Sh.Sukhwinder Singh And Another vs Smt.Kusum Sharma on 2 November, 2015

[Cites 45, Cited by 1]

Himachal Pradesh High Court

Sh.Sukhwinder Singh And Another vs Smt.Kusum Sharma on 2 November, 2015

Bench: Tarlok Singh Chauhan

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .

CMPMO No.401 of 2015.

Judgment reserved on: 15.10.2015.

Date of decision: November 02 , 2015.

Sh.Sukhwinder Singh and another .....Petitioners.





                                                of
                                    Versus
    Smt.Kusum Sharma                                                .....Respondent.
                        rt

    Coram

The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. Whether approved for reporting?1Yes For the Petitioners : Mr.Ashok K.Tyagi, Advocate.

For the Respondent : Mr.Ajay Sharma, Advocate.

Tarlok Singh Chauhan, Judge.

This petition under Article 227 of the Constitution of India takes exception to the order passed by the learned Civil Judge (Junior Division) Nahan, on 14.09.2015 whereby the application filed by the defendants-petitioner s for rejection of the plaint came to be dismissed.

The facts as are necessary for the adjudication of this petition may be stated thus.

2. The respondent-plaintiff filed a suit for prohibitory injunction in respect of the suit property comprised in Khata Khatauni No.78/99 min, Khasra No.277/219/121/2, measuring 05-00 bigha which was in the shape of a built-up area and also vacant land in Village Meerpur Gurdwara, Tehsil Nahan, District Sirmaur. It was alleged that after registration of sale deed No.646/2011 dated 23.11.2011, a partnership Whether the reporters of the local papers may be allowed to see the Judgment?No ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 2 firm in the name and style of M/s Lavender Dairy and Milk Products was constituted which purchased the land and mutation No.279 dated .

02.12.2011 was also attested in favour of the firm. On 30.06.2015, a partnership deed No.122/2015 came to be registered which comprised of the plaintiff, her husband Shri L.D.Sharma and the petitioners. The shares of the parties were 50% each. It was alleged that the plaintiff-

of respondent started causing illegal interference and began creating hindrance in running of the unit rt and, therefore, taking recourse to Clause No.5 of the partnership deed, the petitioners took over the firm from the plaintiff-respondent and were in physical possession and control of the same.

3. The main plea taken in the application for rejection of the plaint was that the suit was barred by the provisions of Arbitration and Conciliation Act, 1996 (for short 'Arbitration Act') in view of Clause-16 contained therein which stipulated that in the event of any dispute that may arise between the partners, the same shall be referred to the Arbitrator to be mutually appointed by the parties and whose decision shall be final.

4. The plaintiff-respondent in response to the application filed reply wherein it was stated that since partnership deed No.122/2015 has already been dissolved vide dissolution deed No. 150/2015, as per Sections 39, 41 (b) and Section 42 of the Indian Partnership Act, 1932 (for short 'Partnership Act'), therefore, in such eventualities, the petitioners could not fall back on the arbitration clause contained in the deed which was non-existent.

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5. The petitioners-defendants filed rejoinder wherein, for the first time, they contended that the suit was not maintainable in view of .

the specific bar contained in Section 69(2) of the Partnership Ac t.

6. The learned trial Court dismissed the application by concluding that since complicated questions of law and facts were involved in the case, the same could not be referred to the Arbitrator as of it was the Civil Court alone which could try and adjudicate such issues.

Insofar as the question regarding suit rt being not maintainable under Section 69(2) of the Partnership Act is concerned, this contention was repelled by concluding that since the partnership firm had been dissolved and the relief sought was only for permanent prohibitory injunction, the same has nothing to do and did not arise out of the rights of the partnership deed and thus the suit was maintainable.

I have heard the learned counsel for the parties and have also gone through the records of the case.

7. Clause-16 of the Partnership Deed dated 29th June, 2015 reads as under:-

"That any dispute that may arise amongst the partners shall be referred to the arbitrator appointed mutually by the partners and his decision shall be final and binding to both the partners."

8. It is contended by Shri Ashok K.Tyagi, learned counsel for the petitioners that even if the partnership deed has been dissolved, the arbitration clause therein would still remain alive and operative and in support of his submission, he has relied upon the judgment of the Hon'ble Supreme Court in Ravi Prakash Goel versus Chandra Prakash Goel & Anr. AIR 2007 SC 1517, Branch Manager, M/s Magma Leasing & Finance Ltd., & Anr. versus Potluri Madhavilata & Anr. AIR 2010 SC 488, M/s Reva Electric Car Co. P. Ltd. versus ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 4 M/s Green Mobil AIR 2012 SC 739, a judgment of the learned Single Judge of the Delhi High Court in Himalya International Ltd. versus .

Simplot India Foods Pvt. Ltd., and another, Civil Suit (OS) No.1231/2013, decided on 17.01.2014 and a recent judgment of the Hon'ble Supreme Court in M/s Sundaram Finance Limited and another versus T.Thankam AIR 2015 SC 1303.

9. In Ravi Prakash Goel versus Chandra Prakash Goel & Anr. AIR 2007 SC 1517, the Hon'ble Supreme Court held that on rt dissolution of the firm, the arbitration clause does not come to an end and so if a dispute is arisen during the lifetime of deceased-partner, his legal representatives would be entitled to take proceedings under Section 20 of the Arbitration Act, 1940. It is apt to reproduce paras 23 and 24 of the judgment which reads thus:-

"23. On the dissolution of the firm, the arbitration clause does not come to an end and so if a dispute had arisen during the lifetime of the deceased partner, his legal representatives would be entitled to take proceedings under Section 20 of the Arbitration Act, 1940.

24. When a partner dies and the partnership comes to an end it is not only right but also the duty of the surviving partner to realize the assets for the purpose of winding up of the partnership affairs including the payment of the partnership debts. However, it is true that in a general sense the executors or administrators of the deceased partner may be said to have a lien upon the partnership assets in respect of his interest in the partnership and taking the partnership account."

10. In Branch Manager, M/s Magma Leasing & Finance Ltd., & Anr. versus Potluri Madhavilata & Anr. AIR 2010 SC 488, it was held by the Hon'ble Supreme Court that arbitration clause is a collateral term in the contract which relates to resolution of disputes, and not performance. Therefore, even if the performance of the ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 5 contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the .

purpose of resolution of disputes arising under or in connection with the contract. It was held:-

"16 . In the case of National Agricultural Co-op. Marketing of Federation India Ltd. v. Gains Trading Ltd. (2007) 5 SCC 692, this Court held thus:

rt "6. The respondent contends that the contract was abrogated by mutual agreement; and when the contract came to an end, the arbitration agreement which forms part of the contract, also came to an end. Such a contention has never been accepted in law. An arbitration clause is a collateral term in the contract, which relates to resolution disputes, and not performance. Even if the performance of the contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the purpose of resolution of disputes arising under or in connection with the contract. (Vide Heyman v. Darwins Ltd.[(1942)AC356], Union of India v. Kishorilal Gupta & Bros (AIR 1959 SC 1362) and Naihati Jute Mills Ltd. v. Khyaliram Jagannath (AIR 1968 SC

522). This position is now statutorily recognised.

Sub-section (1) of Section 16 of the Act makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, an arbitration clause which forms part of the contract, has to be treated as an agreement independent of the other terms of the contract; and a decision that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause."

17. Recently, in the case of P.Manohar Reddy & Bros. vs. Maharashtra Krishna Valley Development Corporation And Ors (2009 AIR SCW 1356), while dealing with the argument of the respondent therein that in terms of the contract the claim for extra work or additional work should have been raised during the pendency of the contract itself and not after it came to an end, this Court considered the concept of separability of the arbitration clause from the contract and made the following observations :

"27. An arbitration clause, as is well known, is a part of the contract. It being a collateral term need not, in ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 6 all situations, perish with coming to an end of the contract. It may survive. This concept of separability of the arbitration clause is now widely accepted. In .

line with this thinking, the UNCITRAL Model Law on International Commercial Arbitration incorporates the doctrine of separability in Article 16(1). The Indian law -- the Arbitration and Conciliation Act, 1996, which is based on the UNCITRAL Model Law, also explicitly adopts this approach in Section 16(1)(b), which reads as under:

of "16. Competence of Arbitral Tribunal to rule on its jurisdiction.--(1) The Arbitral Tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the rt existence or validity of the arbitration agreement, and for that purpose,--

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the Arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause."

(emphasis supplied) Modern laws on arbitration confirm the concept.

28. The United States Supreme Court in a recent judgment in Buckeye Check Cashing Inc. v.

Cardegna [546 US 460 (2005)] acknowledged that the separability rule permits a court "to enforce an arbitration agreement in a contract that the arbitrator later finds to be void". The Court, referring to its earlier judgments in Prima Paint Corpn. v. Flood & Conklin Mfg. Co.[18 L.Ed. 2d 1270] and Southland Corpn. v. Keating [465 US 1 (1984)], inter alia, held:

"Prima Paint and Southland answer the propositions. First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract."

But this must be distinguished from the situation where the claim itself was to be raised during the subsistence of a contract so as to invoke the arbitration agreement would not apply."

18. The statement of law expounded by Viscount Simon, L.C. in the case of Heyman as noticed above, in our view, equally applies to situation where the contract is terminated by one party on account of the breach committed by the other ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 7 particularly in a case where the clause is framed in wide and general terms. Merely because the contract has come to an end .

by its termination due to breach, the arbitration clause does not get perished nor rendered inoperative; rather it survives for resolution of disputes arising "in respect of" or "with regard to" or "under" the contract. This is in line with the earlier decisions of this Court, particularly as laid down in Kishori Lal Gupta & Bros. (AIR 1959 SC 1362).

19. In the instant case, clause 22 of the hire purchase agreement that provides for arbitration has been couched in rt widest possible terms as can well be imagined. It embraces all disputes, differences, claims and questions between the parties arising out of the said agreement or in any way relating thereto. The hire purchase agreement having been admittedly entered into between the parties and the disputes and differences have since arisen between them, we hold, as it must be, that the arbitration clause 22 survives for the purpose of their resolution although the contract has come to an end on account of its termination."

11. In M/s Reva Electric Car Co. P. Ltd. versus M/s Green Mobil AIR 2012 SC 739, it was held by the Hon'ble Supreme Court that even after the termination of the Memorandum of Understanding (MOU) arbitration agreement contained therein would continue and the dispute between the parties relating to the subject matter of relationship between the parties which came into existence through the 'MOU' will have to be referred to the Arbitrator. It is apt to reproduce para 34 of the judgment which reads thus:-

"34. The aforesaid provision has been enacted by the legislature keeping in mind the provisions contained in Article 16 of the UNCITRAL Model Law. The aforesaid Article reads as under :-

"Article 16 - Competence of arbitral tribunal to rule on its jurisdiction -

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(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration .

agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2).............................................................. (3)..............................................................."

of Under Section 16(1), the legislature makes it clear that while considering any objection with respect to the existence or validity of the arbitration rtagreement, the arbitration clause which formed part of the contract, has to be treated as an agreement independent of the other terms of the contract. To ensure that there is no misunderstanding, Section 16(1)(b) further provides that even if the arbitral tribunal concludes that the contract is null and void, it should not result, as a matter of law, in an automatic invalidation of the arbitration clause. Section 16(1)(a) presumes the existence of a valid arbitration clause and mandates the same to be treated as an agreement independent of the other terms of the contract. By virtue of Section 16(1)(b), it continues to be enforceable notwithstanding a declaration of the contract being null and void. In view of the provisions contained in Section 16(1) of the Arbitration and Conciliation Act, 1996, it would not be possible to accept the submission of Ms.Ahmadi that with the termination of the MOU on 31st December, 2007, the arbitration clause would also cease to exist. As noticed earlier, the disputes that have arisen between the parties clearly relate to the subject matter of the relationship between the parties which came into existence through the MOU. Clearly, therefore, the disputes raised by the petitioner needs to be referred to arbitration. Under the arbitration clause, a reference was to be made that the disputes were to be referred to a single arbitrator. Since the parties have failed to appoint an arbitrator under the agreed procedure, it is necessary for this Court to appoint the Arbitrator."

12. In Himalya International Ltd. versus Simplot India Foods Pvt. Ltd., and another, Civil Suit (OS) No.1231/2013, decided on 17.01.2014, it was held by the Delhi High Court that no suit covered under the arbitration clause would be maintainable as the same would be barred under Section 5 of the Arbitration Act. It is apt to reproduce paras 8 to 14 of the judgment which reads as under:-

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"8. Section 5 of the Arbitration & Conciliation Act reads as under:

.

"5. Extent of judicial intervention. Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."

9. This Court in the case of Shri Roshan Lal Gupta vs. Shri Parasram Holdings Pvt. Ltd ., 157(2009) DLT 712 in paras 21 of and 23 held as follows:-

"21. There is yet another reason for me to hold so rt and it is reflected in the substantial questions of law framed on 29th January, 2009. The relief of declaration is guided by Section 34 and the relief of permanent injunction by Section 41 of the Specific Relief Act. Grant or non-grant of declaration is in the discretion of the court. A permanent injunction cannot be granted under clause (h) of Section 41 when equally efficacious relief can be obtained by any other usual mode of proceeding except in case of breach of trust. The discretion of the court ought not to be exercised in a manner so as to adversely affect the arbitral proceedings or to negate the purport of the 1996 Act. Similarly, it is not as if, if injunction restraining the arbitration is not given, the party challenging the validity of the arbitration agreement would be rendered remediless. The said party has the equally efficacious remedy of Sections 16 and 34 of the Arbitration Act. The suit for declaration and permanent injunction is found to be barred by provisions of Specific Relief Act also.

23. In my view, the law with respect to the adjudication by the courts while dealing with an application under Section 8 or Section 11 of the Act would not apply to the suit. Firstly, the proceedings under Sections 8 and 11 are provided for by the Act itself while the suit challenging the validity of the arbitration agreement has not been provided for in the Act and is barred under Section 5 of the Act. Thus merely because while interpreting Section 8 and Section 11 it has been held that the court before referring the parties to arbitration should satisfy itself of the existence of the arbitration agreement would not justify the institution of a suit for the same relief. Section 8 application is filed when a substantive suit is already before court and the question to be determined is whether that suit is to proceed or the parties are to be referred to arbitration. Similarly, Section 11 is an application for appointment of the arbitrator. Merely, because the court when faced with such provisions as provided for under the Act is to satisfy itself of the existence of the agreement cannot be understood to lay down ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 10 that it is open to a party to even where no suit for substantial relief and application under Section 11 has been filed, an independent suit only for the .

relief of challenging the validity of the arbitration agreement can be instituted. I, therefore, do not feel the need to refer to the judgments filed by the counsel for the petitioner/appellant alongwith the synopsis on Section 8 and Section 11 of the Act."

10. In those facts, the Court held that a suit for declaration that an agreement containing an Arbitration Clause is forged, of fabricated, unenforceable and null and void and for injunction restraining the arbitration does not lie and is barred under Section 5 of the Arbitration and Conciliation Act and under rt Sections 34 and 41 (h) of the Specific Relief Act read with Section 16 of the Arbitration Act. The above judgment was again reiterated by the said Court in the case of Shree Krishna Vanaspati Industries (P) Ltd. vs. Virgoz Oils and Fats Pte Ltd. and Anr ., MANU/DE/1681/2009.

11. Similarly, the Hon'ble Supreme Court in the case of Aurohills Globe Commodities Ltd. vs. Maharashtra STC Ltd., (2007) 7 SCC 120 in para 13 held as follows:-

"13. In the present case, M/s Aurohill Global Commodities Ltd. has filed this petition under Section 11(9) read with Section 11(5) of the said Act. Section 11 falls in Part I. The alleged contract is an international transaction, therefore, this Court has the power to appoint an arbitrator in accordance with the terms of the contract. Under the said Act, the Arbitral Tribunal has very wide powers. The powers of the courts have been curtailed. The Arbitral Tribunal's authority under Section 16 of the said Act is not confined to the width of its jurisdiction but goes to the very root of its jurisdiction (see Secur Industries Ltd. vs. Godrej & Boyce Mfg. Co. Ltd.). In the present case, therefore, the question as to whether the draft purchase order acquired the character of a concluded contract or not and the question as to whether the contract was non est can only be decided by the arbitrator. Therefore, the aforestated question have got to be decided by arbitration proceedings. ........"

12. The case of Clearwater Capital Partners (Cyprus) Ltd., Vs. Gurmeher Singh Majithia (Supra) also rela ted to a case where the suit was filed seeking the relief of declaration that the Shareholder Subscription Agreement and Shareholder ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 11 Agreement are illegal and therefore void ab intio and for an injunction restraining defendant No. 1 from initiating any legal .

action for enforcement of any terms of the said two Agreements including but not limited to invocation of the arbitration clause. This Court held as under:

"Under Section 33 of the 1940 Act, the Arbitrator could examine the question of the existence or validity of the arbitration agreement. Section 16 of of the Act not only preserves this power of the arbitrator but in fact expands it. The wording of Section 16(1) indicates that the arbitrator could rule on his own jurisdiction "including ruling on any rt objections with respect to the existence or validity of the arbitration agreement". The word "including"

shows that the scope of the examination of the questions concerning the jurisdiction of the arbitral tribunal is not limited to the existence of the arbitration agreement itself. Therefore, it is inconceivable that where there is a violation of mandatory requirement like Section 21 of the Act, the arbitrator cannot examine that question as well. If the existence of the arbitration agreement is a sine qua non for commencement of arbitration proceedings and if such a question is to be examined only by the arbitrator, it is difficult to accept the proposition that the question whether a valid notice under Section 21 has been received by the respondent in a claim petition, cannot be gone into by the arbitrator."

13. Based on the above legal position this Court held that no suit for such a relief can be entertained by the court when defendant No. 1 had prior thereto elected to refer the disputes for arbitration in the manner envisaged in the Shareholder Agreement.

14. The legal position that follows aforesaid is that the issues that are raised by the plaintiff, namely, non -compliance of Clause 12.3(a) and Clause 12.3(b) are issues which have to be gone into by the Arbitral Tribunal. Section 5 of the said Act takes away the jurisdiction of the civil court. The said statutory provision has to be given effect to."

13. In M/s Sundaram Finance Limited and another versus T.Thankam AIR 2015 SC 1303, it was held by the Hon'ble Supreme Court that once an application in due compliance of Section 8 of the ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 12 Arbitration Act is filed, the approach of the Civil Court should be not to see whether the Court has jurisdiction, it has to see whether its .

jurisdiction has been ousted. It is apt to reproduce para 15 of the judgment which reads thus:-

"15. Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be of not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to rt the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law -

generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court."

14. Shri Ashok K.Tyagi, learned counsel for the petitioners, would further argue that in view of the specific bar imposed by sub-

section (2) of Section 69 of the Partnership Act, the suit is not maintainable. He in support of his submission has relied upon Jagdish Chandra Gupta versus Kajaria Traders (India) Ltd. AIR 1964 SC 1882, Loonkaran Sethia etc. versus Mr.Ivan E.John and others etc. AIR 1977 SC 336, M/s Shreeram Finance Corporation versus Yasin Khan and others AIR 1989 SC 1769, Krishna Motor Service by its partners versus H.B. Vittala Kamath (1996) 10 SCC 88, M/s Raptakos Brett & Co. Ltd versus Ganesh Proeprty AIR 1998 SC 3085. The ratio in all the aforesaid judgments is that sub-section (2) of Section 69 of the Partnership Act is a penal provision which deprives ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 13 the plaintiff of his rights to get the case examined on merits by the Court and simultaneously deprives the Court of its jurisdiction to .

adjudicate on the merits of the controversy between the parties until or unless the plaintiff is a registered partnership firm and since the provision is mandatory in nature, the same would make the suit incompetent on the very threshold.

15. On the other hand, Shri Ajay Sharma, learned counsel for the respondent, has made three-fold submissions. His first contention rt is that the provisions of the Arbitration Act are not at all attracted to the instant case for the simple reason that the suit does not arise out of or does not even touch the agreement where the arbitration clause is contained, rather the same is independent of it. His second submission is that nowhere in the application had the petitioners invoked the provisions of Section 69(2) of the Partnership Act and it is only in the rejoinder that this plea, for the first time, has been raised. That being so, the plea of non compliance of Section 69(2) of the Partnership Act cannot be even looked at as it is settled law that the pleadings only comprise of the plaint and the written statement. His third submission is that the suit is not based on the breach of any covenant of the agreement, rather the relief claimed in the suit is independent of the partnership deed which otherwise stands dissolved.

16. In support of his submissions, learned counsel for the respondent has relied upon the judgments of the Madras High Court in The Employees in the Caltex (India) Ltd. Madras and another versus The Commissioner of Labour and Conciliation Officer, Government of Madras and another AIR 1959 Madras 441, D.C.Upreti versus B.D. Karnatak AIR 1986 Allahabad 32 and ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 14 Chamunda Spun Pipe Industry versus Ishwar Dass and others (1996) II ACC 261 (DB). The ratio which can be deduced from a .

reading of the aforesaid judgments is that any suit which does not arise out of a contract between the parties would not attract the penal provisions of sub-section (2) of Section 69 of the Partnership Act.

17. In order to appreciate the rival contentions of the parties, of it is necessary to peruse the plaint and it would be evident from a perusal thereof that though the suit is one for permanent injunction, but rt the claim essentially arises out of the covenant as contained in the partnership deed dated 29.06.2015 as is evident from the averments contained in paragraphs 5 to 8 of the plaint which read thus:-

"5. That the defendants contacted the plaintiff and her husband at their residence and also interested to see the said firm of the plaintiff and in this connection, they used to visit in the firm of the plaintiff and also properly saw the function of the firm and ultimately in the month of June, 2015 the defendants requested the plaintiff and her husband to do the business in the firm with them and in this connection the defendants promised to become the partners in the said firm and also ready to invest the amount for future loss and profits in the production of the said firm and for this purpose also the partnership deed dated 3.6.2015 was mutually prepared by them and in which the share of the parties i.e. plaintiff and her husband of 50% and the defendants also 50% share for future loss and profit in the said firm and it was also mutually agreed that the defendant will invest Rs.50,00,000/- as fresh Capital within the period of 10 days for the smooth running of the business. This deed was also got notorised by the parties but the defendants before investment of the above amount stated that this deed should have been got attested and registered with the Sub Registrar, Nahan and thereafter they will invest the amount for future loss and profit in the firm and also mutually agreed that a fresh bank account of the firm will be opened in any scheduled Nationalised bank and the entire investment will be made through the fresh bank account of the firm. The defendants theirselves and ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 15 through their skilled persons enquired the matter of the land as well as property and the loan of the firm.

.

6. That the defendants took the deed which was prepared on 3.6.2015 (3rd June, 2015) from the plaintiff by stating that they will prepare the deed on the same terms and conditions of the deed dated 3.6.2015 for registration the same with the Sub Registrar, Nahan and on 29.6.2015 the defendants prepared the fresh deed of partnership in the absence of the plaintiff and of her husband and they called the plaintiff and her husband on 30.6.2015 at about 4.00 P.M. for obtaining the signature and when the plaintiff and her husband requested them to readover rt and explain the same to them, but the defendants stated that the same are based on the terms and conditions of the partnership deed dated 3.6.2015 and further stated that they have not made any change, alteration and addition in the fresh deed to the deed of 3.6.2015. In this way the defendants as have already gained the faith of the plaintiff and her husband obtained the signature on the fresh deed prepared on 29.6.2015 in the absence of plaintiff and her husband, without going through the plaintiff and her husband of the contents of the same as well as without readover and explain by themselves and also scriber and identifier and also presented to the Sub Registrar, Nahan Distt. Sirmaur, where the Sub Registrar, Nahan did also not ask about the same from the plaintiff and her husband as the things had already been manipulated by the defendants witnesses and scriber including the identifier, and where the signature were also obtained in good faith, which were also put by the plaintiff and her husband at the instance of the defendants in good faith.

7. That when the plaintiff visited to the office of the Tehsildar, Nahan and met with the dealing hand for obtaining the registered deed No.122/2015 and gone through the contents of the same of the copy of the same, then he came to know that the deed No.122/15 had been taken by the defendants and the plaintiff and her husband found major alteration and additions in the deed No.122 in respect of the cash payment of Thirty lacs as well as takeover the firm when no such type of line /words were in the deed No. 3rd June, 2015 and contacted the defendants as to why these words and lines were added by ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 16 them when no such type of payment has ever been made by them to the plaintiff and her husband, in cash, then they .

promised that they will rectify their mistake and get the deed No.122 be cancelled by them but till 13.7.2015 , the defendants did not turn up and rectify their mistake, the plaintiff and her husband issued the notice on 13.7.2015 to the defendants which was sent to the defendants through postal receipt on 14.7.2015 by giving the time of 7 days to get the deed No.122 of be cancelled within 7 days and after receipt of this notice, they did not turn up and the deed No.122 was got dissolved as per the provisions of the rt Partnership Act, 1932 vide deed No.150/2015 by the plaintiff and her husband. The both the deeds are enclosed herewith.

8. That since the property as well as the firm is in existence and also in the owner in possession of the plaintiff and her husband on the spot and the defendants are creating nuisance in the said firm by creating interference in the same without any right, title and interest and on 3.8.2015 they broken the lock of main gate of the firm and the report to this effect was lodged with the Police. The plaintiff/her husband put the fresh lock on the main gate and when the Police called the defendants for investigation then they threatened that they will use the Trademark and name of the firm M/s Lavender Dairy and Milk Products for defaming the firm in the Market by any means and for this purpose, they are also trying to create the evidence, thus the plaintiff and her husband has also reasonable apprehension that the name and Trade Mark of the firm of the plaintiff may not be misused and also defamed in the market by the defendants. The plaintiff and her husband have also come to know that the same can be misused by them to harm the plaintiff's reputation in the market alongwith the said firm."

18. Here, it shall also be apt to reproduce the relief as claimed in the suit which reads thus:-

"It is, therefore humbly prayed that a decree of permanent injunction qua the suit property comprised in Khata/Khatauni No.78/99 min Khasra No.277/219/121/1/2 measuring 5.0 bigha situated at Mauza and Village Meerpur Gurudwara Tehsil Nahan Distt. Sirmaur H.P. may kindly be passed in favour of ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 17 the plaintiff and against the defendants by way of restraining the defendants causing any sort of interference in any manner .

whatsoever and also restraining them from using the name and Trade mark of the firm M/s Lavender dairy and Milk products in the market and also restraining them from defaming the firm of the plaintiff in the market in any manner whatsoever and causing any damage to the suit property in future, either themselves through their agents, servants and assigns. And or of any other relief to which the plaintiff may be found entitled may also be passed in favour of the plaintiff and against the defendants with costs of the suit."

19. Once, it is held that the suit infact arises out of breach of covenant of the partnership deed which as on date stands dissolved, then as per the ratio of the judgments laid down by the Hon'ble Supreme Court in Ravi Prakash Goel, M/s Magma Leasing and Finance, M/s Reva Electric Car and M/s Sundaram Finance Limited (supra), the suit is not maintainable and is required to be referred to the Arbitrator.

20. Apart from the aforesaid, it needs be observed that even the trial Court had no doubt in its mind regarding the applicability of provisions of the Arbitration Act, but rejected the contention of the petitioners on the ground that no application under Section 8 of the Arbitration Act had been preferred and moreover since there were allegations of fraud and misrepresentation etc., which essentially were complicated questions of law and facts, therefore, it would be Civil Court alone which could adjudicate upon the dispute.

21. Insofar as non filing of the application under Section 8 of the Act is concerned, suffice it to say, that mere mentioning of a wrong provision of law or non mentioning of a provision of law is of no avail as it is the substance and prayer contained in the application which is ::: Downloaded on - 15/04/2017 19:16:52 :::HCHP 18 primarily required to be seen, rather than the provisions of law under which it is alleged to be filed.

22. Now coming to the question of suit being triable only by the Civil Court on account of there being complicated questions of law and facts, it may be noticed that to reach such a conclusion, the trial Court had relied upon the judgment of the Hon'ble Supreme Court in of N.Radhakrishnan versus Maestro Engineers and others (2010) 1 SCC 72. But, then the judgment in N.Radhakrishnan's case (supra) rt has been subsequently considered by the Hon'ble Supreme Court in case of Swiss Timing Limited versus Commonwealth Games 2010 Organising Committee (2014) 6 SCC 677 and held to be not laying down the correct law and was declared to be "per incuriam". The relevant observation of the Hon'ble Supreme Court in this regard reads as under:-

"20. This judgment in P. Anand Gajapathi Raju v. P.V.G. Raju (2000) 4 SCC 539 was not even brought to the notice of the Court in N.Radhakrishnan v. Maestro Engineers (2010) 1 SCC

72. In my opinion, the judgment in N.Radhakrishnan is per incuriam on two grounds: firstly, the judgment in Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums (2003) 6 SCC 503 though referred to has not been distinguished but at the same time is not followed also. The judgment in P. Anand Guajarati Raju6 was not even brought to the notice of this Court. Therefore, the same has neither been followed nor considered. Secondly, the provisions contained in Section 16 of the Arbitration Act, 1996 were also not brought to the notice by this Court. Therefore, in my opinion, the judgment in N.Radhakrishnan2 does not lay down the correct law and cannot be relied upon."

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23. Not only this, the Hon'ble Supreme Court in the case of Swiss Timing Limited (supra) held that the Court can decline to refer .

disputes to arbitration only when the Court reaches the conclusion that the contract is void on a meaningful reading of contract document itself without requirement of any further proof.

24. In view of the aforesaid discussion, the other question of regarding the applicability/non-applicability of the provisions of Section 69 of the Partnership Act, in such circumstances, is only rendered rt academic.

25. Consequently , this petition is allowed and the suit filed by the plaintiff-respondent is held to be not maintainable in view of Clause-

16 contained in the partnership deed dated 29.06.2015. The plaint is ordered to be rejected leaving the parties to approach the Arbitrator to be mutually appointed by the parties in terms of Clause-16. Pending application, if any, also stands disposed of.

November 02, 2015. (Tarlok Singh Chauhan), (krt) Judge.

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Himachal Pradesh High Court