firm and settlement of accounts of said firm as on Dissolution. My client hereby brings to your notice that they wants to appoint any one of following person as Arbitrator from their side, for deciding the disputes between the partners in regard to dissolution of the said partnership firm and also in regard to settlement of accounts of the said firm till the date of dissolution. The names of the persons suggested by my clients are as under: 1. Mr. Kamleshbhai Manubhai Patel Village Khambholja Tal and District Anand 2. Mr. Lalitbhai R. Mehta Chartered Accountant 1st Floor, Prasanna House, Opp. Radha Krishna Park, Akota, Vadodara 3. Mr. Prakashbhai K. Gandhi B. Com. LL.B tax Advocate 207, Paradise Complex, Sayajigunj, Vadodara. 16. You are therefore called upon to either comply with this notice and or give your consent for the appointment of the any of one person from the above three persons as Sole Arbitrator for resolving the disputes between the parties or in the alternative you are called upon to suggest the name of person as Arbitrator from your side within 30 days from the date of receipt of this notice. 17. 17. Should you fail to comply with this Notice then my clients shall approach Honourable High Court of Gujarat and will file a petition for appointment of Arbitrator for resolving the disputes between the parties for which you shall be solely responsible as to costs and consequences which please note." 4. Thus, under the said notice the petitioners contended that the partnership was a partnership at will. That the accounts of the partnership were not being settled. The petitioners therefore, dissolved the partnership and would raise their claims before the arbitrator. The petitioners suggested names of three arbitrators for the respondents to concur within the specified time, failing which, the petitioners would approach High Court for appointment of an arbitrator. 5. The respondents strongly opposed the said notice by filing a reply dated 26.05.2016. All the contentions in the notice of the petitioners were denied. In particular, it was contended that previously, arbitration proceedings had already been undertaken. As a culmination of such arbitration, an MOU was also signed by both sides. It was also contended that since the allegations of fraud are involved, the same cannot be decided by the arbitrator. They also opposed the names of the arbitrators suggested by the petitioners. Relevant portion of the said reply reads as under: "38. In the above said facts and circumstances of the case, it is not at all necessary to respond to your notice for appointment of Arbitrator. As this is a case of fraud played by your clients. The Arbitrator cannot detect and decide the fraudulent Acts of the parties, as there being criminal elements is involved. 39. It is also a fact that the process of settlement done in the month of May 2014 was a process of Mediation and Arbitration, and it has resulted in to MOU dated 19/05/2014, and the same was signed and was lying with Mr. Lalit R. Mehta, but as now you do not want to act upon that MOU, you have not referred the same in your notice. And as my client do not have the copy of that MOU, my client is helpless. And as Mr. Lalit R. Mehta is involved with your case on your side he has straight way refused to give the copy of such MOU, and he refuses to admit existence of any such MOU. 40. And as my client do not have the copy of that MOU, my client is helpless. And as Mr. Lalit R. Mehta is involved with your case on your side he has straight way refused to give the copy of such MOU, and he refuses to admit existence of any such MOU. 40. So for as other names proposed as Arbitrator by you are equally favoring of your side. Mr. Kamleshbhai Manubhai Patel is near relative, and his Khari (Godown for process and storage of Tobacco) is always used for the purpose of business of Navdurga Tobacco Products. Mr. Prakashbhai Gandhi, being witness in the deeds of partnership firms, and for many other reasons is equally not fit and eligible person to act as Arbitrator for the parties, as he is not independent and neutral. However as the issues of financial fraud and mismanagement and criminal breach of trust, are not arbitral issues, the appointment of arbitrator is not a question to be discussed." 6. At this stage, this arbitration petition came to be filed. In reply to the notice issued, the respondents have appeared and filed an affidavit dated 25.08.2016 opposing appointment of an arbitrator. In such reply, it is contended inter alia that the arbitration petition is premature since no disputes have arisen regarding settlement of the accounts. It is pointed out that the respondents have already instituted Special Civil Suit No. 220 of 2016 seeking partition of the ancestral properties and joint properties of various businesses including the business carried out by the present partnership firm. The suit involves several persons other than the parties to this proceeding. In such suit, the plaintiffs i.e. the present respondents have sought direction for providing accounts of the family business and also of the partnership business. It is pointed out that the suit was filed before the Civil Court on 02.06.2016. The present arbitration petition was filed on 06.06.2016 but the factum of filing of the civil suit was not disclosed in such arbitration petition. It is pointed out that the present petitioners have moved an application under section 8 of the Arbitration and Conciliation Act before the Civil Court seeking reference of the disputes arising in the said suit to an arbitrator. The petitioners thus have suppressed material facts in the present arbitration petition. It is pointed out that the present petitioners have moved an application under section 8 of the Arbitration and Conciliation Act before the Civil Court seeking reference of the disputes arising in the said suit to an arbitrator. The petitioners thus have suppressed material facts in the present arbitration petition. It is further pointed out that any reference to the arbitrator in the present proceedings would fragment the pending suit and the causes of action therein. 7. The petitioners have filed rejoinder affidavit pointing out that there was no attempt to withhold relevant facts from the Court. The arbitration petition was notorized on 01.06.2016 even before filing of the civil suit. It is contended that dissolution or of the firm is an arbitrable issue. The petitioners also seek settlement of accounts. 8. An additional affidavit came to be filed by the respondents on 08.09.2016, in which, further following grounds for opposing the arbitration petition have been raised: "(i) Under notice dated 12.05.2016, the petitioners have already resorted to dissolution of the partnership firm and have sought reference to the arbitrator for settlement of accounts which is not permissible; (ii) In fact, the respondents contend that the partnership firm was not subject to dissolution at the hands of the petitioners under the prevailing circumstances. The reference to the arbitration would involve other persons who are not parties to the arbitration agreement;" 9. On behalf of the respondents, learned advocate Mr. Harshadray A. Dave raised following contentions: "(i) The arbitration petition is premature since the petitioners themselves had not provided certain documents pertaining to accounts as demanded by the respondents in the reply dated 26.05.2016. In any case earlier arbitration was conducted and concluded resulting into signing of an MOU. (ii) The arbitration petition is not maintainable because the dissolution of the partnership firm itself is in dispute; (iii) There cannot be arbitration for settlement of accounts; (iv) The partnership was an unregistered partnership firm and therefore, the arbitration proceedings would not be maintainable and therefore, arbitration application or the arbitration proceedings would not be maintainable; (v) In view of serious allegations of fraud, it is only the Civil Court which can appropriately decide all the issues. The reference to arbitration therefore cannot be made; (vi) Reference to the arbitrator would bifurcate the prayers and causes of action in pending suit instituted by the respondents; (vii) In support of his contentions, counsel relied on following decisions: • In case of Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd. reported in AIR 1964 SC 1882 in which, it was held that under section 69(3) of the Partnership Act, a claim of set off would be covered by the expression 'other proceeding' and therefore, would not be maintainable in respect of an unregistered partnership firm. • In support of this contention reference was also made to the decision in case of Mohd. Monirul Hasan and Ors. v. Mohd. Iftikar Ahmed and Ors. reported in AIR 2000 Gauhati 108 and in case of U.P. State Sugar Corporation Ltd. v. Jain Construction co. and anr. reported in AIR 2004 SCC 4335. Reference was also made to the decision of learned Single Judge of this Court in case of Kirtikumar Fakirchand Mehta v. Dilipkumar Jayantilal Sanghvi in Special Civil Application No. 1973 of 2013 in which following observations were made: "11. Considering the above referred discussions made by this court and considering the fact of the case of Prabhu Shankar Jaiswal (supra) and the ultimate ratio derived by the Hon'ble Supreme Court, I am of the view that the ratio of the said case is not applicable to the present subject matter as discussed hereinabove and I am of the view that the trial court has miserably failed in coming to the conclusion that the subject matter in dispute is covered by the judgment reported in Prabhu Shankar Jaiswal (supra). As per the case of the petitioners, the partnership is partnership at will, and as per clause 9 of the partnership deed and, in light of the provisions of section 43 of the Indian Partnership Act, 1932, the firm shall stand dissolved on issuance of notice. As discussed hereinabove, the respondents have disputed the dissolution. Thus, I am of the view that when the dissolution itself is in dispute, the matter cannot be referred to the arbitrator as the firm is unregistered and in view of the same, these Special Civil Applications are allowed and the impugned order dated 30.1.2013 passed below Exhs. As discussed hereinabove, the respondents have disputed the dissolution. Thus, I am of the view that when the dissolution itself is in dispute, the matter cannot be referred to the arbitrator as the firm is unregistered and in view of the same, these Special Civil Applications are allowed and the impugned order dated 30.1.2013 passed below Exhs. 18 and 21 in Civil Suit No. 2813/2012 and Civil Suit No. 2814 of 2012 and the order dated 30.1.2013 passed below Exhs. 17 and 20 in Civil Suit No. 2815 of 2012 are being illegal, unjust and against the settled principles of law and are liable to be set aside and are accordingly set aside." • Decision of learned Single Judge of this Court in case of Mohanlal Sajandas v. Hareshkumar Narandas and ors. reported in 2001 (3) GLH 532 was referred to in support of the contention that even if the partnership deed contained an arbitration clause, the same cannot be invoked once the intention is shown by either of the partners to put an end of the partnership firm. In the said case, it was found that one of the partners had dissolved the partnership. It was therefore held that thereafter the arbitration clause would not operate and cannot be invoked by the parties. • In case of Sukanya Holding Pvt. Ltd. v. Jayesh H. Pandya and Anr. reported in AIR 2003 2252 in which in the context of section 8 of the Act, it was observed that the word 'matter' used in section indicates that entire subject matter of the suit should be subject to arbitration agreement." 10. On the other hand, learned advocate Mr. D.D. Vyas for the petitioners opposed this petition contending that: "(i) Admittedly, there is an arbitration clause in the partnership agreement. Disputes have arisen between the parties. The petitioners, therefore have a right to resort to arbitration. In fact, in case of disputes arising, arbitration being compulsory, the respondents could not have filed a civil suit regarding the subject matter of the partnership disputes. (ii) Counsel submitted that mere allegations of fraud would not take away the jurisdiction of the arbitrator to decide the disputes; (iii) He contended that the partnership has already been dissolved. The respondents refused to supply the accounts. (ii) Counsel submitted that mere allegations of fraud would not take away the jurisdiction of the arbitrator to decide the disputes; (iii) He contended that the partnership has already been dissolved. The respondents refused to supply the accounts. Even if in case of unregistered partnership firm, suit for settlement of the accounts would be maintainable; (iv) Counsel submitted that merely because the respondents have instituted a suit to frustrate the arbitral proceedings, it would not enable them to avoid the arbitration; (v) In support of his contention, counsel relied on the following decisions: • The decision of Supreme Court in case of Prabhu Shankar Jaiswal v. Sri Sheo Narain Jaiswal reported in 1996 11 SCC 225 in which, it was held that under section 69(3)(a) of the Partnership Act, the bar will not affect the enforcement of any right to sue for the dissolution of a firm or for accounts of the dissolved firm or any right or power to realize the property of a dissolved firm; • The case of Prem Lata v. Ishar Dass Chaman Lal reported in AIR 1995 (714) was cited for the same purpose; • For the same purpose a reference was also made to the decision of this Court dated 20.07.2012 in Arbitration Petition No. 41 of 2010 in case of Aziz M. Bandi Partner v. Kantibhai Gobarbhai Chaudhary and Anr.; • Reference was also made to the decision of Supreme Court in this respect in case of M/s. Umesh Goel v. Himachal Pradesh Cooperative Group Housing Society Ltd. in Civil Appeal No. 7916 of 2009; • Decision in case of Swiss Timing Limited v. Organising Committee, Commonwealth Games 2010, Delhi reported in 2014 (6) SCC 677 was cited to contend that the parties having agreed that arbitration would be the dispute resolution mechanism now cannot resile from the same. • Decision in case of Jiten P. Mody and Ors. v. Associated Cement Company was referred to contend that by virtue of the amendments of the Arbitration and Conciliation Act, by amending Act 2005, the scope for rejecting an arbitration petition has been considerably narrowed down. • Decision in case of Sirajuddin Kasim and Anr. v. Paramount Investment Ltd. reported in 2010 AIR (SCW) 5621 was cited to point out that the decision in case of Sukanya Holding Pvt. Ltd. has been considered and explained in the said decision. 11. • Decision in case of Sirajuddin Kasim and Anr. v. Paramount Investment Ltd. reported in 2010 AIR (SCW) 5621 was cited to point out that the decision in case of Sukanya Holding Pvt. Ltd. has been considered and explained in the said decision. 11. Counsel clarified that the application under section 8 of the Arbitration and Conciliation Act filed by the present petitioners before the Civil Court has been withdrawn in view of the present pending proceedings. 12. It can thus be seen that the respondents have raised following five objections for appointment of an arbitrator: "(i) The partnership having been dissolved, there cannot be arbitration for settlement of accounts since the arbitration clause does not cover such an eventuality; (ii) Earlier arbitration had taken place which led to signing of MOU. Fresh arbitration, therefore, cannot be permitted; (iii) There are serious allegations of fraud. Only Civil Court can examine the issue; (iv) Since the partnership is an unregistered partnership firm, neither the present application nor arbitration proceedings are maintainable; (v) The respondents have filed a civil suit in which one of the issues pertain to the partnership business. The suit concerns several other joint family properties and involves other persons who are not parties to the arbitration agreement. Any reference to the arbitration would fragment the proceeding arising in the said civil suit." 13. We may deal with the objections one after another. With respect to the objection based on dissolution of the partnership, it may be noted that though according to the petitioners, the partnership was a partnership at will and therefore open to dissolution by a notice by either side and the petitioners had invoked such a dissolution clause, the respondents have strongly disputed this aspect. The respondents in their reply to the notice issued by the petitioner as well as in the additional affidavit dated 08.09.2016 filed in the present proceedings, have taken a stand that the partnership could not have been dissolved by the petitioners under the present circumstances. Thus, the respondents dispute the very factum of dissolution of the partnership. Their stand that the partnership having been dissolved, no arbitration can take place is thus self contradictory. 14. Further, the reliance on the decision of the learned Single Judge of this Court in case of Mohanlal Sajandas v. Hareshkumar Narandas and Ors. in this respect also would not be valid. Their stand that the partnership having been dissolved, no arbitration can take place is thus self contradictory. 14. Further, the reliance on the decision of the learned Single Judge of this Court in case of Mohanlal Sajandas v. Hareshkumar Narandas and Ors. in this respect also would not be valid. In the said case, the partnership was the partnership at will. The partnership contained an arbitration clause. After dissolution of the partnership, one of the partners sought to raise an arbitral dispute. The other side contended that the partnership had come to an end upon dissolution and that therefore, in absence of any subsisting partnership, arbitration clause contained in the partnership deed could not be pressed in service. The learned Single Judge upheld this contention making following observations: "11. In the facts and circumstances, in my opinion, the present petition is not maintainable. It is not in dispute by and between the parties that partnership firm was entered into between the parties. It is also undisputed that partnership was partnership at will. In accordance with provisions of the Partnership Act, therefore, such partnership could be dissolved by any partner at any time. Only thing required was that there must be an intention on the part of such partner to bring to an end the partnership. From various documents placed on record, in my opinion, it is clearly established that respondent No. 1 has conveyed his intention to the petitioners that partnership firm shall be deemed to be dissolved and accordingly, it stood dissolved with effect from 31st March, 1999. If any question has arisen thereafter, such question cannot be said to have arisen during or in the course of partnership business,. Such dispute obviously cannot be dealt with, settled or decided in accordance with clause 21 of the partnership deed inasmuch as after the dissolution of partnership, that clause would not operate and cannot be invoked by the parties. Since the contention of the learned advocate for respondent No. 1 that partnership firm was dissolved after 31st March, 1999 is well founded, the present petition filed by the petitioners is not maintainable and deserves to be dismissed." 15. The concept that the arbitration clause surviving even after the contract is terminated is a well established principle. In case of Swiss Timing Limited v. Organising Committee, Commonwealth Games 2010, Delhi (supra), the Supreme Court observed as under: "26. The concept that the arbitration clause surviving even after the contract is terminated is a well established principle. In case of Swiss Timing Limited v. Organising Committee, Commonwealth Games 2010, Delhi (supra), the Supreme Court observed as under: "26. As noticed above, the concept of separability of the arbitration clause/agreement from the underlying contract has been statutorily recognised by this country under Section 16 of the Arbitration Act, 1996. Having provided for resolution of disputes through arbitration, parties can not be permitted to avoid arbitration, without satisfying the Court that it will be just and in the interest of all the parties not to proceed with the arbitration. Section 5 of the Arbitration Act provides that the Court shall not intervene in the arbitration process except in accordance with the provisions contained in Part I of the Arbitration Act. This policy of least interference in arbitration proceedings recognises the general principle that the function of Courts in matters relating to arbitration is to support arbitration process. A conjoint reading of Section 5 and Section 16 would make it clear that all matters including the issue as to whether the main contract was void/voidable can be referred to arbitration. Otherwise, it would be a handy tool available to the unscrupulous parties to avoid arbitration, by raising the bogey of the underlying contract being void." 16. In any case, in the said case of Mohanlal Sajandas v. Hareshkumar Narandas and ors., the arbitration clause was worded such that, in case of difference or dispute, the matter shall be settled by arbitrator in accordance with the provisions of Arbitration and Conciliation Act, 1996. This clause was seen by the learned Single Judge as not available after termination of the partnership itself. It was held that any question arising after dissolution of the firm cannot be said to have arisen during the course of partnership business. In the case on hand, before me, the phraseology used in the arbitration agreement is very wide. As noted, it provides that if in relation to the work of partnership business or in relation to any other matter between the partners, any dispute arises, the same would be resolved through arbitration and not through the court process. In the case on hand, before me, the phraseology used in the arbitration agreement is very wide. As noted, it provides that if in relation to the work of partnership business or in relation to any other matter between the partners, any dispute arises, the same would be resolved through arbitration and not through the court process. This arbitration clause thus envisaged arbitration as compulsory mode of resolving disputes between the partners in relation to the work of the partnership business or in relation to any other matter between the partners. Questions of valid termination of the partnership and of settlement of accounts would certainly fall within the expression "disputes in relation to any other matter between the partners". 17. Regarding the earlier arbitral proceedings and drawing of MOU as a result of it, there is no material on record for me to accept such a contention. No document, no correspondence, no Email even suggesting any such previous arbitral proceedings which might have led to signing of MOU are produced on record. Such allegation is, therefore, not established and cannot be accepted. 18. Regarding the allegations of fraud, I may only refer to a recent judgement of the Supreme Court in case of A. Ayaasamy v. A. Paramasivam and Ors. reported in (2016) 10 SCC 386 . Two judge bench of the Supreme Court considered the question of a reference to the arbitrator in the background of allegations of fraud made by one side or the other. The decision in case of N. Radhakrishnan v. Maestro Engineers and Ors. reported in (2010) 1 SCC 72 was noticed and explained. It was held that mere allegation of fraud simply is not a ground to nullify the fact of arbitration agreement between the parties. The arbitration cannot be avoided on simple allegation of fraud touching upon internal affairs of the parties inter se which have no implication in public domain. reported in (2010) 1 SCC 72 was noticed and explained. It was held that mere allegation of fraud simply is not a ground to nullify the fact of arbitration agreement between the parties. The arbitration cannot be avoided on simple allegation of fraud touching upon internal affairs of the parties inter se which have no implication in public domain. It was observed that court may refuse a reference to the arbitration only where court finds very serious allegation of fraud that make a virtual case of criminal offence or where allegations of fraud are so complicated that it has become essential that such allegations can be decided only by a civil court through appreciation of voluminous evidence or where serious allegation of forgery/fabrication of documents in support of the plea of fraud are brought on record or where fraud is alleged against arbitration provision itself or where fraud alleged permeates the entire contract including the agreement for arbitration. Dr. D.Y. Chandrachud, J., in supplementing and concurring judgement observed that ordinarily, every civil or commercial dispute whether based on contract or otherwise which is capable of being decided by a civil court is in principle capable of being adjudicated upon and resolved by arbitration subject to the dispute being governed by the arbitration agreement unless jurisdiction of the Arbitral Tribunal is excluded either explicitly or by necessary implication. It was observed as under: "45. The position that emerges both before and after the decision in N. Radhakrishnan is that successive decisions of this Court have given effect to the binding precept incorporated in Section 8. Once there is an arbitration agreement between the parties, a judicial authority before whom an action is brought covering the subject matter of the arbitration agreement is under a positive obligation to refer parties to arbitration by enforcing the terms of the contract. There is no element of discretion left in the court or judicial authority to obviate the legislative mandate of compelling parties to seek recourse to arbitration. The judgment in N. Radhakrishnan has, however, been utilised by parties seeking a convenient ruse to avoid arbitration to raise a defence of fraud. There is no element of discretion left in the court or judicial authority to obviate the legislative mandate of compelling parties to seek recourse to arbitration. The judgment in N. Radhakrishnan has, however, been utilised by parties seeking a convenient ruse to avoid arbitration to raise a defence of fraud. 45.1 First and foremost, it is necessary to emphasise that the judgment in N. Radhakrishnan does not subscribe to the broad proposition that a mere allegation of fraud is ground enough not to compel parties to abide by their agreement to refer disputes to arbitration. More often than not, a bogey of fraud is set forth if only to plead that the dispute cannot be arbitrated upon. To allow such a plea would be a plain misreading of the judgment in N. Radhakrishnan. As I have noted earlier, that was a case where the appellant who had filed an application under Section 8 faced with a suit on a dispute in partnership had raised serious issues of criminal wrongdoing, misappropriation of funds and malpractice on the part of the respondent. It was in this background that this Court accepted the submission of the respondent that the arbitrator would not be competent to deal with matters "which involved an elaborate production of evidence to establish the claims relating to fraud and criminal misappropriation". Hence, it is necessary to emphasise that as a matter of first principle, this Court has not held that a mere allegation of fraud will exclude arbitrability. The burden must lie heavily on a party which avoids compliance with the obligation assumed by it to submit disputes to arbitration to establish the dispute is not arbitrable under the law for the time being in force. In each such case where an objection on the ground of fraud and criminal wrongdoing is raised, it is for the judicial authority to carefully sift through the materials for the purpose of determining whether the defence is merely a pretext to avoid arbitration. It is only where there is a serious issue of fraud involving criminal wrongdoing that the exception to arbitrability carved out in N. Radhakrishnan may come into existence. 45.2 Allegations of fraud are not alien to ordinary civil courts. Generations of judges have dealt with such allegations in the context of civil and commercial disputes. It is only where there is a serious issue of fraud involving criminal wrongdoing that the exception to arbitrability carved out in N. Radhakrishnan may come into existence. 45.2 Allegations of fraud are not alien to ordinary civil courts. Generations of judges have dealt with such allegations in the context of civil and commercial disputes. If an allegation of fraud can be adjudicated upon in the course of a trial before an ordinary civil court, there is no reason or justification to exclude such disputes from the ambit and purview of a claim in arbitration. Parties who enter into commercial dealings and agree to a resolution of disputes by an arbitral forum exercise an option and express a choice of a preferred mode for the resolution of their disputes. Parties in choosing arbitration place priority upon the speed, flexibility and expertise inherent in arbitral adjudication. Once parties have agreed to refer disputes to arbitration, the court must plainly discourage and discountenance litigative strategies designed to avoid recourse to arbitration. Any other approach would seriously place in uncertainty the institutional efficacy of arbitration. Such a consequence must be eschewed." 19. In the present case, respondents have merely raised some general and unspecific allegations of fraud seeking to oppose reference to the arbitrator. Such general and vague allegations would not be sufficient to override the arbitration clause which requires that in case, any dispute arises between the parties, the parties will not resort to civil court. Proceedings instead, will be resolved through arbitration. The Courts always recognize the internal autonomy of the arbitration mechanism if the parties in a contract have agreed to the same. Section 8 and 11 of the Arbitration Act are manifestation of such contracts being respected and implemented by the Court whenever situation arises. As held and observed by the Supreme Court in above referred case in A. Ayaasamy v. A. Paramasivam and Ors. (supra), the Court would be slow in overriding an arbitration clause in an agreement between the parties on a mere ground of alleged fraud. 20. The partnership firm is undoubtedly an unregistered partnership. However, by virtue of series of judgements it is held that sub section (3) of section 69 would ensure that for certain limited purposes suits would be maintainable even in respect of unregistered partnership also. These would include the suits for dissolution of the firm and for accounts. 20. The partnership firm is undoubtedly an unregistered partnership. However, by virtue of series of judgements it is held that sub section (3) of section 69 would ensure that for certain limited purposes suits would be maintainable even in respect of unregistered partnership also. These would include the suits for dissolution of the firm and for accounts. In this respect, reference can be made to the following judgements: • In case of Prabhu Shankar Jaiswal v. Sri Sheo Narain Jaiswal (supra) it was observed as under: "4. Our attention was drawn to the case of Jagdish Chandra Gupta v. Kajaria Traders (India) LTD. (AIR SC 1882) where this Court has held that the word "proceedings' in the first part of sub-section (3) must be widely construed to include proceedings in arbitration. The exception carved out under subsection (3)(a) would equally apply to such proceedings. The dispute, however, in that case between the partners did not relate to dissolution or accounts of the partnership firm. Hence a resort to the exception under sub-section (3)(a) was not required. In fact, this aspect was neither argued nor considered by this Court in that case. This question directly arose in Prem Lata's case (supra). This Court has held that a suit under Section 20 of the Arbitration Act was maintainable under the exception carved out in sub-section (33(a) of Section 69 of the Indian Partnership Act. Hence where arbitration is sought under the arbitration clause in a partnership deed of an unregistered firm for the of dissolution and accounts of the partnership Firm, the partners can maintain all applications/petitions under the Arbitration Act for the purpose of enforcing their right to secure dissolution and accounts of the partnership firm through arbitration. In fact, in the present case the suit for dissolution and accounts of the partnership firm has been stayed under Section 34 of the Arbitration Act at the instance of respondent No. 1. The petition of the appellant, therefore, under Section 8 of the Arbitration Act is maintainable in the present case." • In case of M/s. Umesh Goel v. Himachal Pradesh Cooperative Group Housing Society Ltd. (supra), it was observed as under: "12. The petition of the appellant, therefore, under Section 8 of the Arbitration Act is maintainable in the present case." • In case of M/s. Umesh Goel v. Himachal Pradesh Cooperative Group Housing Society Ltd. (supra), it was observed as under: "12. The question for our consideration is by virtue of subsection (3) whether the expression "other proceedings" contained therein will include Arbitral proceedings and can be equated to a suit filed in a Court and thereby the ban imposed against an unregistered firm can operate in the matter of arbitral proceedings. If sub-sections (1) and (2) are virtually lifted whole hog and incorporated in sub-section (3), it must be stated that it is not the mere ban that is imposed in sub-sections (1) and (2) that alone is contemplated for the application of sub-section (3). In other words, when the whole of the ingredients contained in sub-sections (1) and (2) are wholly incorporated in subsection (3), the resultant position would be that the ban can operate in respect of an unregistered firm even relating to a set off or other proceedings only when such claim of set off or other proceedings are intrinsically connected with the suit that is pending in a Court. To put it differently, in order to invoke subsection (3) of Section 69 and for the ban to operate either the firm should be an unregistered one or the person who wants to sue should be a partner of an unregistered firm, that its/his endeavour should be to file a suit in a Court, in which event even if it pertains to a claim of set off or in respect of 'other proceedings' connected with any right arising from a contract or conferred by the Partnership Act which is sought to be enforced through a Court by way of a suit then and then alone the said sub-section can operate to its full extent. 13. As far as the construction of the said sub-section (3) of Section 69 is concerned, we are able to discern the above legal position without any scope of ambiguity. 13. As far as the construction of the said sub-section (3) of Section 69 is concerned, we are able to discern the above legal position without any scope of ambiguity. To be more precise, the condition precedent for the operation of ban under subsection (3) is that the launching of a suit in a Court of law should be present and it should be by an unregistered firm or by a person claiming to be partner of an unregistered firm either to a claim for set off in the said suit or any other proceedings intrinsically connected with the said suit. 14. In the event of the above ingredients set out under subsections (1), (2) and (3) being fulfilled then and then alone the ban prescribed against an unregistered firm under Section 69(1), (2) and (3) would operate and not otherwise. 15. Keeping the above outcome of the legal position that can be derived from a reading of sub-sections (1), (2) and (3) of Section 69 in mind we can draw further conclusions by making specific reference to sub-clauses (a) and (b) of sub-section (3) as well as the exceptions set out in sub-clauses (a) and (b) of sub-section (4) as well. When under sub-section (3) which also relates to a ban concerning 'other proceedings', the law makers wanted to specifically exclude from such ban such of those proceedings which also likely to arise in a suit, but yet the imposition of ban of an unregistered firm need not be imposed. Keeping the said intent of the law makers in mind, when we read sub-clauses (a) and (b) of sub-section (3), it can be understood that even though such other proceedings may be for the enforcement of any right to sue but yet if it is for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realize the property of a dissolved firm, the same can be worked out by way of a suit in a Court or by way of other proceedings in that suit and the same will not be affected by the ban imposed under sub-section (3). Similarly, any steps initiated at the instance of an official assignee, a receiver or Court under the Presidency-Towns Insolvency Act of 1909 (3 of 1909) or the Provincial Insolvency Act of 1920 (5 of 1920) to realize the property of an insolvent partner in a pending suit of a Court also stand excluded from the ban imposed under sub-section (3). The specific exclusions contained in clauses (a) and (b) of sub-section (3) therefore makes the position clear to the effect that even though such proceedings may fall under the expression "other proceedings" and may be intrinsically connected with a suit in a Court, yet the ban would not operate against such proceedings. When we read sub-section (4), the ban imposed under sub-sections (1), (2) and (3) will have no application to any of those proceedings set out in sub-clauses (a) and (b) of the said sub-section (4). A specific reference to sub-clause (b) of sub-section (4) disclose that in the last part of the said sub-clause it is specifically provided that other proceedings incidental to or arising from any suit or claim of set off not exceeding Rs. 100 in value under those specific statute referred to in the said sub-clause can also be launched without any ban being operated as provided under sub-sections (1), (2) and (3). The said part of sub-clause (b) of sub-section (4) thus gives a vivid picture as to the position that the 'other proceeding' specified in the said sub-section can only relate to a pending suit in a Court and not to any other different proceeding which can be categorized as 'other proceedings'. • In case of Aziz M. Bandi Partner v. Kantibhai Gobarbhai Chaudhary and anr. (supra), Single Judge of this Court observed as under: "17. With respect to the question of maintainability of the arbitration proceedings in case of an unregistered partnership firm, a few decisions of the Apex Court as well as High Courts have been brought to my notice. Counsel for the respondents relied on the decision of the Bombay High Court in the case of Chandulal Hathibhai Shah v. Champaklal Ambalal Parikh, AIR 1994 Bombay 16, in which it was held that in terms of section 69(1) of the Partnership Act, no suit can be filed by one partner of a firm against another partner to enforce a right arising from a contract unless the firm is registered. Such bar is extended by section 69(3) to other proceedings to enforce a right arising from a contract. An arbitration petition is a proceeding to enforce a right arising from a contract between the two partners. In case of an unregistered firm, such arbitration proceedings would not be maintainable. 18. This may be in general terms the correct proposition of law. However, as would be clear from the discussion hereinafter made, bar of section 69 under the Partnership Act is not absolute. Section 69 does not bar all proceedings concerning an unregistered partnership firm. In the case of Prem Lata v. Ishar Dass Chaman Lal, (1995) 2 SCC 145 , the Apex Court held that a party can enforce a right by a suit for rendering accounts and for realisation of the property of the dissolved firm by virtue of exception carved out in sub-section (3)(a) of section 69 of the Partnership Act. For such purpose, therefore, arbitration proceedings would be maintainable. The Supreme Court held as under : "10. It is fairly stated by Shri Satish Chandra that the party can enforce the right by a suit for rendering accounts and for realisation of the property of the dissolved firm pro rata. When that is permissible by an exception carved out by sub-section (3)(a) to S. 69, we are of the view that there is no prohibition to invoke arbitration clause under the deed of partnership, agreed to by and between the parties to invoke S.20 of the Act. Thus considered, we are of the view that the suit under S.20 of the Act is maintainable. The High Court has, therefore, committed manifest error of law in holding otherwise." Likewise in the case of Prabhu Shankar Jaiswal v. Sheo Narain Jaiswal, (1996) 11 SCC 225 , the Apex Court held that arbitration proceedings for dissolution and for taking accounts of an unregistered partnership firm would be maintainable. It was held as under: "6. Under sub-section (3)(a) this bar will not affect the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm. Therefore, although the partnership firm may be unregistered, one partner can sue other partners for dissolution of the firm and for accounts. Therefore, although the partnership firm may be unregistered, one partner can sue other partners for dissolution of the firm and for accounts. The words "to sue" used in subsection (3)(a) cannot be construed narrowly to refer only to suits for dissolution of partnership and accounts. The exception contained in subsection (3)(a) applies not merely to sub-sections (1) and (2) but also to the first part of sub-section (3) which deals with proceedings other than suits. Therefore, in order that sub-section (3)(a) would apply to all these provisions, the words "to sue" section (3)(a) must be understood as applying to any proceedings for dissolution of partnership or for accounts of a dissolved firm or to realise the property of a dissolved firm. This proceeding may be either by way of a suit or it can even be a proceeding under the Arbitration Act to secure these rights through arbitration. [Vide Prem Lata (Smt)] & Anr. v. M/s. Ishar Dass Chaman & Ors. ( 1995 2 SCC 145 ), a judgment to which one of us was a party.] Therefore, an arbitration clause in a partnership deed of an unregistered partnership can be enforced for the purpose of securing, inter alia, a dissolution and accounts of the partnership or for enforcing any right or power for obtaining the property of a dissolved firm. 7. Our attention was drawn to the case of Jagdish Chandra Gupta v. Kajaria Traders (India) LTD (AIR SC 1882) where this Court has held that the word "proceedings' in the first part of sub-section (3) must be widely construed to include proceedings in arbitration. T he exception carved out under sub-section (3) (a) would equally apply to such proceedings. The dispute, however, in that case between the partners did not relate to dissolution or accounts of the partnership firm. Hence a resort to the exception under sub-section (3)(a) was not required. In fact, this aspect was neither argued nor considered by this Court in that case. This question directly arose in Prem Lata's case (supra). This Court has held that a suit under Section 20 of the Arbitration Act was maintainable under the exception carved out in sub-section (33)(a) of Section 69 of the Indian Partnership Act. In fact, this aspect was neither argued nor considered by this Court in that case. This question directly arose in Prem Lata's case (supra). This Court has held that a suit under Section 20 of the Arbitration Act was maintainable under the exception carved out in sub-section (33)(a) of Section 69 of the Indian Partnership Act. Hence where arbitration is sought under the arbitration clause in a partnership deed of an unregistered firm for the of dissolution and accounts of the partnership Firm, the partners can maintain all applications/petition under the Arbitration Act for the purpose of enforcing their right to secure dissolution and accounts of the partnership firm through arbitration. In fact, in the present case the suit for dissolution and accounts of the partnership firm has been stayed under Section 34 of the Arbitration Act at the instance of respondent No. 1. The petition of the appellant, therefore, under Section 8 of the Arbitration Act is maintainable in the present case." In the case of Vanita Gambhir v. District Judge, Delhi, ILR (2004) II Delhi 425, a Division Bench of the Delhi High Court held that if proceedings seek to enforce right to resort to arbitration between the parties, a suit or any other proceedings by a partner of an unregistered firm would be barred under subsection (1) and (3) of section 69. However, this bar would not apply if such proceedings are taken to enforce any right to sue for the dissolution of the firm or for accounts of a dissolved firm or any proceedings to realize the property of a dissolved firm. Similar view was expressed by the Delhi High Court in the case of Mulakh Raj v. Shashi Rani, ILR (2005) I Delhi 259. Learned Single Judge of the Rajasthan High Court in the case of Dinesh Jangid v. Laxmi Kant Jangid, AIR 2007 Rajasthan 203 held as under: "18. Similar view was expressed by the Delhi High Court in the case of Mulakh Raj v. Shashi Rani, ILR (2005) I Delhi 259. Learned Single Judge of the Rajasthan High Court in the case of Dinesh Jangid v. Laxmi Kant Jangid, AIR 2007 Rajasthan 203 held as under: "18. Having closely analysed the ratio indicated in afore quoted judicial pronouncements, I find that the object intended by the Legislature in engrafting sub-section (3) of Section 69 of 1932 Act appears to be that in spite of the defect of non registration and the prohibition created in the main part of non enforceability of the right arising from a contract, parties having worked under the contract to the limited extent of enforcement of a right to realise assets, settlement of the accounts of dissolved firm or any right or power to realise the property of the dissolved firm are exceptions engrafted therein and gives rights to the parties to enforce the same independent of the right arising from the contract. Therefore, the parties are relieved from the prohibition created by operation of Section 69. After dissolution, the partnership subsists for the purpose of completing pending transactions, winding up the business, and adjusting the rights of the partners and for these purposes, the authority, rights and obligations of the partners continue." 19. With this background in mind, if one reverts back to the documents on record, it emerges that in the notice dated 20th July 2010, that the petitioner issued through his advocate, it is stated that loan of Rs. 10 lacs was provided as solvency for registration of the firm. It was pointed out that registration of the firm had expired on 31.12.2002, and that the firm had functioned till 30.6.2002 and thereafter it had become dormant. Other partners had started managing the firm. The petitioner's attempts to receive the solvency previously provided as also Rs. 10 lacs advanced by the petitioner were not successful. Notice also referred to certain other amounts which according to the petitioner were receivable. Eventually, the notice suggested that to resolve such disputes, the petitioner would resort to arbitration proceedings. In the petition also, the petitioner has reiterated such demands. 20. With respect to the question of delay, unless the demands sought to be raised are hopelessly barred by limitation, at this stage, it would not be necessary to go into such aspects. Eventually, the notice suggested that to resolve such disputes, the petitioner would resort to arbitration proceedings. In the petition also, the petitioner has reiterated such demands. 20. With respect to the question of delay, unless the demands sought to be raised are hopelessly barred by limitation, at this stage, it would not be necessary to go into such aspects. In the case of SBB & Co. (supra), The Apex Court while laying down what exactly would be the role of the Chief Justice or his designate, in para 39 observed that he can also decide the question whether the claim was a dead one, or a long barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It was further observed that however, it may not be possible at that stage to decide whether a live claim made is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence along with the merits of the claims involved in the arbitration." 21. This brings me to the last objection of the respondents namely of the pending suit, in which, the present disputes form part. According to the respondents, reference to the arbitrator by the present proceedings would fragment the suit. It was pointed out that such suit involves additional parties who are not parties in the present proceedings since they were not signatories to the arbitration agreement. Heavy reliance is placed on the decision in case of Sukanya Holding Pvt. Ltd. v. Jayesh H. Pandya and Anr. (supra). 22. In case of Sukanya Holding Pvt. Ltd. v. Jayesh H. Pandya and Anr. (supra), the facts were that a partnership firm was carrying on business of real estate development. The firm purchased various parcels of land and carried out construction of flats on such lands. These flats were sold to the creditors of the firm and others. One of the partners filed a suit in the High Court of Bombay for dissolution of the partnership firm and for accounts. The firm purchased various parcels of land and carried out construction of flats on such lands. These flats were sold to the creditors of the firm and others. One of the partners filed a suit in the High Court of Bombay for dissolution of the partnership firm and for accounts. One of the prayers in the suit was for challenging the conveyance deeds executed by the partnership firm in favour of M/s. West End Gymkhana Ltd. In such suit, some of the partners of the firm filed application under section 8 of the Arbitration and Conciliation Act. The application was opposed by the plaintiff contending that the subject matter of the suit was not between the contracting parties and the reliefs claimed were not only against the partners of the firm but against 23 other parties to whom the flats were sold. The Bombay High Court rejected the application under section 8 of the Arbitration and Conciliation Act. The issue thereupon reached the Supreme Court. The Supreme Court held that in such a case, section 8 of the Arbitration and Conciliation Act would not apply. It was observed that bifurcation of such causes of action one to be decided by the Civil Court and other by the arbitration tribunal would delay the proceedings and defeat the purpose of speedy disposal. 23. I may notice that the judgement of the Supreme Court in case of Sukanya Holding Pvt. Ltd. v. Jayesh H. Pandya and Anr. (supra) came up for consideration in later judgement in case of Sirajuddin Kasim and Anr. v. Paramount Investment Ltd. (supra). Facts in the said case were that the petitioner Sirajuddin Kasim was a Director, Promoter and a share holder in a company which was incorporated under the laws of the Republic of Singapore. According to the petitioner, the respondent had breached the terms of contract between them pertaining to farming out oil blocks. The petitioner, therefore, desired to activate the arbitration clause to resolve such dispute. His application filed before the Supreme Court was opposed by the opponents contending that the suit is already instituted before the High Court of Republic of Singapore claiming damages. The Supreme Court noted that such suit was filed after receipt of notice for arbitration and accepted the request for appointment of an arbitrator. The decision in case of Sukanya Holdings (P) Ltd. v. Jayesh H Pandya and Anr., was noticed. The Supreme Court noted that such suit was filed after receipt of notice for arbitration and accepted the request for appointment of an arbitrator. The decision in case of Sukanya Holdings (P) Ltd. v. Jayesh H Pandya and Anr., was noticed. The Supreme Court observed as under: "20. From the sequence of events discussed above, prima facie, it appears that respondent filed a suit on 14th May 2009 before the High Court of Republic of Singapore, inter alia, claiming damages after receiving the letters of the petitioner dated 15th April, 2009 and 17th April, 2009, whereunder the arbitration clause has been invoked. It also appears that prior to the filing of the suit, the settlement agreement dated 23rd April, 2008, as also the Power of Attorney dated 23rd April, 2008, were revoked by the letters dated 15th and 17th April, 2009 and the request to appoint an impartial arbitrator in terms of clause 8.4 of SHA was made in the letter dated 15.4.2009 and then reiterated in the letter dated 17.04.2009. 21. The learned counsel for the respondent, in view of the facts stated above and in view of his subsequent suit filed by them, argued that the rights of the petitioners under the arbitration agreement does not survive and in support of his contention reliance was placed on the decision rendered in Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and another reported in (2003) 5 SCC 531 . 22. This Court is of the opinion that the reliance by the respondent on Sukanya Holdings (supra) is not of much help to the respondent in the facts and circumstances of the case. First of all in the instant case Section 8 of Arbitration and Conciliation Act is not attracted. It is nobody's case that matter was placed before the judicial authority before invoking the arbitration clause. In the instant case arbitration clause was invoked earlier than the filing of a suit as noted above. On the other hand the ratio in the case of Sukanya Holdings (supra) is against the contention of the respondent in as much as it has been held, in paragraph 16 at 536 of the report, that it would be difficult to give an interpretation to Section 8 of the Act for bifurcation of the cause of action between the Civil Court and the arbitral forum. 23. 23. In the case of Sukanya Holdings (supra) the dispute was over dissolution of the partnership firm and over accounts filed by one partner against the defendants who were admittedly not partners in the firm. Therefore, the Court held that the meaning of the term "in a matter" must indicate that the entire subject matter of the suit should be subject to arbitration agreement. 24. In the instant case admittedly petitioner No. 2 is neither a party to the settlement agreement nor was he impleaded in the suit. Therefore, the ratio in Sukanya Holdings (supra) does not help the respondent. 25. In the instant case the petitioners have alleged that there was economic duress in the matter of execution of the settlement agreement. Therefore, following the ratio of this Court in the case of National Insurance Company Ltd. v. Boghara Polyfab Pvt. Ltd. reported in (2009) 1 SCC 267 , this Court is of the opinion whether rights of the parties under SHA have been superseded by the subsequent settlement agreement may be an arbitrable issue and that issue can be examined by the arbitrator." 24. In the present case, the parties have presented a copy of the civil suit filed by the respondents. The suit pertains to various immovable properties and family businesses and concerns wide range of issues and disputes between the family members and various partners. One of the prayers is for settlement of accounts of the present partnership business. One may recall, in the present case, the notice for appointment of an arbitrator was issued by the petitioners on 12.05.2016. The respondents filed reply to such notice on 26.05.2016 and the said suit was filed before the Civil Court on 02.06.2016. Thus, there was a clear attempt to thwart the arbitral proceedings by instituting the suit which would also involve the question of accounts of present partnership firm. In any case, the present issue is clearly separable and can be segregated. There cannot be any prohibition nor any objection to an ordinary civil proceedings between aggrieved parties to proceed before the Civil Court. However, when an independent issue arises between the partners of a firm which partnership agreement contains an arbitration clause, the contracting partners must respect such arbitration clause. There cannot be any prohibition nor any objection to an ordinary civil proceedings between aggrieved parties to proceed before the Civil Court. However, when an independent issue arises between the partners of a firm which partnership agreement contains an arbitration clause, the contracting partners must respect such arbitration clause. If some of the aggrieved partners raise an arbitration dispute unwilling partners cannot oppose arbitration proceedings on the ground that they have already instituted a suit in which along with all grievances, allegations and remedies, the disputes concerning the present partnership firm is also been thrown in the hotchpotch. The arbitration clause validly executed between the parties becomes enforceable contract and courts, by virtue of judicial pronouncements and statutory provisions, lean in favour of enforcing such a contract. Such mechanism of resorting to arbitration instead of approaching the Civil Court cannot be thwarted by instituting the suit that too, after receipt of notice for arbitration. Any such attempt would frustrate the provisions of section 8 as well as section 11 of the Arbitration and Conciliation Act. 25. All the objections of the respondents are therefore turned down. S.O. to 03.03.2017 for identifying the arbitrator.