Munish Gupta And Ors. vs Ram Dass And Ors.
2002 Latest Caselaw 1369 Del

JUDGMENT

K.S. Gupta, J.

1. 1. Petitioners filed this petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the 'Act') seeking appointment of arbitrator to adjudicate the disputes referred to in para No. 13 of the petition which respondents 1 & 2 and respondent No. 3 have contested by filing replies.

2. Copy of partnership deed filed Along with petition would show that firm-Shankar Lal Rishi Kumar was constituted on 1st April, 1993 with Ram

Dass, M/s. Ram Dass Sharma & Sons, HUF, Smt. Pushpa Gupta, Smt. Preeti Gupta, Yogendra Sharma and Munish Gupta as partners thereof, to carry business of Shawls at 85, Moti Bazar, Chandni Chowk. Smt. Pushpa Gupta died on 5th December, 1997. Rajiv Gupta, petitioner No. 3 and Pankaj Gupta, respondent No. 4 are the legal heirs of Smt. Pushpa Gupta, deceased. Petitioners 1 & 2 and respondents 1 to 3 are the other partners of said firm. Clause 18 of aforesaid partnership deed provides that all disputes and matters relating to the firm beyond the mutual decision between the parties shall be referred to an arbitration as per the Arbitration Act, 1940. Paras 8 & 9 of the notice dated 9th November, 1998 sent by the petitioners through counsel to respondents 1 to 3 also filed Along with petition (at pages 39 to 42) read as under:-

"8. That since you are not settling the pending accounts and all mutual efforts have failed, I, on behalf of my clients (Smt. Preeti Gupta, Shri Munish Gupta, both partners and Sh. Rajiv Gupta, one of the legal heirs of deceased partner, Smt. Pushpa Gupta) give you this legal notice to render the up todate accounts of the firm and in absence of execution of new partnership firm after the death of Smt. Pushpa Gupta (one

of the partners) vacate the premises and pay the entire share of my clients within 15 days from the date of this notice.

9. Please take further notice that my clients will approach the court of law for the appointment of Arbitrator as per arbitration clause being No. 18 as the mutual efforts have failed and you have not responded and agreed to settle the accounts which are disputed."

3. Main thrust of argument advanced by Sh. R.P. Bansal appearing for respondent No. 3 and Sh. S.K. Tiwari for respondents 1 & 2 was that as Clause 18 of the said partnership deed is silent about the number of arbitrator to be appointed, a sole arbitrator would be appointed. Since said notice dated 9th November, 1998 is not in accordance with the provision of Sub-section (5) of Section 11 of the Act, this petition is not legally maintainable. Section 11(5) which is material, is reproduced below:-

"Failing any agreement referred to in Sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him."

4. Bare reading of above Sub-section (5) would show that before filing petition the party

demanding appointment of arbitrator has to request the other party in writing to concur in the appointment of sole arbitrator out of the names of persons suggested, within 30 days of the receipt of such a request by it. To be only noticed that in para No. 9 reproduced above of the notice, neither the names of persons had been suggested nor respondents 1 to 3 called upon to concur in the appointment of sole arbitrator. Thus, based on such a notice the present petition is not legally maintainable as was rightly contended on behalf of respondents 1 to 3 and petition deserves to be dismissed on that ground alone.

5. For foregoing discussion, the petition is dismissed. Petitioners are at liberty to file such a petition after serving fresh notice under Sub-section (5) of Section 11 on respondents 1 to 3. No order as to costs.