BASANT ISPAT UDYOG PVT LTD Vs. BASANT INDUSTRIES

JUDGEMENT

(1.) THIS petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. Petitioners 2 and 3 are the retiring partners of the firm M/s. Basant Industries, Nunhai, Agra - 6. A Retirement Deed dated 31st October, 1995 (hereinafter referred to as the 'Deed') was entered into between the retiring partners and the surviving partners, i.e. respondents 2 and 3. Clauses 3, 4, 5 and 6 of the said Deed, which are relevant for the purpose, read as follows:- "3. That all the rights of the Retiring partners in the firm will stand assigned to the surviving/continuing partners. Meaning thereby that all the interest of the retiring partners on the Assets of the partnership including Quota rights, Power Connections or any other benefit regarding partnership, claims of partnership on the outsider etc. etc. will stand assigned to surviving/continuing partner. 4.That the surviving/continuing partners have taken over the firm M/s. Basant Industries and its units as a going concern as a whole with all its asset, liabilities and outstanding. The retiring partners have nothing to take from the continuing partners. 5.That the continuing partner will manufacture/market Diesel Engine, Pub and Pump Sets under the brand name and trademark of "ATUL SHAKTI" except in the State of U.P. They will not market Generating Sets with brand name of "ATUL SHAKTI". 6.That the retiring partners will manufacture/market Generating Sets in the brand name and style of "ATUL SHAKTI" in whole of India and Diesel Engine in Uttar Pradesh only. It is hereby made clear that they will not sell or market Diesel Engine, Pump and Pump Sets with brand name "ATUL SHAKTI" except in Uttar Pradesh." Clause 10 of the Deed, which provides for resolution of the dispute by an Arbitrator, reads as follows:- "That if any dispute or difference arises in future between the partners to this Deed, their representative or heirs with regards to the construction of this instrument and respecting the accounts, Profit and loss of the business or the rights and liabilities of the partners upto the date of the deed or any matter relating to the firm or relating to the construction & interpretation of this deed, the same shall be referred to arbitration in accordance with the provisions of the Indian Arbitration Act." Petitioners sent letter-cum-notice dated 14.08.1998 (Annexure-3 to the petition) to the respondents alleging that they were manufacturing and marketing Diesel Engines, Pumps & Pump Sets under the brand name and trademark of "Atul Shakti" within the State of Uttar Pradesh which, according to them, they were not entitled. Accordingly, they gave notice to the respondents for appointment of Arbitrator and when the Arbitrator was not appointed, this petition was filed for appointment of Arbitrator. Ms. Sunita Agarwal, appearing on behalf of the petitioners, submits that agreement provides for resolution of dispute by an Arbitrator. Further, there is a dispute between the petitioners and the respondents and the petitioners have given notice to the respondents for appointment of Arbitrator but no Arbitrator has been appointed and as such it is a fit case in which the Arbitrator be appointed by this Court. Mr. Madhur Prasad, appearing on behalf of the respondents, submits that the dispute is of such a nature that it can not be adjudicated by the Arbitrator and requires adjudication under the provisions of the Trade and Merchandise Marks Act, 1958. He also points out that, in fact, the petitioners had taken recourse to the remedy provided under the said Act, hence this petition for appointment of Arbitrator is absolutely misconceived. Having appreciated the rival submissions advanced by the counsel for the parties, I find substance in the submission of Ms. Agarwal. Here, the Deed incorporates certain terms and conditions for use of trademark "Atul Shakti". There is a dispute in regard thereto in terms of the Deed and not in terms of the provisions of the Trade and Merchandise Marks Act, 1958. In that view of the matter, I am of the opinion that when there is an arbitration clause in the agreement and there is a dispute between the parties flowing from the agreement, Arbitrator can resolve the dispute. Accordingly, I appoint Hon'ble Mr. Justice M.C. Jain, a retired Judge of this Court, residing at A-61, Sector - 27, NOIDA, as the Arbitrator. His fee would be Rs. 5,000/- per sitting, which shall be shared by the parties equally. Application stands allowed.