RAMESH KUMAR AGARWAL Vs. NARESH KUMAR AGARWAL

JUDGEMENT

(1.) Heard Sri Vinay Khare, learned Senior Advocate, assisted by Ms. Aarushi Khare, learned counsel for the appellant and Sri Rishabh Agarwal, learned counsel for the respondents.

(2.) This appeal, filed under Section 37(1) of Arbitration and Conciliation Act, 1996, ("Act, 1996") is directed against the judgment and order dated 05.03.2021, passed by the Commercial Court, Jhansi, in Misc. Case No. 16 of 2020 (Ramesh Kumar Agarwal Vs. Naresh Kumar Agarwal and another) holding that the Commercial Court would lack jurisdiction under Section 9 of Act, 1996, on the Arbitrator being appointed, accordingly, ordered to return the record under Order 7 Rule 10 of Code of Civil Procedure, 1908 ("CPC").

(3.) The respondents executed a partnership deed to constitute a firm in the name and style, "M/s Shanti Construction", for the business of stone crushing or any other business as agreed. As per the deed, the profit amongst partners was to be divided at 33.34 per cent to appellant and 33.33 per cent to each respondent. A dispute arose with regard to share of profit, non payment of salary, denial to access books of accounts, stock material and not allowing the appellant to be involved in the day to day working of the firm. The appellant invoked the arbitration clause of the deed. Respondents did not agree to the Arbitrator proposed by the appellant and also failed to propose an Arbitrator. The appellant approached this Court for appointment of an Arbitrator under Section 11 of the Act, 1996, by filing Arbitration Application No. 57 of 2020. During pendency of the application under Section 11, appellant filed a petition under Section 9 before Commercial Court, Jhansi, for interim measure to protect the interest of the appellant. The respondents filed written statement. The Commercial Court adjourned the matter for 05.03.2021. In the meantime, this Court appointed an independent Arbitrator vide order dated 23.02.2021. On the matter being taken up, Commercial Court passed the impugned order holding therein that on appointment of an Arbitrator, Commercial Court would lack jurisdiction to proceed under Section 9 of Act, 1996, accordingly, ordered return of the record under Order 7 Rule 10 CPC relegating the parties to take remedy before the Arbitrator under Section 17.