MAYOR CONSTRUCTION v. ANIL MAYOR HUF THRU ITS KARTA ANIL KUMAR MAYOR
2018-04-05
SURYA PRAKASH KESARWANI
body2018
DigiLaw.ai
JUDGMENT : Surya Prakash Kesarwani, J. Heard Sri Rakesh Kumar, learned counsel for the applicants and Sri Atul Dayal, learned counsel for the opposite parties. Facts: 2. This application under Section 11(4) of the Arbitration and Conciliation Act, 1996 has been filed by a partner of the firm M/s Mayor Constructions for appointment of an arbitrator to resolve the dispute relating to non-rendition of accounts of the firm by the opposite parties. 3. Undisputedly, paragraph-17 of the partnership deed dated 15.03.2012 contains an arbitration clause which provides that in case any dispute arises between partners of the firm, then it shall be resolved by an arbitrator appointed under the Arbitration and Conciliation Act and whose decision shall be binding on all the partners under the partnership. The applicants have given a notice dated 27.08.2016 to the opposite parties for appointment of an arbitrator to resolve the dispute. The applicants proposed the name of Hon'ble Mr. Justice Janardan Sahai (retired) as arbitrator since he has already decided the earlier reference. Since the opposite parties have not agreed to the appointment of the arbitrator, hence the applicants have filed the present application. Submissions: 4. Sri Ashish Kumar Singh, learned counsel for the applicants submits that once it is found that there exists an agreement which contains an arbitration clause for appointment of an arbitrator and any party to the agreement in the event of dispute, wants to get it resolved by an arbitrator, then the arbitrator has to be appointed to resolve the disputed. 5. Sri Atul Dayal, learned counsel for the opposite parties submits that earlier a dispute arose between the parties and an arbitrator was appointed by order of this court who gave the award dated 10.8.2016 in which he made an observation while deciding the issue No.7, as under: "that apart a claim of rent appropriated by a partner is also an item of partnership accounts and such a claim is maintainable in a suit for dissolution of partnership/ rendition of accounts and not in a claim of the present nature." 6. He, therefore, submits that once there is a finding by the Tribunal that the dispute relating to rendition of accounts can be maintained in a suit and not in an arbitration proceedings, therefore, the present application is not maintainable. Discussion and Findings: 7. I have carefully considered the submissions of the learned counsel for the parties. 8.
He, therefore, submits that once there is a finding by the Tribunal that the dispute relating to rendition of accounts can be maintained in a suit and not in an arbitration proceedings, therefore, the present application is not maintainable. Discussion and Findings: 7. I have carefully considered the submissions of the learned counsel for the parties. 8. There is no dispute that there exists a partnership agreement dated 15.03.2012 which contains an arbitration clause. Section 11(6A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') as inserted by Act III of 2016 (w.e.f. 23.10.2015) provides as under: "Section 11(6A):- The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement" 9. The aforesaid provision came for consideration before Hon'ble Supreme court in the case of M/s Duro Felguera, S.A. V/S M/.s Gangvaram Port Limited, (2017) 9 SCC 729 , in which it was held as under: "45. Section 11(6A) added by the 2015 Amendment, reads as follows: "11(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement." From a reading of Section 11(6A), the intention of the legislature is crystal clear i.e. the Court should and need only look into one aspect- the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple - it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. 55. 13.The scope of the power under Section 11 (6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less.
55. 13.The scope of the power under Section 11 (6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected." 10. Thus, after the provision of sub-section (6A) of Section 11 was inserted in the Act, the Court should and need only to look into one aspect- the existence of an arbitration agreement. If the agreement exists and it contains an arbitration clause, then the dispute arising from the agreement between parties has to be resolved by an arbitrator. The legislative policy and purpose of enactment of sub-section (6A) of Section 11 is essentially to minimize the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6A) ought to be respected. 11. The submission of Mr. Dayal regarding maintainability of the present application on the ground of certain observation made by the Arbitral Tribunal in a reference made earlier, deserves rejection in view of the law laid by Hon'ble Supreme Court in the case of Ravi Prakash Goel vs. Chandra Prakash Goel and another, (2008) 13 SCC 667 (Para-28) in which Hon'ble Supreme Court held as under: "In our opinion, the partnership deed clearly recites that all the disputes touching the affairs of the partnership firm were referable to arbitrator and it cannot be gainsaid that the dispute regarding accounts of the partnership firm is a dispute touching the affairs of the firm." 12. In view of the above discussion, I find no difficulty to hold that in terms of the provisions of Section 11(6A) of the Act, an Arbitrator needs to be appointed. Let Mr. Justice Janardan Sahai, R/o Plot No.7, High Court Judges Colony, Sector 105, NOIDA, U.P., Phone No.2567007, be appointed as an Arbitrator to resolve the dispute subject to his consent in terms of Section 11(8) of the Act. 13.
Let Mr. Justice Janardan Sahai, R/o Plot No.7, High Court Judges Colony, Sector 105, NOIDA, U.P., Phone No.2567007, be appointed as an Arbitrator to resolve the dispute subject to his consent in terms of Section 11(8) of the Act. 13. The Registry is directed to obtain consent of the proposed Arbitrator, in terms of the amended provisions contained under sub-section (8) of Section 11 of the Act, within a period of two weeks from today.