Raj Pal Manchanda vs Kamal Kishore Manchanda & Ors.
2010 Latest Caselaw 3702 Del

1
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     Date of Decision: 10.08.2010

%                          ARB.P. 344/2009


       RAJ PAL MANCHANDA                                 ..... Petitioner
                      Through:          Mr. Ashish Bhagat, Mr. Abdhesh
                                        Chaudhary, Mr. Nilendu Vatsyayan
                                        & Mr. Dushyant Arora, Advocates

                      versus

       KAMAL KISHORE MANCHANDA & ORS.           ..... Respondents
                      Through: Mr. B. Mohan and Ms. Shashi
                               Saxena, Advocates for respondent
                               No.1
                               Mr. Rajiv Sharma, Advocate for
                               respondent Nos.2 to 5

       CORAM:
       HON'BLE MR. JUSTICE VIPIN SANGHI

       1. Whether the Reporters of local papers may
          be allowed to see the judgment?           :                 No

       2. To be referred to Reporter or not?                :         Yes

       3. Whether the judgment should be reported
          in the Digest?                                    :         Yes

VIPIN SANGHI, J. (Oral)

1. This petition has been preferred under Section 11 of the

Arbitration and Conciliation Act, 1996 (the Act) to seek the

appointment of an arbitrator. The parties, admittedly, entered into a

partnership deed dated 01.02.2008. The said partnership was,

however, unregistered. This partnership deed contains the following

arbitration clause:

"15. Any controversy or claim arising out of or relating to the contract or breach thereof shall be settled by arbitration under the Arbitration Act then in force. The decision given there under shall be binding on all the parties."

2. The petitioner, who is one of the partners and the father of

respondent No.1 and also related to the other respondents, submits

that the partnership firm has been working under the name and style

of M/s The Punjab Steel Works., which is engaged in the business of

manufacturing, forging and sale of iron and steel goods. The share of

the various partners in the profits and losses of the firm have been

clearly set out in the partnership deed. It is stated that the accounts of

the partnership firm were being maintained with Bank of India, but in

the year 2006 one more account with ICICI Bank, Rajouri Garden, New

Delhi, was opened in the name of the firm. The petitioner states that

earlier he was primarily looking after the day-to-day affairs of the firm,

but with age catching up, he could not undertake the day-to-day

decision making for running of the business of the firm, and the

responsibility of running the firm was shouldered by his son Kamal

Kishore Manchanda, i.e. respondent No.1. Presently, it is the

respondent No.1, who is looking after the business of the firm.

3. The grievance of the petitioner is that respondent No.1 is

mismanaging the affairs of the firm. He has opened another bank

account with the name of the firm. Incomes of the firm are being

diverted to the said account opened by, and being operated by

respondent No.1 alone. Due to the alleged aforesaid conduct of

respondent No.1, disputes have arisen between the parties. In this

background, the petitioner seeks appointment of an arbitrator as, it is

contended, despite the notice dated 28.07.2009 invoking the

arbitration agreement, the parties have not been able to agree on any

person to act as an arbitrator.

4. Upon notice being issued, the respondents put in appearance

and filed their reply. The petition is contested by respondent No.1

alone. Learned counsel for the other respondents Mr. Rajeev Sharma

submits that the dispute is primarily between the petitioner and

respondent No.1 i.e. the father and son and they do not have much

concern with the said dispute.

5. Since there is no denial that the partnership deed was

executed between the parties, the existence of the arbitration

agreement is not really in dispute. The existence of the disputes in

relation to and arising out of the partnership deed between petitioner

and respondent No.1, in the light of the allegations made in the

petition and the reply filed thereto, also cannot be doubted. I,

therefore, proceed to record the objections of respondent no.1, before I

record the submissions of the petitioner.

6. Respondent No.1 has raised two submissions to oppose the

appointment of the arbitrator by the Court. The first submission of Mr.

B. Mohan, learned counsel for respondent no.1 is that the partnership

firm, being an unregistered firm, the present petition is not

maintainable to seek the dissolution of the firm in the light of the

provision contained in Section 69 of the Partnership Act. In this regard,

he places strong reliance on the decisions of the Supreme Court in

Krishna Motor Service by its partners v. H.B. Vittala Kamath

(1996) 10 SCC 88. The second submission is that the petitioner has

made serious allegations of fraud, misappropriation and even alleged

criminal conduct on the part of the respondent No.1. Such allegations

of fraud or other criminal conduct cannot be adjudicated upon in

arbitration proceedings since they involve a serious threat to the

reputation of respondent No.1. He submits that respondent No.1

insists that such allegations should be examined only in an open Court.

In support of the second submission, Mr. Mohan has placed reliance on

N. Radhakrishnan v. Maestro Engineers & Ors. 2009 IX AD (S.C.)

138.

7. The submission of Mr. B. Mohan in relation to the bar under

Section 69 of the Partnership Act is that sub-section(1) of Section 69 of

the Partnership Act contains a clear bar to the filing of a suit by a

partner of an un-registered firm to enforce a right arising from a

contract or conferred by the Partnership Act against the firm or

against any other partner of the firm. He submits that even under

Section 69(3), which, inter alia, states that the provisions of sub-

sections (1) & (2) "shall not affect ------- the enforcement of any right to

sue for the dissolution of a firm or for accounts of a dissolved firm, or

any right or power to realize the property of a dissolved firm", would

not permit the petitioner to institute this petition, as the petitioner is

not entitled to seek the dissolution of the firm in the light of the terms

of the partnership deed. In support of this submission, he places

reliance on the decision of this Court in Suresh Kumar Sanghi v.

Amrit Kumar Sanghi, AIR 1982 Delhi 131.

8. In response to the aforesaid submission of Mr. Mohan, Mr.

Ashish Bhagat places reliance on the plain reading of the exceptions

carved out in section 69(3)(a) of the Partnership Act, and on section 16

of the Act to submit that the arbitral tribunal is entitled to rule on its

own jurisdiction. He submits that the issue whether the partnership is

at will, i.e. whether it can be dissolved by the petitioner, or not can

only be determined by an arbitral tribunal as that is an issue relating to

the interpretation of the partnership deed. He relies on clause 4 of the

partnership deed, which inter alia, states that the partnership shall be

at will.

9. In my view, the aforesaid objection raised by Mr. Mohan has

no merit in the light of the provisions contained in the Act and the

Partnership Act. In Krishna Motor Service (supra), four partners,

who were parties before the Supreme Court, issued a notice dissolving

the partnership firm. The respondent accepted the dissolution of the

partnership firm. Subsequently, he filed an application under section

20 of the Arbitration Act, 1940 to seek reference of disputes to the

arbitrator in terms of the agreement. Some claims of the respondent

were referred to arbitration by the Civil Judge. The High Court added

two more items to the reference. The appellants approached the

Supreme Court. The contention of the appellants was that as the

partnership firm was not registered, the respondent was not entitled to

seek reference under section 20 of the Arbitration Act, 1940 to

arbitration.

10. The aforesaid submission of the appellant was rejected by

the Supreme Court. A perusal of the judgment shows that the

Supreme Court relied on its earlier decision in Smt. Prem Lata & Anr.

v. M/s. Ishar Dass Chamanlal, (1995) 2 SCC 145. The discussion in

Prem Lata (supra), I find is more useful for the present case than even

the discussion in Krishna Motor Service (supra).

11. In Prem Lata (supra), the appellant was the widow of the

deceased partner Chamanlal. The widow called upon the respondent

to render accounts of the firm. Since this was not done, she invoked

clause 16 of the partnership deed which contained the arbitration

agreement to resolve the dispute. The respondent did not agree to

refer the dispute to arbitration. The appellant then invoked the

jurisdiction of the Civil Court under section 20 of the Arbitration Act,

1940.

12. The respondent resisted the suit on the ground that the

partnership firm was not registered and consequently, by operation of

section 69 of the Partnership Act, the application under section 20 of

the Arbitration Act, 1940 would not lie. The objection of the

respondent was rejected by the trial court, but accepted by the High

Court, to hold that sub-Section (1) of Section 69 and main part of sub-

Section (3) of Section 69 exclude application of Section 20 of the

Arbitration Act and consequently the suit is not maintainable.

13. The contention of the appellant before the Supreme Court

was that the appellant was only seeking to enforce the rights of the

parties arising from dissolution of the firm for rendition of the accounts

of the dissolved firm and to take the property or rights therein as per

the terms of the contract, to which the deceased partner was entitled.

Instead of filing a suit, the appellant had invoked the arbitration clause

for reference to resolve the dispute by alternative dispute resolution

forum agreed by the parties. It was argued that sub section (3)(a) of

section 69 of the Partnership Act carved out an exception to the main

part of sub section (1) and (2) of section 69 and therefore, there was

no prohibition for the appellant to invoke clause 16 of the partnership

deed. It was thus contended that the suit filed under section 20 of the

Arbitration Act, 1940 is maintainable.

14. On the other hand, the submission of the respondent was

that since the partnership firm was an unregistered one, the rights

arising under the contract, namely, to seek reference to arbitration

under clause 16 of the contract, itself is a right to sue under the

contract and that therefore, the suit under Section 20 of the Arbitration

Act, 1940 is not maintainable.

15. The question considered by the Supreme Court was "whether

the suit filed under section 20 of the Act is maintainable to work out

the rights given to the parties under clause (a) to sub section (3) of

section 69 of the Partnership Act?". The Supreme Court, while

answering the aforesaid issue, held as follows:

"Sub-section (3)(a) carves out three exceptions to Subsections (1) and (2) of Section 69 and also to the main part of Sub-section (3) of Section 69, namely, (1) the enforcement of any right to sue for the dissolution of firm; (2) for accounts of the dissolved firm; and (3) any right or power to realise the property of the dissolved firm. Having excluded from the embargo created by the main part of Sub- section (3) of Sub-sections (1) and (2) of Section 69, the right to sue would not again to be construed to engulf the exceptions carved out by Sub-section (3) or Sub-section (4) of Section 69 of the Act. Any construction otherwise would render the exceptions, legislature advisedly has carved out in Sub- sections (3) and (4) of Section 69, otiose. The object appears to be that the partnership having been dissolved or has come to a terminus, the rights of the parties are to be worked out in terms of the contract of the partnership entered by and between the partners and the rights engrafted therein. The

exceptions carved out by Sub-section (3) are to enforce those rights including the rights to dissolution of the partnership despite the fact that the partnership firm was an unregistered one. Having kept that object in view, we are of the considered opinion that the alternative resolution forum agreed by the parties, namely, reference to a private arbitration is a mode of enforcing the rights given under Clause (a) of Sub-section (3) of Section 69 of the Act and gets excluded from the main part of Sub-section (3) and Sub-

sections (1) and (2) of Section 69. The enforcement of the right to sue for dissolution includes a right for reference to an arbitration in terms of the agreement of the partnership by and between the parties. Therefore, there is no embargo for filing a suit under Section 20 of the Act." (emphasis supplied)

The aforesaid judgment has been followed in Prabhu

Shankar Jaiswal v. Sheo Narain Jaiswal & Ors. (1996) 11 SCC 225.

16. I may refer to the decision of the Supreme Court in Firm

Ashok Traders & Anr. v. Gurmukh Das Saluja & Ors. AIR 2004 SC

1433. In this case the Supreme Court has held that, prima facie, the

bar enacted by Section 69 of the Indian Partnership Act, does not

affect the maintainability of application of Section 9 of the Act as the

right conferred under Section 9 of the Act cannot be said to be one

arising out of the contract. The Supreme Court held that under the

scheme of the Act an arbitration clause is separable from other clauses

of the partnership deed. The arbitration clause constitutes an

agreement by itself.

17. Now, if proceedings under section 9 of the Act are

maintainable and not hit by section 69 (1) or main part of section 69(3)

of the Partnership Act, it follows that the arbitration agreement itself is

enforceable at the behest of one or more of the partners of the

unregistered partnership firm. This is so, because, if the right to seek

arbitration itself cannot be enforced by one or more partners of an

unregistered firm, section 9 too cannot be invoked. There has to be a

valid and enforceable arbitration agreement in existence to invoke

section 9 of the Act. If the party moving the Court for interim

measures of protection under section 9 of the Act is not entitled to

invoke the arbitration agreement, there would be no question of a

petition under section 9 of the Act being maintainable at his behest.

18. This is evident from a plain reading of the opening words of

section 9 of the Act, which provide that "before or during arbitral

proceedings or at any time after the making of the arbitral award", a

party may apply to the Court to seek interim measures. A "party"

means party to an arbitration agreement. An arbitration agreement

can only mean an agreement which is enforceable at law. An

arbitration agreement which is not enforceable cannot possibly result

in arbitral proceedings and therefore, the question of a party seeking

interim measures from Court before or during arbitral proceedings or

after the making of the award would not arise.

19. I may also refer to the judgment of the Supreme Court in V.

Subramaniam v. Rajesh Raghuvandra Rao (2009) 5 SCC 608. In

this case the Maharashtra Amendment Act 29 of 1984, whereby

Section 69(2-A) was inserted and Section 69(3)(a) was substituted in

Section 69 of the Partnership Act, was challenged as being

unconstitutional. By the said amendment, which came into effect on

01.01.1985, a partner in an unregistered partnership firm in the State

of Maharashtra could not file a suit for dissolution or for account of a

dissolved firm or realized properties of a dissolved firm, unless the

duration of the firm was only 6 months or its capital was upto

Rs.2,000/-. The Supreme Court quashed the said State Amendment by

holding that the effect of the State Amendment was to put stringent

disabilities on a firm which are of crippling nature. Paragraphs 23 to

25 of the said decision are instructive and read as follows:

"23. The primary object of registration of a firm is protection of third parties who were subjected to hardship and difficulties in the matter of proving as to who were the partners. Under the earlier law, a third party obtaining a decree was often put to expenses and delay in proving that a particular person was a partner of that firm. The registration of a firm provides protection to the third parties against false denials of partnership and the evasion of liability. Once a firm is registered under the Act the statements recorded in the Register regarding the constitution of the firm are conclusive proof of the fact contained therein as against the partner. A partner whose name appears on the Register cannot deny that he is a partner except under the circumstances provided. Even then registration of a partnership firm is not made compulsory under the Act. A partnership firm can come into

existence and function without being registered.

24. However, the Maharashtra Amendment effects such stringent disabilities on a firm as in our opinion are crippling in nature. It lays down that an unregistered firm cannot enforce its claims against third parties. Similarly, a partner who is not registered is unable to enforce his claims against third parties or against his fellow partners. An exception to this disability was a suit for dissolution of a firm or a suit for accounts of a dissolved firm or a suit for recovery of property of a dissolved firm. Thus a partnership firm can come into existence, function as long as there is no problem, and disappear from existence without being registered. This is changed by the 1984 Amendment extending the bar of the proceedings to a suit for dissolution or recovery of property as well.

25. The effect of the Amendment is that a partnership firm is allowed to come into existence and function without registration but it cannot go out of existence (with certain exceptions). This can result into a situation where in case of disputes amongst the partners the relationship of partnership cannot be put an end to by approaching a court of law. A dishonest partner, if in control of the business, or if simply stronger, can successfully deprive the other partner of his dues from the partnership. It could result in extreme hardship and injustice. Might would be right. An aggrieved partner is left without any remedy whatsoever. He can neither file a suit to compel the mischievous partner to cooperate for registration, as such a suit is not maintainable, nor can he resort to arbitration if any, because the arbitration proceedings would be hit by Section 69(1) of the Act [Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd. AIR 1964 SC 1882]."

20. In the present case, the allegation of the petitioner father of

respondent No.1 is that respondent No.1 has taken complete control of

the partnership firm and ousted the petitioner from not only the

management of the firm, but also from sharing the profits of the firm.

The denial of the right of the petitioner to sue for dissolution of the firm

or for other reliefs permissible by resort to the exceptions carved out in

clause 3(a) of Section 69 of the Partnership Act by resort to the

arbitration mechanism, which was agreed to by the parties, would

leave the petitioner high and dry. That was not the purpose of creating

a bar against the right of the partner of an unregistered firm to initiate

an action against the firm or the other partners to enforce the right

arising from the contract or partnership or conferred by the Partnership

Act.

21. I am, therefore, of the view that the enforcement of any right

to sue for dissolution of an unregistered firm is saved by the exception

carved out in sub section (3)(a) of section 69 of the Partnership Act

and that right cannot be curtailed by resort to section 69(1) or the

main part of section 69(3). As already held by the Supreme Court, the

invocation of the arbitration agreement contained in the unregistered

partnership deed to sue for the dissolution of the firm is permissible, as

arbitration is merely an alternative resolution forum agreed by the

parties to enforce the right to issue for dissolution, which is saved by

clause (a) sub section (3) of section 69 of the Act.

22. I may also note that the decision in Krishna Motor Service

(supra) pertained to the Arbitration Act, 1940 (the old Act). The old Act

did not contain a provision similar to Section 16 of the Act which

empowers the arbitral tribunal to rule its own jurisdiction, including the

ruling of any objection with respect to the existence or validity of the

arbitration agreement. It is well settled that decisions rendered by the

Courts founded upon provisions of the Arbitration Act, 1940 cannot be

applied to cases arising out of the Act, as the Schemes of the two

enactments are in various respects different. Reference may be made

to Firm Ashok Traders & Anr. (supra).

23. I may also note that the Supreme Court in Krishna Motor

Service (supra) was concerned with the rights of the respondent to

seek reference of disputes/claims in respect of a partnership firm

which had been dissolved by consent of parties. The issue as to

whether the partner of an unregistered firm had the right to seek "the

enforcement of any right to sue for the dissolution of a firm" had not

been squarely considered by the Supreme Court. This issue had been

squarely considered and answered, inter alia, in Prem Lata (supra)

which was even applied by the Supreme Court in Krishna Motor

Service (supra).

24. The contention of respondent No.1 that the petitioner does

not have the right to seek the dissolution of the partnership firm on an

interpretation of the terms of the partnership deed is a contention

which can appropriately be raised before the arbitral tribunal and

would have to be answered by the tribunal, even if that issue impinges

on the jurisdiction of the tribunal. The raising of such an objection by

the respondent would not come in the way of the Court appointing an

arbitrator in terms of the arbitration agreement contained in the

partnership deed. In this regard, I may also refer to the decision of the

Supreme Court in National Insurance Co. Ltd. v. Boghara Polyfab

Pvt. Ltd. (2009) 1 SCC 267.

25. I, therefore, reject the first objection raised by Mr. Mohan with

regard to the maintainability of this petition on the ground that the

partnership deed is unregistered.

26. In support of his second submission that the disputes

between the parties cannot be referred to arbitration, since the

petitioner has raised serious allegations of fraud and mis-feasence and

even alleged criminal conduct on the part of the respondent No.1, also

does not appear to have any merit. Mr. Mohan has placed reliance on

the decision of the Supreme Court in N. Radhakrishnan (supra). In

this case, there were serious allegations against the respondent

alleging that he had committed malpractice in the accounts books and

manipulated the finances of the partnership firm. A suit for

declaration had been filed by the respondent to declare that the

appellant was not a partner of the partnership firm and to prevent him

from causing any disturbance in the running of the firm. The appellant

preferred an application under Section 8 of the Act, which was

dismissed by the Court. The Supreme Court held that in the facts

before it, it did not warrant the matter to be tried and decided by the

arbitrator. It was held that the civil Court can refuse to refer the

matter to arbitration if complicated question of fact or law are involved

or where allegations of fraud are made. Where issues involved in the

case required detailed investigation into the same and production of

elaborate evidence to prove the allegations or refute the same, the

disputes could not be referred to arbitration.

27. In response to the second objection of Mr. Mohan, Mr. Bhagat

has made twofold submissions. Firstly, he submits that it is not that in

every case involving allegations of fraud or siphoning of funds, that the

matters would not be referred to arbitration. Mr. Bhagat has placed

reliance on two decisions, firstly, of the Calcutta High Court and the

other of Karnataka high Court, both of which have explained the

aforesaid decision of the Supreme Court in N. Radhakrishnan

(supra). The Calcutta High Court in its decision in Ram kishan

Mimani & Anr. v. Goverdhan Das Mimani & Ors. in A.P.

No.126/2010 decided on 07.04.2010 dealt with similar allegations of

siphoning of funds of the partnership firm to the near relatives of one

of the partners. The Calcutta High Court relied on the earlier decision

of the Supreme Court in Abdul Kadir Samsuddin Bubere v.

Madhav Prabhakar Oak AIR 1962 SC 406, wherein it had been held

that where the allegations were not of serious nature it would not

warrant the refusal of a reference to arbitration. The Supreme Court

observed:

".........even though questions relating to accounts which might involve misconduct amounting even to dishonesty on the part of some partner might arise in the arbitration proceedings and even cases where moral dishonesty or moral misconduct is attributed to one party or the other might be referred to arbitration. It seems to us that every allegation tending to suggest or imply moral dishonesty or moral misconduct in the matter of keeping accounts would not amount to such serious allegation of fraud as would impel a Court to refuse to order the arbitration agreement to be filed and refuse to make a reference."

28. The Calcutta High Court also points out that the case of

Haryana Telecom Limited v. Sterlite Industries (I) Ltd. (1999) 5

SCC 688, relied upon by the Supreme Court in N. Radhakrishnan

(supra), was a creditors petition for winding up of a company under

Sections 433, 434 & 439 of the Companies Act, 1956. The said relief

could obviously not have been granted by an arbitral tribunal. It is in

this light of the matter that the reference of the disputes to arbitrator

was refused under Section 8 of the Act. The Calcutta High Court has

taken the view that even in cases involving allegations of fraud and

malpractice, it is only in exceptional cases that the matter would be

retained by the Court and not sent to arbitration on the ground that "it

cannot be properly dealt with by the arbitrator" ( as observed in N.

Radhakrishnan (supra). The Calcutta High Court further held as

follows:

"Though there is a charge of malpractice and though there is a charge of the respondents having siphoned off funds, it does not appear that such charges are such that the arbitrator or the arbitral tribunal would not be able to address the same. The extent of oral or documentary evidence that would be necessary to deal with likely issues in the reference is not such that warrant the exercise of the extraordinary discretion which has now been recognised, to negate the mandate of the 1996 Act in the present case.

In any event, Section 27 of the 1996 Act permits an arbitrator or arbitral tribunal to seek the assistance of the Court in the event the arbitrator or arbitral tribunal is faced with any problem relating to evidence being received.

It is also to be noticed that the nature of the allegations made herein is not unusual going by the disputes that arise in partnership firms. As has been noticed in Abdul Kadir , it would only be a serious allegation of fraud that would impel the Court to refuse a party seeking reference to go to arbitration. The N. Radhakrishnan judgment cannot be read to imply that upon every allegation of fraud or malpractice being made there can no longer be any adjudication of such matters in an arbitration reference. N. Radhakrishnan has to be read to imply that an exception may be made to the general rule when it appears to Court that a matter involving serious charges with heavy documentary and oral evidence may not be referred to arbitration notwithstanding the disputes being covered thereby."

29. Mr. Bhagat secondly submits that the petitioner undertakes

to the Court that no personal allegations of fraud, mis-feasence or

which involve moral turpitude or criminality would be raised by the

petitioner before the arbitral tribunal. This, however, does not mean

that the petitioner would not make allegations of wrong doings by

respondent No.1 in the arbitration proceedings in relation to the

accounts and business of the partnership firm. The Karntaka High

Court in Future Metal Private Limited represented by its

Chairman Mr. Naveen Sriram v. STCL Limited in review petition

No.8/2010 in C.M.P. Nos.41 & 41 of 2009 decided on 08.04.2010 has

taken a similar view. In this case, the party alleging fraud had

undertaken to the Court that in the arbitral proceedings no allegations

of fraud or serious malpractice would be raised and that such

allegations would stand withdrawn.

30. I find myself in complete agreement with the view taken by

the Calcutta High Court, and the course adopted by the Karnataka High

Court.

31. In the light of the aforesaid submissions, I am of the view that

there is no impediment in referring the disputes between the parties to

arbitration in terms of the arbitration agreement contained in the

partnership deed as set out hereinabove. It shall be open to the

parties to raise their objections, including with regard to the jurisdiction

of the arbitral tribunal, and it shall be for the tribunal to deal with all

such questions. The petitioner, however, shall not raise personal

allegation of fraud, misfeasance or which involve moral turpitude or

criminality against respondent No.1 before arbitral tribunal. This

would, however, not preclude the petitioner from making allegation of

wrongdoings by respondent No.1 in relation to his conduct and

management of the business of the partnership firm before the arbitral

tribunal. Accordingly, this petition is allowed.

32. At this stage, I have put it to the parties that they may

consider holding the arbitration under the rules of Delhi High Court

Arbitration Centre. This is agreeable to the petitioner. However,

learned counsel for the respondent No.1 submits that he would like to

reserve his rights to challenge the present order in appeal. He submits

that eventually, if the matter has to go to arbitration, he would agree

to arbitration being conducted by Delhi High Court Arbitration Centre

under its rules.

33. It has been made clear to Mr. Mohan that the mere giving of

his consent, at this stage, to the conduct of the arbitration under the

Rules of Delhi High Court Arbitration Centre would not come in his way

to challenge the present order in appeal. In these circumstances, Mr.

Mohan has agreed to give his consent while retaining his right to

appeal against the present order. Mr. Rajiv Sharma, who appears for

the other respondents, is also agreeable that the arbitration be

conducted under the Rules of the Delhi High Court Arbitration Centre.

34. Accordingly, I appoint Mr. Dinesh Dayal, retired Additional

District Judge, as the sole arbitrator to adjudicate upon the disputes

between the parties, to be conducted under the Rules of the Delhi high

court Arbitration Centre.

35. A copy of this order be communicated to the learned

arbitrator as well as to the Delhi High Court Arbitration Centre.

36. Petition stands disposed of.

VIPIN SANGHI, J.

AUGUST 10, 2010 rsk