Anju Takyar vs H.C. Takyar And Ors.
2005 Latest Caselaw 1391 Del

JUDGMENT

R.C. Jain, J.

Page 1535

1. The above-named petitioner has filed this application under Section 8 read with Section 11 of the Arbitration and Conciliation Act, 1996 (for short the ''Act'') seeking reference of the disputes between the parties to arbitration and for appointment of an Arbitrator. The application has been made with the averments and allegations that a partnership firm by the name and description of M/s Paramount Builders was constituted by following six partners on 28.1.1986:-

(i) Late Sh. S.R. Takyar, grandfather of the petitioner and respondent No. 2 and the father of respondent No. 1 (who died on 28.5.1998)

(ii) Sh. Harish Chander Takyar, respondent No. 1

(v) Smt. Shailja Kochar, respondent No. 4, and

(vi) Anju Takyar, petitioner

Page 1536

2. The petitioner's name appears at Serial No. 6 in the said partnership deed. The partnership deed dated 28.1.1986, inter-alia contains an arbitration agreement in clause (13), which is to the following effect:-

''13. Any dispute or difference, which may arise between the partners or their representatives with regard to the constitution, interpretation and effect of this Deed or any part thereof or with respect to the accounts or profits or losses of the business of the dissolution or winding up of the firm or any other matter relating to the firm shall be referred to Arbitration, consisting of as many Arbitrators as the number of partners, and to be nominated by each partner and it is agreed that in case of difference of opinion, between the Arbitrators when they are equally divided, the decision of any umpire selected by them shall be final and binding on all parties.''

3. It is alleged that the disputes/differences arose between the parties in relation to the said partnership inasmuch as despite various requests, representations and demands made by the petitioner upon other partners, she has not been allowed inspection of the record and accounts of partnership firm. She invoked the arbitration agreement vide a communication dated 8.11.2002 and called upon the respondents to appoint the Arbitrator to settle the disputes/differences between the parties. The respondents having failed to take action, the petitioner filed the present petition.

4. On being noticed, the respondents have opposed the petition and have filed a reply raising preliminary objections about the maintainability of the present proceedings, which are stated to be an attempt to misuse the process of the Court. It is pointed out that the petitioner has not approached the Court with clean hands inasmuch as she has not disclosed the factum of filing of a civil suit No. 627/02 filed by her along with her sister Kumud Takyar, which is now pending in the District Court in which the petitioner, inter-alia, has sought certain declarations and rights in several properties including property No. BH-8, LSC, Shalimar Bagh (Poorvi), New Delhi, which is the subject matter of the arbitration agreement. In view of this position, it is denied that the petitioner is entitled to reference to arbitration or appointment of an Arbitrator for settlement of the alleged disputes.

5. In the rejoinder, the petitioner has controverter the objections and pleas raised by the respondents. It is, however, not disputed that the suit filed by her along with her sister is pending adjudication and in that suit relief was also claimed in respect of property bearing No. BH-8, LSC, Shalimar Bagh (Poorvi), New Delhi, which is the subject matter of partnership deed dated 28.1.1986. It is sought to be explained that after filing of the said suit, the petitioner has moved an application under Order 6 Rule 17 CPC in the District Court praying for amendment of the plaint, more particularly in order to abandon/give up relief relating to the above-said property No. BH-8, LSC, Shalimar Bagh (Poorvi), New Delhi from consideration in the said suit. The said application is being opposed by the respondents primarily on the ground that the petitioner has filed the present petition.

Page 1537

6. I have heard learned counsel for the parties and given careful consideration to the submissions made by counsel for the parties. Ordinarily in a petition under Section 11 of the Act, a Court exercises powers of a delegate of the Chief Justice and those powers are more administrative than judicial having regard to the scope of the provisions of Section 11, as more fully interpreted by the Constitution Bench of the Supreme Court in the case of Konkan Railways Corporation Limited and Anr. v. Rani Construction Pvt. Ltd. . Accordingly, the Court would not dwell on any disputed question(s), which is left to be decided by the Arbitral Tribunal. Mr. Duggal, learned counsel for the respondents has, however, urged that in a recent decision rendered by the Supreme Court in the case of Glencore International AG v. Hindustan Zinc Ltd., 2005(7) SCC 99, regarding the position of powers of a Chief Justice or his designate. It has been held that despite the role of a Chief Justice or his nominee being administrative and not adjudicatory, still does not mean that if Chief Justice is moved, he has to act as a rubber stamp and he could not apply his mind to see whether it was a case for exercise of powers under Section 11 of the Act.

7. Mr. Duggal has then pointed out that the petitioner is not within her rights to approach the Court with the present petition inasmuch as the dispute raised in the present petition and sought to be referred to the Arbitral Tribunal, is also the subject matter of the previously instituted suit filed by the petitioner and her sister and the respondents as defendants have not objected to the maintainability of the said suit on the ground of existence of an arbitration agreement between the parties for settlement of the disputes so far as it relates to property No. BH-8, LSC, Shalimar Bagh (Poorvi), New Delhi and have also not filed any application under Section 8 of the Act. In t is connection, he has heavily relied upon a Supreme court decision in the case of Sukanya Holdings (Pvt.) Limited v. Jayesh H. Pandya, . In that case, the Court examined the scope of Section 8 in particular and having regard to the provisions of Section 5 of the Act, held as under:-

''12. For interpretation of Section 8, Section 5 would have no bearing because it only contemplates that in the matters governed by Part I of the Act, the judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the Arbitral Tribunal, if: (1)the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2)in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3)such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that the Arbitration Act does not oust the jurisdiction of the civil court to decide the dispute in a case where parties to the arbitration Page 1538 agreement do not take appropriate steps is contemplated under sub-sections (1) and (2) of Section 8 of the Act.''

There cannot be any quarrel with the above legal preposition, but still it does not help the respondents in the present case because in the case in hand, the respondents have admittedly not moved any application under Section 8 in the pending suit against them. Merely because the defendants have submitted to the jurisdiction of the Civil court established by State and have not raised any objection about a part of the claim in the suit being liable to be settled through the mode of arbitration, is no ground for not giving effect to the arbitration agreement if one party to the agreement approached the Court for effectuating the arbitration agreement. It is true that the disputes sought to be raised in the present petition were also part of the claims, raised by the petitioner in the civil suit, but the petitioner being properly advised, has decided to abandon that part of the claim in the said suit, which is squarely covered by the arbitration agreement, detailed in the partnership deed dated 28.1.1986. In the opinion of this Court, the petitioner is at liberty and legally entitled to do so and that will not bar filing of the present petition.

8. Yet another reason why the petition is maintainable and must succeed is that Mrs. Shikha Takyar and Mrs. Shailja Kochar, who are the parties to the arbitration agreement and the present petition are not the parties in the civil suit filed by the petitioner along with her sister. On the request of learned counsel for the petitioner and that an application having already been made on behalf of the petitioner, claim of the petitioner so far as it relates to one-sixth share in property No. BH-8, LSC, Shalimar Bagh (Poorvi), New Delhi, shall be deemed to have been abandoned in the suit and would be liable for adjudication through the mechanism of arbitration.

9. In the result, the petition is allowed and the disputes referred to by the petitioner in relation to her one-sixth share in the partnership firm constituted on 28.1.1986 shall be adjudicated upon through arbitration. As the respondents have failed to appoint the Arbitrator despite repeated requests having been made, an independent Arbitrator needs to be appointed for settlement of the disputes/differences between the parties. Accordingly, Mr. B.L. Garg, retired Additional District and Sessions Judge, Delhi is appointed as the sole Arbitrator to settle the disputes/differences arising between the parties in relation to the partnership deed dated 28.1.1986. The parties are directed to appear before the Arbitrator on 22.10.2005 at 11.00 A.M. and file their claims/counter-claims etc. The Arbitrator shall be paid a fee @ Rs.7,500/- per hearing, not exceeding a total sum of Rs.75,000/-, to be born in equal share by all the six partners of the partnership firm.

9. A copy of the order be forwarded to the sole Arbitrator as well as be given dusty to learned counsel for the parties.