Calcutta High Court
Raj Kumar Sharma vs Prasanta Kumar Chandra And Ors. on 5 April, 2007
Equivalent citations: 2007(4)ARBLR37(CAL)
JUDGMENT Arun Kumar Bhattacharya, J.
1. The present revisional application is directed against the order being No. 23 dated 25.07.2006 passed by the learned Judge, 2nd Bench, City Civil Court, Calcutta in Miscellaneous Case No. 169/2006 rejecting the petitioner's application for dismissal of the application under Section 9 of the Arbitration and Conciliation Act, 1996 due to its non-maintainability in view of the embargo imposed by Section 69 of the Partnership Act.
2. The circumstances leading to the above application are that the petitioner and OP Nos. 1 and 2 formed a partnership firm in the name and style of M/s. Akash Ganga Construction by a deed dated 01.10.2003. The said firm is an unregistered one. On the application of OP Nos. 1 and 2 under Section 9 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as 'the said Act', for an injunction restraining the petitioner from making any construction at Premises Nos. 22 and 22/1, Goa Bagan Street, Calcutta -700006 and from disposing of, transferring and/or entering into an agreement with anyone without their consent, the trial court passed an ex parte order of status quo on. 30.01.2006 in respect of the disputed property which was subsequently extended. By an application dated 19.07.2006 the petitioner challenged the maintainability of the said application under Section 9 of the said Act in view of Section 69 of the Indian Partnership Act as the partnership firm is unregistered which was disposed of by the impugned order.
3. Mr. Dey, learned Counsel for the petitioner, contended that since the partnership firm is unregistered, the said application under Section 9 of the said Act falling under the purview of "other proceeding" being barred is not maintainable in view of Sub-section (3) of Section 69 of the Indian Partnership Act. On the other hand, Mr. Chakraborty, learned Counsel for the OPs, relying upon the case of Firm Ashok Traders v. Gurumukh Das Saluja reported in 2004(4) SBR 299 : 2004(1) Arb. LR 141 (SO submitted that the relief sought for in an application under Section 9 of the said Act is neither in a suit nor a right arising from a contract, but a right arising from a partnership deed or conferred by the Partnership Act is being enforced in the arbitral tribunal where the court under Section 9 of the said Act is only formulating interim measure for protection of the right under adjudication, and as such Section 69 of the Partnership Act is not a bar on the right of a party to an arbitration clause to file an application under Section 9 of the said Act.
4. Sub-sections (1) and (2) of Section 69 of the Partnership Act lay down the effect of non-registration and strike at the root of jurisdiction of the court to entertain a suit to enforce a right arising from a contract. Sub-section (3) which also embodies the bar created by Sub-sections (1) and (2) in case of claims of set off or other proceeding to enforce a right arising from a contract provides for certain exceptions to the above general rule contained in Sub-sections (1) and (2) and so also Sub-section (4) providing for further exceptions.
5. An application under Section 9 of the said Act is not a suit, though such application results in initiation of civil proceedings. The right conferred by Section 9 is on a party to an arbitration agreement. The time or the stage for invoking the jurisdiction of court under Section 9 can be (i) before, or (ii) during arbitral proceedings, or (iii) at any time after making of the arbitral award but before it is enforced in accordance with Section 36. The relief sought for in an application under Section 9 is neither in a suit nor a right arising from a contract. The right arising from the partnership deed or conferred by the Partnership Act is being enforced in the arbitral tribunal, the court under Section 9 is only formulating interim measures, so as to protect the right under adjudication before the arbitral tribunal from being frustrated. Section 69 of the Partnership Act has no bearing on the right of a party to an arbitration clause to file an application under Section 9 of the Arbitration and Conciliation Act, 1996 as was held in the case of Firm Ashok Traders.
6. Accordingly, there being no infirmity or illegality with the impugned order, the present application having no merit be dismissed but without any order as to costs.
7. Urgent xerox certified copy of this judgment, if applied for, be supplied to the parties with utmost expedition.