ABHISHEK SONI Vs. SANJEEV SONI

JUDGEMENT

(1.) This application under Sec. 11(5) of the Arbitration and Conciliation Act, has been filed by applicant Abhishek Soni for appointment of sole Arbitrator. Applicant and respondent entered into a partnership deed on 04.02.1991 for carrying on business of medicines on retail and wholesale basis with effect from 04.02.1991 from Nayapura, Kota, as well as such other places as may be mutually agreed upon by and between the partners, under the name and style of M/s. Shree Dhar Medical. Both, applicant and respondent, are real brothers. They in accordance with the terms and conditions of the said partnership deed, opened a joint bank account at the Station Road branch of State Bank of Bikaner & Jaipur, in Kota city, which remained operative till 2008 when respondent approached the applicant to close the joint bank account in order to shift it to the Collectorate Circle Branch of State Bank of Bikaner & Jaipur, Nayapura, Kota. However, subsequently, the applicant learnt that respondent went alone and opened a bank account in Collectorate Circle Branch of State Bank of Bikaner & Jaipur, Nayapura, Kota, even without informing the applicant. Respondent started creating hurdles in the way of applicant and coming of the applicant to the shop and prevented him from working there. He refused to show him the books of accounts of the partnership firm. Therefore, applicant served a notice through Advocate on 30.01.2010 calling upon him to render the books of accounts and allow applicant to participate in the working of the business as well as given him share in profits. Respondent did not give any reply thereto even after receiving legal notice dated 30.01.2010, as a result of which, applicant was constrained to file a civil suit for rendition of account and permanent injunction in the court of District Judge, Kota. Respondent filed an application on 24.05.2010 under Sec. 8 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act of 1996'), along -with a duly certified copy of partnership deed dated 04.02.1991. Respondent also filed written statement to the main suit on 16.07.2010, in which he maintained that partnership firm was constituted at the behest of his father and respondent never gave any share in the profit of business and that there was no partnership between the parties. Applicant in fact never worked on the shop, therefore, he was not entitled to any share in the profit of business. The said court passed an order on 10.09.2013 on the application under Sec. 8 of the Act of 1996, observing that partnership deed dated 04.02.1991 contained clause No. 9 in respect of arbitration and therefore directed both the parties to take required steps for appointment of arbitrator. Applicant thereupon sent a notice seeking appointment of Arbitrator, to respondent through Advocate on 31.10.2013, and also calling upon Respondent to provide all books of accounts of the partnership firm since 1991, and pay the amount due to in accordance with the partnership deed dated 04.02.1991. He proposed the names of three retired Judges of this court to be appointed as sole Arbitrator. Despite receiving legal notice, respondent did not reply to the same. Hence, present application.

(2.) Ms. Sukriti Kasliwal, learned counsel for applicant, has reiterated all the arguments mentioned in the application and submitted that when Respondent, despite order of the court of District Judge passed under Sec. 8 of the Act of 1996, supra, and service of notice by the applicant, failed to appoint the Arbitrator, applicant was left with no option except to approach this court under Sec. 11 (5) of the Act of 1996. Prayer is therefore made that this court should appoint an Arbitrator for resolution of the dispute between the parties.

(3.) Shri Pradeep Singh, learned counsel for respondent, opposed the application and submitted that neither was there any partnership between the parties nor were they carrying on joint business. Respondent was carrying on his own business and applicant had no concern therewith. Applicant is trying to take undue benefit by adopting pressure tactics. The arbitration would come into picture only if there is a clause of arbitration in the contractual deed. It is absolutely wrong to say that the parties established business under the partnership firm. Even if it is accepted that business was being carried on by the partnership firm, the firm being unregistered in view of the bar contained in Sec. 69 of the Indian Partnership Act, 1932 (for short, 'the Act of 1932'), no action can be taken thereabout either before any civil court or under the Act of 1996. Learned counsel in this behalf also relied on provisions of Sec. 20 of the Arbitration Act, 1940. Relying on judgment of the Supreme Court in Delhi Development Authority v/s. Kochhar Construction Work and Another - : (1998) 8 SCC 559, learned counsel submitted that arbitral proceedings, at the instance of unregistered firm, are statutorily barred by virtue of provisions contained in Sec. 69 of the Act of 1932.