SUNIL PRAKASHCHANDRA MALOOV/sM/S. SURANA MALOO. CO. v. Surana Maloo Co.
2026-01-19
D.N.RAY, SUNITA AGARWAL
body2026
DigiLaw.ai
ORDER : SUNITA AGARWAL, C.J. 1. Heard Mr. Udit N. Vyas, learned advocate appearing for the petitioner and Mr. S.P. Majmudar, learned advocate appearing for the respondents. 2. By means of the present petition invoking the extra ordinary jurisdiction of this Court under Article 227 of the Constitution of India, the petitioner herein, the plaintiff in Commercial Civil Suit No.51 of 2022 seeks to challenge the order dated 25.11.2025, whereby the Commercial Court has allowed the application under Section-8 of the Arbitration and Conciliation Act, 1996, thereby referring the parties to agitate the dispute before the Arbitrator. 3. The Commercial Court categorically records that the deed of retirement of partner from the Partnership, wherein Clause 24 stipulated about the dispute resolution mechanism through arbitration or conciliation, was relied by the learned advocate appearing for the defendant/applicant therein, to move application under Section-8 of the Act, 1996. Having noticed the Clause-24, the Commercial Court has noted that the monetary relief sought by the plaintiff against the defendants are based on services rendered by him as partner to the Partnership Firm, wherein the petitioner was inducted on retirement of other partners. Clause-24 of the deed of induction on retirement of other partners provides for dispute or differences to be settled through the process of arbitration or reconciliation. It is also noted that the plaintiff is the signatory to the said deed. 4. Challenging the order passed by the Commercial Court, it was sought to be argued by the learned counsel for the petitioner herein, referring to Clause-24 of the Partnership Deed dated 22.02.2013 that the said clause pertains to reference of dispute between the continuing partners. As on the date of induction of the petitioner into the Partnership Firm by way of retirement-cum-partnership deed dated 22.02.2013, there were only four partners in the firm, which is a Chartered Accountant Firm. The petitioner had retired on 01.02.2019 by way of a retirement deed and the claims in the suit are pertaining to the share of the petitioner in the profits of the Partnership Firm. 5.
The petitioner had retired on 01.02.2019 by way of a retirement deed and the claims in the suit are pertaining to the share of the petitioner in the profits of the Partnership Firm. 5. The contention is that with the passage of time, as on the date of retirement of the petitioner, i.e. 01.02.2019 there were eight partners, four of them were not signatory to the partnership deed dated 22.02.2013, whereby the petitioner was inducted and as such, the Clause-24 wherein providing for resolution of dispute or differences among the continuing partners by arbitration or conciliation, cannot be invoked. 6. The submission is that the defendant no.1 in the suit is the Partnership Firm which comprised of seven partners as on the date of institution of the suit, with the retirement of the petitioner herein as on 01.02.2019. With the change in the constitution of the Partnership Firm, the claims raised by the petitioner in the suit cannot be said to be pertaining to the dispute or differences between the continuing partners under Clause 24 of the deed dated 22.02.2013. 7. The contention is that the Commercial Court has, thus, committed an error in referring the dispute to arbitration on the application under Section-8 of the Act’ 1996, moved by the Partnership Firm which would include non-signatories to the deed which contains arbitration clause. Reliance is placed by the Apex Court in the case of Hindustan Petroleum Corporation Ltd. Vs. BCL Secure Premises Pvt. Ltd. reported in 2025 SCC OnLine SC 2746. 8. All these arguments made by the learned counsel for the petitioner do not detain us for long for the simple reason that the petitioner is claiming shares in the profits of the Partnership Firm wherein he was inducted as partner by way of the deed on 22.02.2013 which contained arbitration Clause-24, providing for resolution of dispute or differences through arbitration or conciliation. The question as to whether the non-signatories can be referred to the arbitration proceedings or a reference can be made at the instance of a non-signatories when the dispute primarily pertains to a contract, which contains an arbitration clause is no longer res-integra in view of the decision of the Apex Court in the case of Ajay Madhusudan Patel Vs. Jyotrindra S. Patel reported in 2024 (0) AIJEL-SC 74047. 9.
Jyotrindra S. Patel reported in 2024 (0) AIJEL-SC 74047. 9. Even otherwise, on a query made by the court as to the subsequent deeds of Partnership for induction of new partners over a period of time, i.e. between 2013 to 2019 when the petitioner himself was partner to the firm, it is submitted by the learned counsel for the petitioner that he does not possess the copy any of the Partnership Deeds whereby others were inducted. 10. There is no dispute about the existence of the arbitration clause in the deed which is the basis of induction of the petitioner into the Firm. The dispute raised by the petitioner, thus, flows from a contract which contains an arbitration clause. Within the scope of Section-8 of the Arbitration and Conciliation Act, 1996, the relevant scrutiny has been done by the trial Court and all other questions, which pertain to the arbitrability of the dispute or differences between the parties, are required to be left to be decided in the arbitration proceedings. [Reference: Ajay Madhusudan Patel Vs. Jyotrindra S. Patel (supra)]. 11. We may also refer to the recent decision of the Apex Court in the case of K. Mangayarkarasi Vs. N.J. Sundaresan reported in 2025 (0) AIJEL-SC 75333 wherein the scope of Section-8 of the Arbitration and Conciliation Act, 1996 has been delineated. It is categorically held by the Apex Court therein that when an application under Section-8 of the Act, 1996 is filed before the Civil Court and once there is an arbitration agreement between the parties, a judicial authority before whom an action is brought covering subject matter of arbitration agreement is under a positive obligation to refer parties to arbitration by enforcing the terms of contract. There is no element of discretion left in the Court or judicial authority to obviate legislative mandate of compelling parties to seek recourse to arbitration. 12. Referring to the decision of the Apex Court in the case of A. Ayyasamy v. A. Paramasivam & Ors. reported in (2016) 10 SCC 386 , the test under Section-8 to be followed by the Civil Court or the judicial authority as laid down therein is that the approach of the Civil Court should be not to see whether the Court has jurisdiction but to see whether its jurisdiction has been ousted.
reported in (2016) 10 SCC 386 , the test under Section-8 to be followed by the Civil Court or the judicial authority as laid down therein is that the approach of the Civil Court should be not to see whether the Court has jurisdiction but to see whether its jurisdiction has been ousted. The principle to be followed by the Civil Court is to examine whether there is ouster of jurisdiction in terms or compliance with the procedure under the Special Statute. The legal principle that the general law should yield to the special law — generalia specialibus non derogant, is to be applied by the Civil Court in such a situation. The approach shall not be to see whether there is still jurisdiction in the civil court under the General law. 13. Taking note of the above principles laid down by the Apex Court, in the facts and circumstances of the present case, we do not find any error much less a jurisdictional error in the order impugned. The present petition filed under Article 227 of the Constitution of India deserves to be dismissed, accordingly. 14. The decision relied in the case of Hindustan Petroleum Corporation Ltd. Vs. BCL Secure Premises Pvt. Ltd. reported in 2025 SCC OnLine SC 2746 by the learned counsel for the petitioner, is not applicable to the facts and circumstances of the present case. 15. In view of the above, the present petition stands dismissed. No order as to costs.