Anju Devi v. Bipin Bihari, son of Lakhit Ram Mahto
2022-11-24
SUJIT NARAYAN PRASAD
body2022
DigiLaw.ai
ORDER : The instant application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking a direction for appointment of Arbitrator for adjudication of the dispute between the parties. 2. This Court had issued upon the concerned respondents, as would appear from order dated 15.09.2022. Steps have been taken and as per the office note dated 22.11.2022, the notices said to have been served validly. 3. Learned counsel for the petitioner, in view thereof, has submitted that since even in spite of service upon the concerned respondents, there is no appearance on their behalf as no vakalatnama has been filed, therefore, the matter may be disposed of by appointing an Arbitrator. 4. This Court has heard the learned counsel for the petitioner and after perusing the order dated 15.09.2022 as also the office note dated 22.11.2022, whereby and whereunder, the office has reported through the following note which reads hereunder as :- “It may be recalled that earlier in compliance to the Order dated 15/09/2022, notices upon Respondent no. 01 to 04 under Ordinary Process as well as Register cover with AD were issued. Valid Service reports of notices upon Respondent no. 01 & 04 received as same were received by Respondents himself as per report of process server (kept at Z1 & Z4"), Service report of notice upon Respondent no. 02 has been received which appears to be valid with a report of Process Server that son (Navneet Kant) of the Respondent has received the notice and he lives with Respondent jointly, Kept at flag Z2, Service report of notice upon Respondent no. 03 has been received which appears to be valid with a report of Process Server that Brother (Navneet Kant) of the Respondent has received the notice and he lives with Respondent jointly, Kept at flag ‘Z3’, Signed ADs of registered cover of Respondent no 01 & 04 have been received, kept on record. ADs of registered cover of Respondent no. 02 & 03 have been received, kept on record. {said Ads have been received by Navneet}, But, no appearance of respondents have been made as yet as per computer enquiry. Submitted before Bench "For Admission". Before an App. Bench of S.J” 5.
ADs of registered cover of Respondent no. 02 & 03 have been received, kept on record. {said Ads have been received by Navneet}, But, no appearance of respondents have been made as yet as per computer enquiry. Submitted before Bench "For Admission". Before an App. Bench of S.J” 5. This Court, after taking into consideration the aforesaid office note and considering the fact that even after notice having been validly served upon the concerned respondents, no vakalatnama has been filed and, as such, deems it fit and proper to proceed with the matter for dealing the issue on merit. 6. The instant application has been filed by the applicants/petitioners invoking the jurisdiction conferred under Section 11(6) of the Arbitration and Conciliation Act, 1996, praying therein for appointment of independent Arbitrator for reference of the dispute arising out of two agreements, both dated 20.06.2020 entered by and between the petitioners/applicants and the respondents. 7. The brief facts of the case as per the pleading made in the application read hereunder as :- It is the case of the petitioners/applicants that Late Sushil Kumar, husband of petitioner No.1 and father of petitioner No.2 and Late Lakhit Ram Mahto, father of Respondent No.1, 3 and 4 and husband of Respondent No.2, were partners in the partnership firm “Royal Cement Company” carrying on the business of a cement factory and another partnership firm running in the name and style of “Hotel Parvati” dealing in the business of hotel. After the death of both the original partners, namely, Lakhit Ram Mahto and Sushil Kumar, the aforesaid family members were inducted as partners. It is the further case of the petitioners/applicants that the petitioners were being kept in the dark about the affairs of the business and as no share of the profits were being paid to them, a meeting of the partners was held in April, 2021 in which important decisions were taken regarding the business and lands, including decision of scrutiny of the account to be made by the partners and payment of proportionate shares of the profits to them.
As the aforesaid decision was never complied with by the Respondents and on the contrary, the Respondents kept enjoying the profits without paying the share of the profit to the Petitioners and over and above, the Respondents started keeping all their accounts and business affairs concealed from the Petitioners who had gathered some information about the profits and accounts and once the Respondents were aware that the Petitioners were getting information about the business affairs, they started using coercive and other unfair methods and even prevented the staff from giving any access of necessary accounts/documents and affairs to the Petitioners. It is the further case of the petitioners/applicants that the Respondents are trying to take undue advantage of the loss of husband of petitioner No.1 and father of petitioner No.2 and not giving the Petitioners their shares, benefits and are not even allowing them to have access to the running account etc., of the firm. The petitioners/applicants have tried their level best for settlement of dispute but failed therein. A legal notice was issued on 24.11.2021, for appointment of Arbitrator in view of the arbitration clause contained in the partnership agreements as under Clause 20 and 23. The Arbitrator having not been appointed within the stipulated period, the petitioners/applicants were constrained to file the instant application under Section 11(6) of the Act, 1996. 8. This Court has perused the arbitration clause as contained under Clause 20 and 23 of the deeds of partnership whereby and whereunder the parties have agreed that if any dispute arises between the partners in respect of the conduct of the business of the partnership or in respect of interpretation or endorsement of any of the things whatsoever, not herein otherwise provided, same shall be referred for adjudication to the Arbitration, Arbitrators appointed by each partners or as may be agreed upon by the partners and decisions of majority award of the Arbitrators will be final and bindings on the partners. The stipulation made under Clause 20 of the partnership deed dated 20th June, 2020 wherein the petitioner No.2 is partner, for ready reference, is being reproduced herein which reads hereunder as :- “20.
The stipulation made under Clause 20 of the partnership deed dated 20th June, 2020 wherein the petitioner No.2 is partner, for ready reference, is being reproduced herein which reads hereunder as :- “20. THAT if any dispute arises between the partners in respect of the conduct of the business of the partnership or in respect of interpretation or endorsement of any of the things whatsoever, not herein otherwise provided, same shall be referred for adjudication to the Arbitration, Arbitrators appointed by each partners or as may be agreed upon by the partners and decisions of majority award of the Arbitrators will be final and bindings on the partners.” In the second partnership deed in which petitioner No.1 is partner, similar provision is there at Clause-23. 9. The petitioner/applicant, namely, Smt. Anju Devi, happen s to be the wife of Late Sushil Kumar and applicant Sidhu Saini, happens to be the son of Late Sushil Kumar. It is evident from the pleading that Late Sushil Kumar was the partner in the partnership firm “Royal Cement Company” carrying on the businesses of a cement factory and another partnership firm being run in the name and style of “Hotel Parvati” dealing in the business of hotel. It is evident from the partnership deed, as appended as Annexure-1 to the instant application, that after the demise of Sushil Kumar, husband of petitioner No.1 and father of petitioner No.2, the same has been executed in between Mr. Bipin Bihari, son of Sri Lakhit Ram Mahto, Ashutosh Kumar, son of Late Binod Bihari, Navneet Kant, son of Late Binod Bihari and Sidhu Saini, son of Late Sushil Kumar for the purpose of carrying on the partnership business of Royal Cement Company whereas the partnership deed, as appended as Annexure-2, has been executed in between Mr. Bipin Bihari, son of Sri Lakhit Ram Mahto, Neelam Devi, wife of Late Binod Bihari, and Anju Devi, wife of Late Sushil Kumar for the purpose of carrying on the partnership business of Hotel Parwati. 10. The aforesaid partnership deeds contain the aforesaid arbitration clause, as quoted and referred hereinabove, providing therein the mechanism to resolve the dispute if arisen in between the partners. It further appears from Annexure-3 that due to demise of Sushil Kumar, husband of petitioner No.1 and father of petitioner No.2, the dispute arose amongst the partners of the said partnership firms.
The aforesaid partnership deeds contain the aforesaid arbitration clause, as quoted and referred hereinabove, providing therein the mechanism to resolve the dispute if arisen in between the partners. It further appears from Annexure-3 that due to demise of Sushil Kumar, husband of petitioner No.1 and father of petitioner No.2, the dispute arose amongst the partners of the said partnership firms. The same having not been resolved through amicable settlement, then due notice was given to the other partners for resolution of dispute by appointing Arbitrator in view of the arbitration clause contained as under Clause 20/23, as quoted and referred hereinabove. But, the Arbitrator having not been appointed, the instant application has been filed. 11. As has been referred hereinabove that this Court while hearing the petitioner/applicant, has issued notice upon the respondents but even after the notice having validly been served upon the concerned respondents, they have chosen not to appear. This Court, therefore, has proceeded to pass order on merit and thereby the order is being passed. 12. This Court, after going through Clause 20/23 of the partnership deed, is of the view that since the deed contains a clause for resolution of dispute by appointing an Arbitrator and to that effect the due request was also made to the other members of the partnership firm, the respondents herein, but no steps have been taken for appointment of Arbitrator by mutual agreement. The position of law is well settled that if the contract contains arbitration clause for appointment of Arbitrator for resolution of dispute and the Arbitration has not been appointed and if in that eventuality application has been filed invoking the jurisdiction of the High Court as conferred under Section 11(6) of the Arbitration and Conciliation Act, 1996, the referral Court, i.e., the concerned High Court, is to only consider the fact about the availability of arbitration clause and if the arbitration clause is there in the contract, the Arbitrator is required to be appointed for resolution of dispute. 13. This Court, after taking into consideration the aforesaid position of law and considering the fact that the partnership deed contains arbitration clause, therefore, is of the view that the Arbitrator is required to be appointed in exercise of power conferred to this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. 14.
13. This Court, after taking into consideration the aforesaid position of law and considering the fact that the partnership deed contains arbitration clause, therefore, is of the view that the Arbitrator is required to be appointed in exercise of power conferred to this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. 14. In view thereof and as per the discussion made hereinabove, this application is allowed. 15. Learned counsel for the petitioner has suggested the name of Hon’ble Mrs. Justice Jaya Roy (Retd.), High Court of Jharkhand, to act as an Arbitrator. 16. In view thereof and with the consent of the learned counsel for the petitioners, Hon’ble Mrs. Justice (Retd.) Jaya Roy, Former Judge, High Court of Jharkhand, residing at Roy Compound, Dr. Fatullah Road, Near Lower Bazar Thana, Ranchi, Email - justicejayaroy@gmail.com is appointed as sole arbitrator to adjudicate the dispute between the parties. 17. Learned Registrar General of this Court is directed to send a copy of the entire records of this case along with entire order sheets to the learned Arbitrator forthwith. 18. The instant arbitration application is allowed and accordingly, disposed of. 19. Office is directed to communicate this order to concerned respondents on their official/residential address for information.