Rajasthan High Court - Jaipur
Shri Ram Babu Sharma S/O Shri Radha Gopal ... vs Shri Shankar Lal Yadav S/O Shri Ram Sahay ... on 29 March, 2019
Author: Alok Sharma
Bench: Alok Sharma
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No.94/2018
Shri Ram Babu Sharma S/o Shri Radha Gopal Sharma, Aged
About 38 Years, R/o Near Bypass, Morija Road, Thana Walidhani,
Village Morija, Tehsil Chomu, District Jaipur, Partner In Firm M/s.
Hanuman Sahay Prahlad Rai Rawat.
----Petitioner
Versus
Shri Shankar Lal Yadav S/o Shri Ram Sahay Yadav, Near
Subhash Circle, Chomu, District Jaipur, Partner in firm
M/s.Hanuman Sahay Prahlad Rai Rawat.
----Respondent
For Petitioner(s) : Mr.Sanjog Kamal Sharma HON'BLE MR. JUSTICE ALOK SHARMA Order 29/03/2019 A partnership deed was executed and signed on 7.4.2016 between the petitioner and the respondent Shanker Lal Yadav to do business in the name and style of M/s. Hanuman Sahai Prahlad Rai Rawat (hereafter 'the firm'). A copy of the partnership deed dated 7.4.2016 has been annexed with the application. Each of the petitioners had 50% share in the partnership firm and were to so contribute the capital. The business interalia of trading and commission agent was to be (Downloaded on 06/06/2021 at 06:17:21 AM) (2 of 8) [ARBAP-94/2018] carried out by the firm from shop No.83, New Anaj Mandi, Chomu District Jaipur. The firm as constituted engaged in trading and acting as a Commission Agent of oil seed, oil cake, foodgrains, edible oil, sugar, vanaspati, ghee, cattle feed, oilseeds etc. The firm continued its business upto 31.3.2017 and balance sheet, trading and profit and loss account were prepared at the end of the said financial year.
The case of the applicant Ram Babu Sharma is that he had a capital of Rs.45,62,057 in the firm as per capital account settled as on 31.3.2017 while the respondent had only a capital of Rs.4,10,333 in his account. As per agreed terms of the partnership deed, the respondent was required to invest 50% capital in the firm but failed to so do despite many requests made by the applicant. This no adherence to the obligation under the partnership deed dated 7.4.2016 was the foundation of the (Downloaded on 06/06/2021 at 06:17:21 AM) (3 of 8) [ARBAP-94/2018] dispute. Further, it is alleged that the respondent also did not cooperate in the running of business of the firm and instead created obstructions and hurdles in its running while also seeking to extract/ siphon money from the business of the firm. This entailed losses for the firm. And further to stall any resolution of simmering problems and resultant disputes the respondent even removed the books of accounts of the firm on 15.11.2017 from the business address of the firm and illegally took away them all in his unauthorized custody. A FIR in regard thereto was also lodged.
It has been submitted that in view of the various disputes in the partnership and the running of the firm, the petitioner invoked Clause 16 of the partnership deed dated 7.4.2016, which provides that :-
"All matters, disputes or differences relating to the partnership shall be referred to arbitrator appointed by the parties as per the provisions of the arbitration Act. The decision (Downloaded on 06/06/2021 at 06:17:21 AM) (4 of 8) [ARBAP-94/2018] of the arbitrator shall be binding up on all the partners."
It has been submitted that resorting to clause 16 above the applicant issued a notice dated 20.7.2018, under the hand of his Advocate Mr.Devidutt Sharma, on the respondent and requested him to confirm in the appointment of Shri. S.C. Mittal, Retired District Judge, Jaipur as an arbitrator such that the disputes under the partnership deed dated 7.4.2016 could be settled in accordance with law. The said notice was delivered to/ served on the respondent. His advocate Shri C.C. Ratnu, addressed a reply thereto on 18.8.2018 admitting that indeed the dispute amongst the parties required to be settled as per the arbitration clause in the partnership deed dated 7.4.2016 but yet did not accede to the appointment of Shri S.C. Mittal as Arbitrator or even suggest appointment of another.
(Downloaded on 06/06/2021 at 06:17:21 AM)(5 of 8) [ARBAP-94/2018] In the background facts detailed above, it has been submitted by counsel for the applicant that disputes relating to the partnership deed dated 7.4.2016 which incorporates as arbitration clause having arisen and the non applicant refusing acceded to the appointment of an Arbitrator for their resolution, despite receipt of notice in regard thereto, this Court in the exercise of its power under Section 11(6) of the Act of 1996 so appoint an Arbitrator to settle all the disputes relating to the partnership deed dated 7.4.2016 between the parties.
None has appeared for the non applicant to oppose the application despite service of notice of this application on 22.1.2019.
Heard Considered.
A partnership deed dated 7.4.2016 was drawn between the applicant and the non applicant. It is on record as Annexure 1.
(Downloaded on 06/06/2021 at 06:17:21 AM)(6 of 8) [ARBAP-94/2018] Clause 16 thereof incorporates an arbitration clause which has been recorded above. Thereunder all disputes and differences arising out of the partnership or relating thereto are to be resolved through an Arbitration under the Act of 1996. The applicant invoking clause 16 of the partnership deed dated 7.4.2016 indeed issued a notice in this regard through his Advocate on 20.7.2018 to the non applicant stating that disputes relating to the agreement dated 7.4.2016 having arisen, he proposed the name of Shri S.C. Mittal, Retd. District Judge, Jaipur as the Arbitrator to resolve the disputes/ differences. Vide reply to the notice dated 18.8.2018, the respondent's Advocate Mr.C.C. Ratnu, admitted to the arbitration clause in the partnership deed dated 7.4.2016 but did not accede to the appointment of Arbitrator as suggested by the applicant or suggest another Arbitrator to enter into reference and adjudicate the disputes in issue.
(Downloaded on 06/06/2021 at 06:17:21 AM)(7 of 8) [ARBAP-94/2018] In the facts of the case, I am of the considered view that this arbitration application deserves to be allowed and an Arbitrator be appointed to adjudicate all the disputes/ differences relating to the partnership agreement dated 7.4.2016 between the applicant and the non applicant who despite service has not appeared in the proceedings before this Court. Consequently, this application is allowed and Shri Askaran Prajapat, Retired District Judge, Jaipur, 73, Nemi Nagar, Near DAV School, Ashram Marg, Vaishali Nagar, Jaipur is appointed as the sole arbitrator for adjudication of the disputes/ differences in accordance with the Act of 1996 between the parties relating to and/ or arising out of the partnership deed dated 7.4.2016. The Arbitrator, shall if warranted make requisite disclosures under Section 11(1) of the Act of 1996. Payment of the cost of the Arbitration proceeding and arbitration fee shall be made as per the Fourth schedule of the Arbitration and Conciliation Act as amended from time to time.
(Downloaded on 06/06/2021 at 06:17:21 AM)(8 of 8) [ARBAP-94/2018] A copy of this order be communicated to Shri Askaran Prajapat, District and Session Judge (Retired) 73, Nemi Nagar, Near DAV School, Ashram Marg, Vaishali Nagar, Jaipur for entering upon the reference and proceed thereon as per the Act of 1996 as amended time to time and adjudicate the disputes/ differences between the parties arising out of/ relating to the partnership deed dated 7.4.2016.
(ALOK SHARMA), J Himanshu/120 (Downloaded on 06/06/2021 at 06:17:21 AM) Powered by TCPDF (www.tcpdf.org)