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2023 DIGILAW 49 (HP)

Rajesh Kumar Rao v. Ravinder Kumar Gupta

2023-01-12

VIVEK SINGH THAKUR

body2023
JUDGMENT : Vivek Singh Thakur, J. Instant Arbitration Appeal has been preferred by appellants against order dated 23.11.2020, passed by Senior Civil Judge, Lahaul & Spiti at Kullu in CMA No. 145-VI/2020 in Case No. 25/2020, titled Ravinder Kumar vs. Rajesh Kumar Rao and another, whereby application preferred by appellants under Section 8(1) of Arbitration and Conciliation Act, 1996 (hereinafter referred as the “Act”), praying for referring the dispute to Arbitrator has been dismissed, on the ground that dispute in reference in Civil Suit does not fall within the purview of Clauses of Deed of Partnership dated 17.4.2014 executed between appellant No.1 and respondent and, therefore, Arbitration Clause of Deed of Partnership was not applicable in the case in hand. 2. Undisputed facts, in present case, are that on 17.4.2014, a Deed of Partnership was entered between Ravinder Kumar respondent and Rajesh Kumar (appellant No.1) to run a Crusher namely M/s Bhawani Stone Crusher in partnership and to use the stone extracted from land referred in Partnership Deed, in partnership business. The land comprised in Khasra Nos. 844 and 845, referred in agreement, whereupon Crusher had already been installed by previous owner Daulat Ram, is in joint ownership and possession of Ravinder Kumar and Rajesh Kumar in equal shares. Land measuring 5-8-0 bighas has been taken on lease by Ravinder Kumar for extraction of stones and stones extracted therefrom were agreed to be used only in M/s Bhawani Stone Crusher with condition that profit of stone extracted shall be distributed between both partners in equal shares. Apart from other terms and conditions, there was Arbitration Clause No. 9 which reads as under:- “9. That in case of any dispute between the partners the matter shall be dealt under the provisions of Indian Arbitration Act and the Arbitrator shall be appointed with the mutual consent of both the partners and the award issued by them shall be binding on both the partners.” 3. Clause 10 of Partnership Deed is also relevant for adjudication of present matter, which reads as under :- “10. That in case any of the partner wants to leave the partnership business in that event it would be incumbent upon the leaving partner to sell his share in favour of remaining partner. The leaving partner shall not have the right to sell his share any outsider.” 4. That in case any of the partner wants to leave the partnership business in that event it would be incumbent upon the leaving partner to sell his share in favour of remaining partner. The leaving partner shall not have the right to sell his share any outsider.” 4. It is the case of appellants that vide Agreement dated 20.9.2020, respondent Ravinder Kumar Gupta had sold movable and immovable property of Stone Crusher along with land comprised in Khasra Nos. 844 and 845 measuring 54 biswas to its partner Rajesh Kumar Rao for consideration of Rs.1.50 crore and Rs.70 lacs was agreed to be paid by 10.10.2020 and balance amount of Rs.75 lacs was to be paid within two months, and partners, i.e. Ravinder Kumar Gupta and Rajesh Kumar Rao, had also agreed to close the limit by depositing amount payable for that in equal shares. It was agreed that any liability or right, as existing on 20.9.2020, was to be shared by both partners equally whereas from 21.9.2020 Crusher was to be run by Rajesh Kumar Rao with all rights and liabilities of Crusher thereafter. Appellant No.2 Abhimanu Gorsi, who is son of Rajesh Kumar Rao, is one of the witnesses to this agreement. 5. It is also an admitted fact that another Agreement dated 24.3.2021 was executed between parties i.e. Ravinder Kumar and Rajesh Kumar Rao, in continuation of previous agreement dated 20.9.2020, wherein it was recorded that petitioner has paid Rs.10 lacs vide cheque dated 21.9.2020, Rs.65 lacs vide cheque dated 22.9.2020 and Rs.75 lacs vide cheque dated 5.4.2021 to Ravinder Kumar Gupta and Ravinder Kumar Gupta had agreed to pay his share of 50% in CC Limit and in FITL Loan of M/s Bhawani Stone Crusher by depositing the same in accounts maintained in SBI Bhuntar Branch and Ravinder Kumar had agreed to execute the sale deed in favour of Rajesh Kumar Rao on or before 10.5.2021. 6. Later on, it has been claimed that amount of consideration for sale was revised vide agreement dated 24.3.2021 and thereafter entire sale consideration has been paid by Rajesh Kumar Rao to Ravinder either through cheques or by remitting/transferring the amount in the account of Ravinder Kumar Gupta. 7. 6. Later on, it has been claimed that amount of consideration for sale was revised vide agreement dated 24.3.2021 and thereafter entire sale consideration has been paid by Rajesh Kumar Rao to Ravinder either through cheques or by remitting/transferring the amount in the account of Ravinder Kumar Gupta. 7. On 7.10.2020, respondent Ravinder Kumar preferred a suit for declaration that he was owner in possession of half share of total land comprised Khasra Nos 844 and 845 along with Stone Crusher thereon and for declaring that Agreement dated 20.9.2020 was null and void, not binding on him, with consequential relief of permanent prohibitory injunction restraining the appellants from taking over possession of the same forcibly and also from ousting and dispossessing the plaintiff from Stone Crusher. 8. In aforesaid suit, appellants preferred an application under Section 8(1) of the Act with prayer to Civil Court to refer the dispute for arbitration in view of Arbitration Clause No. 9 of Partnership Deed dated 17.4.2014. 9. Application was opposed on the ground that Clause 9 of Partnership Deed was regarding dispute between partners in relation to partnership business only and there was no dispute between the parties regarding partnership business but suit filed was against the Agreement obtained by defendants/ appellants in connivance with each other and other witnesses by putting pressure on respondent and, therefore, matter was not required to be referred to arbitration as Clause 9 was related to partnership business only not for title of land and crusher. 10. Learned Civil Judge accepted the plea of respondent and dismissed the application. 11. Learned counsel for appellants has relied upon pronouncements of Supreme Court in P. Anand Gajapathi Raju vs. P.V. G. Raju (dead) and others, reported in (2000) 4 SCC 539 ; Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums, reported in (2003)6 SCC 503 ; SBP & Co. vs. Patel Engineering Ltd. and another, reported in (2005) 8 SCC 618 ; and N. Radhakrishnan vs. Maestro Engineers and others, reported in (2010)1 SCC 72 . 12. Learned counsel for respondent has relied upon N. Radhakrishnan vs. Maestro Engineers and others, reported in (2010)1 SCC 72 , as well as Haryana Telecom Company Ltd. V. Sterlite Industries (India) Ltd., reported in (1999)5 SCC 688 . 13. 12. Learned counsel for respondent has relied upon N. Radhakrishnan vs. Maestro Engineers and others, reported in (2010)1 SCC 72 , as well as Haryana Telecom Company Ltd. V. Sterlite Industries (India) Ltd., reported in (1999)5 SCC 688 . 13. It has been submitted by learned counsel for appellants that respondent has received entire sale consideration amount and despite that, he is not coming forward to execute the sale deed but has filed a suit to frustrate the right of appellants. 14. It has been further submitted on behalf of appellants that Clause 10 provides that in case any partner intends to leave the partnership business then it would be incumbent upon him to sell his share in favour of remaining partners and leaving partner shall not have any right to sell his right to any outsider, whereas, after entering into Agreement to Sell with appellant No.1, on 20.9.2020, respondent Ravinder Kumar initiated talks with outsiders to sell his share whereupon appellant No.1 came under pressure and executed agreement dated 24.3.2021 whereby sale consideration was enhanced and appellant No.1 had also paid enhanced sale consideration to Ravinder Kumar and, therefore, matter pertains to Partnership Deed wherein Arbitration Clause is there and, thus, impugned order deserves to be set aside. 15. Learned counsel for respondent has submitted that Agreements to Sell entered between the parties were result of coercion and connivance of appellants to pressurize the respondent to sell his share to Rajesh Kumar Rao and, therefore, the issue/dispute arising between the parties is not a subject matter of Partnership Deed which does not contemplate execution of Agreement to Sell. It has been further submitted that respondent does not intend to transfer or sell his share. With respect to receipt of sale consideration, it has been submitted that said amount was transmitted by appellant No.1 to account of respondent voluntarily without consent of respondent. 16. I have gone through entire record as well as case law cited by parties. 17. It has been further submitted that respondent does not intend to transfer or sell his share. With respect to receipt of sale consideration, it has been submitted that said amount was transmitted by appellant No.1 to account of respondent voluntarily without consent of respondent. 16. I have gone through entire record as well as case law cited by parties. 17. Dispute between the parties is with respect to Agreement to Sell pertaining to half share of Ravinder Kumar a partner and according to Clause 10 of Partnership Deed, a partner, intending to sell his share, was bound to sell his share in favour of remaining partners and, therefore, an Agreement to Sell entered between parties is in furtherance to Clause 10 of Partnership Deed and dispute arising between the parties is related to Clause 10 of Partnership Deed. Therefore, Arbitration Clause of Partnership Deed covers the dispute related to selling of half share by partner to remaining partner. Therefore, keeping in view the provisions of Section 8 of Arbitration Act, Civil Court had no other option but to refer the matter to Arbitrator in terms of Arbitration Clause and thus, Senior Civil Judge has committed an error by dismissing the application filed by appellants to refer the dispute for arbitration. 18. It is also apt to record that issue with respect to jurisdiction of Arbitrator to adjudicate the dispute can also be raised before Arbitrator who has power to decide the same without being influenced by any observation made by this Court for adjudicating present appeal. 19. In view of above discussion, impugned order passed by Senior Civil Judge in CMA No. 145-VI/2020 in Case No. 25/20 is set aside and Senior Civil Judge is directed to refer the matter for arbitration by directing the parties to invoke Arbitration Clause of Partnership Deed. Appeal stands disposed of in the above terms, so also pending application(s), if any.