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2023 DIGILAW 327 (UTT)

Tasleem Ahmad v. Masaarur Ahmad

2023-05-19

VIPIN SANGHI

body2023
JUDGMENT: The applicant Tasleem Ahmad has preferred the present application under Section 11(6) of the Arbitration and Conciliation Act to seek the appointment of sole arbitrator to adjudicate the disputes, which have arisen between the parties arising out of their partnership deed dated 19.09.2021. 2. The applicant is one of the five partners in the said firm, and is described as the party of the “FIRST” part. The partnership deed records that the partners have agreed to carry on the business of brick kiln under the name and style ‘M/s Welcome Brick Supply’, at Village Tikola Khurd, Pargana Manglaur Town, Tehsil Roorkee, District Haridwar. The share of the applicant in the profit and loss of the firm is 25 per cent. The partnership deed contains an Arbitration clause in clause 17, which states that, in the event of any dispute arising out of the partnership deed, or in relation to the interpretation, operation and enforcement of this deed, the same should be referred under the provisions of the Indian Arbitration Act. 3. Case of the applicant is that, since dispute arose between the parties, the applicant invoked the Arbitration Agreement vide notice dated 16.08.2022. The applicant nominated one Sri A.K. Kacker, HJS (Retired) as the sole arbitrator to adjudicate the disputes, and sought the consent of the other partners to appointment of Sri A.K. Kacker, as the sold arbitrator. 4. The applicant also invoked Section 9 of the Arbitration and Conciliation Act, to seek interim measure in relation to the running of the business, and the assets of the partnership firm. 5. Since the parties could not mutually appoint the arbitrator, this application has been preferred. 6. On issuance of notice, all the respondents were served. Only respondent No. 2 appeared through counsel, and sought to contest this application. The respondent No. 2 has filed his reply / counter-affidavit on record. However, none has appeared on behalf of respondent No. 2 to advance submissions. In these circumstances, I have perused the reply filed by respondent No. 2. 7. The stand taken by respondent No. 2 is that the parties had entered into a compromise deed dated 29.11.2022, and, therefore, the present application is not maintainable. A copy of the compromise deed, along with its English translation, has been filed on record by respondent No. 2. The compromise deed appears to have been executed by all the five partners. The stand taken by respondent No. 2 is that the parties had entered into a compromise deed dated 29.11.2022, and, therefore, the present application is not maintainable. A copy of the compromise deed, along with its English translation, has been filed on record by respondent No. 2. The compromise deed appears to have been executed by all the five partners. The said compromise deed records that since disputes have arisen, the parties do not wish to continue with the business. It further records that in relation to the GST evasion, the proceedings are pending before the Assessing Officer, Roorkee. Under the compromise, it was agreed, that the goods located at the brick kiln shall be sold, and the GST dues shall be paid. The extra money from the sale of bricks will be received by Sher Khan, one of the partners, i.e., respondent No. 2. It was agreed that none of the parties will directly or indirectly cause any hindrance in the sale of the bricks, which were to be sold to one Sri Islam. 8. Learned counsel for the applicant submits that the said compromise related only to sale of the existing bricks. However, the disputes between the partners in relation to the partnership assets, and taking of accounts remain outstanding, and have not been settled even under the compromise deed. 9. In the aforesaid light, I am inclined to allow this application. As to what is the scope of the compromise deed, and its effect on the inter se rights and obligations of all the partners, can only be determined in arbitration. 10. Accordingly, I allow this application, and appoint Mr. Sandeep Kothari, Advocate, to act as the sole Arbitrator to adjudicate the disputes which have arisen between the parties.