Karnataka High Court
Sri S Shivakumar vs M/S Sgh Rural Godown on 12 February, 2025
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 12TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
CIVIL MISC. PETITION NO. 303 OF 2023
BETWEEN:
1 . SRI. S. SHIVAKUMAR
PARTNER
M/S SGH RURAL GODOWN
AGED 53 YEARS
2 . SMT. H. GIRIJA
PARTNER
M/S SGH RURAL GODOWN
AGED 46 YEARS
BOTH ARE RESIDING AT NO.193/4
HARSHA HOSPITAL CAMPUS
NELAMANGALA BYPASS, NH-4
NELAMANGALA
BANGALORE RURAL-562 123.
...PETITIONERS
(BY SRI. UDAYA HOLLA, SENIOR ADVOCATE FOR
SRI. KRISHNA .T, ADVOCATE)
AND:
1. M/S SGH RURAL GODOWN
A REGISTERED PARTNERSHIP FIRM
HAVING ITS REGISTERED OFFICE AT
NO.20/1, GOVENAHALLI, THYMAGONDLU HOBLI
NELAMANGALA TALUK
2
BANGALORE
REPRESENTED BY ITS PARTNER
SRI. G.H. KRISHNAMURTHY
2. SMT SUNANDA
W/O LATE H. SHIVAKUMAR
PARTNER
M/S SGH RURAL GODOWN
R/AT NO.5743
MAHIMARANGASWAY NILAYA
GOVINDAPPA LAYOUT
SUBHASHNAGAR, NELAMANGALA
BANGALORE-562 123.
3. SRI G.H. KRISHNAMURTHY
S/O SRI HANUMAIAH
PARTNER
M/S SGH RURAL GODOWN
R/AT NO.83, GOVENAHALLI
KULUVANAHALLI, NELAMANGALA
BANGALORE-562 111.
ALSO RESIDING AT 3RD CROSS
CHANNAPPA EXTENTION
NEAR NELAMANGALA MES PUBLIC SCHOOL
NELAMANGALA TOWN
BANGALORE RURAL-562 123.
...RESPONDENTS
(BY SRI. TEJASVI .K.V, ADVOCATE FOR R1 TO R3)
THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(5)
OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING
TO APPOINT A SOLE ARBITRATOR NOMINATED BY THE
PETITIONERS, TO ADJUDICATE THE DISPUTES BETWEEN THE
PARTIES, WHICH HAVE ARISEN UNDER THE DEED OF
PARTNERSHIP DATED 10/03/2008, VIDE ANNEXURE-A AND THE
RECONSTITUTION DEED VIDE ANNEXURE-B AS THE
PETITIONERS ARE WILLING TO SUBMIT THEMSELVES FOR
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ARBITRATION. IF THIS HONBLE COURT WERE TO APPOINT ANY
OTHER ARBITRATOR, OTHER THAN ONE NOMINATED BY THE
PETITIONERS, THE PETITIONERS ARE AGREEABLE FOR THE
SAME.
THIS CIVIL MISC. PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 05.02.2025, THIS DAY ORDER WAS
PRONOUNCED THEREIN, AS UNDER:
CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
C.A.V. ORDER
This Civil Miscellaneous Petition is filed under Section
11(5) of the Arbitration and Conciliation Act, 1966 (for
short 'the Act') seeking appointment of sole arbitrator to
resolve the dispute and difference between the parties
under the deed of partnership dated 10.03.2008 evidenced
at Annexure-A and the reconstitution deed evidenced at
Annexure-B.
2. Respondents on receipt of notice have tendered
appearance and have engaged their lawyer and their
statement of objection is filed.
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3. Petitioners in the present petition have alleged
that respondents 2 and 3 have been mismanaging the firm
and they have failed to maintain the accounts of the firm as
required under the partnership deed. Petitioners therefore
issued a notice on 28.4.2023 seeking to render the
accounts and for dissolving the partnership forthwith.
Respondents failed to reply. Therefore, petitioners claim
that they were compelled to issue notice under Section 21
of the Act invoking arbitration clause and suggested the
name of the arbitrator.
4. Respondents have filed objections regarding
maintainability of the present petition on the ground that
present petition under Section 11(5) of the Act is filed
before expiry of statutory period of 30 days as provided
under Section 21 read with 11(5) of Act. It is contended
that the petition under Section 11(5) of the Act is filed
without waiting for mandatory period of 30 days to elapse.
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Therefore, respondents contend that the petition is
premature and is liable to be dismissed.
5. Heard the learned Senior Counsel appearing for
the petitioners and the learned counsel for respondents.
6. Before addressing the maintainability of the
petition, it is pertinent to examine the significance of
30 days period mentioned in Section 11(5) of the Act.
7. Section 11(5) of the Act provides that where
parties have agreed to appoint a sole arbitrator and one
party fails to nominate an arbitrator within 30 days from
the receipt of request to do so, the other party may
approach the Court for appointment of an arbitrator under
Section 11(6) of the Act. The statutory period of 30 days is
provided as an opportunity to the respondents to act upon
the notice and nominate an arbitrator thereby avoiding
judicial intervention.
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8. The object of this provision is to afford
reasonable time to the respondents to comply with the
request for appointment of an arbitrator. However, the
premature filing of the petition under Section 11(6) of the
Act does not result in an absolute bar to its consideration,
as long as the defect is curable and the statutory period has
since expired. In the present case on hand, legal notice
issued by the petitioners invoking Section 21 of the Act is
served on respondent on 4.7.2023. This petition is filed on
31.7.2023. Therefore, the defect that existed on the date
of filing has stood cured since the statutory period of 30
days has since expired. The Supreme Court in catena of
judgments has held that technical objections regarding
premature filing should not be allowed to frustruate the
arbitral process if the substantial requirement of law is
ultimately met.
9. In the present case, though the petition was filed
before completion of 30 days, the defect was obviously
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curable and at this stage, the said defect and the objections
raised by the respondents do not survive for consideration.
Since the petition has remained pending before this Court
since 2013, the 30 days period has elapsed long back and
no appointment is made by respondents. Therefore, the
purpose provided under Section 11(5) of the Act is fully
satisfied and the objections are not tenable.
10. The respondents have acknowledged the
existence of arbitration clause. After thorough review of
the petition, annexures and supporting documents, this
Court is satisfied that the petitioner has met the procedural
requirements outlined under Section 11(4) of the Act.
11. In the light of the aforesaid clause of arbitration
and the contentions advanced by the petitioners and
respondents, this Court proceeds to pass the following:
ORDER
(i) This civil miscellaneous petition is
allowed appointing Shri Justice Subhash B. Adi,
Former Judge, High Court of Karnataka, as the
sole Arbitrator to enter reference of the disputes
between the petitioners and the respondents and
conduct proceeding at the Arbitration and
Conciliation Centre (Domestic and International),
Bengaluru, according to the Rules governing the
said Arbitration Centre;
(ii) All contentions inter se parties are left
open for adjudication in the arbitration
proceedings;
(iii) Office is directed to communicate this
order to the Arbitration and Conciliation Centre
and to Sri. Justice Subhash B. Adi, Former Judge,
High Court of Karnataka, as required under the
Arbitration and Conciliation Centre Rules, 2012;
Sd/-
(SACHIN SHANKAR MAGADUM)
JUDGE
*alb/-
