PRITPAL SINGH BHATIA Vs. YOGESHWAR NATH

JUDGEMENT

(1.) This appeal has been preferred to challenge an order passed by the Trial Court allowing the application of the respondents under Section 33 of the Arbitration Act. Since under Section 39 of the Act, no appeal lies against an order passed on an application under Section 33 of the Act, learned counsel for the respondent has objected to the maintainability of the appeal. It is submitted by learned counsel for the appellant that as no appeal lies again an order deciding application under Section 33 of the Act, this appeal may be treated as a Civil Revision. In view of the submissions made, I treat it as a Civil Revision and the Office is directed to register the same as such.

(2.) The parties to this petition were partners in a firm being run under the name and style of `M/s Consistent Clothing'. The respondents besides being partners of the firm were also directors of General Commerce Ltd. which was also engaged in the similar business of import and export. A consignment of trims was stated to have been imported by the General Commerce Ltd. The said consignment was sold by the General Commerce Ltd. to the partnership firm. The company besides claiming the price of trims also claimed customs duty and sales tax from the partnership firm. After making the payment of the price, customs duty and sales tax, the firm alleged that the respondents in their capacity as partners of the firm had acted in a fraudulent manner and have misled the petitioners and the firm in making payment of the customs duty and sales tax which the firm was allegedly not liable to pay. The petitioner, therefore, raised a dispute about the refund of this amount from the respondents and sought the same to be referred to an Arbitrator. The petitioner also appointed their arbitrator and called upon the respondents to appoint their Arbitrator. C laiming that as the respondents had failed and neglected to appoint their arbitrator, the arbitrator appointed by the petitioner was appointed the sole Arbitrator. The reference of the disputes to the Arbitrator was challenged by the respondents by filing application under Section 33 of the Arbitration Act. By the impugned judgment, the learned Additional District Judge was pleased to allow that application. It was held that the disputes sought to be raised by the petitioner did not arise under the partnership deed and they could thus not be referred to the Arbitrator. Aggrieved by the judgment of the learned Additional District Judge, the petitioner has filed the present petition.

(3.) In the meantime, the respondents had given a notice to dissolve the partnership firm and the disputes arising between the partners were sought to be referred to the Arbitrator to be appointed in terms of the partnership deed. The respondents appointed their Arbitrator and called upon the petitioner to appoint his Arbitrator so as to enter upon the reference and decide the disputes which had arisen between the parties under the partnership deed. The petitioner in his reply to the notice of the respondent stated that he had already appointed an Arbitrator and he would continue to be the Arbitrator of the petitioner and there was thus no need for him to appoint another Arbitrator. This reply of the petitioner was not considered appropriately by the respondents and they, therefore, informed him that as he had failed to appoint an Arbitrator within 15 days of the receipt of the notice by the petitioner, the Arbitrator appointed by the respondent had become the sole Arbitrator. On receipt of this reply, the petitioner filed an application under Section 8 of the Arbitration Act in High Court. That application was disposed of by the Court by its judgment dated 21.9.2001. The Court while deciding that application held that as the petitioner had already appointed an Arbitrator and had also stated that he was again appointing the same person as Arbitrator, there was proper nomination of the Arbitrator by the petitioner and the petitioner had exercised his right properly by appointing him as Arbitrator. The Court also held that as in any case even if the Arbitrator appointed by the respondent had become the sole Arbitrator, the Court had the power to allow further time to the defaulting party and it was eminently fit case to allow further time to the petitioner and even if it is presumed that there was some delay, the petitioner having appointed his Arbitrator on 9.6.1995, the same duly complied with the provisions of Section 9 of the Arbitration Act. One of the other issues framed by the Court in that case was: