ARBAP/8/2023
2023 Latest Caselaw 1404 UK

      IN THE HIGH COURT OF UTTARAKHAND
                  AT NAINITAL

       THE HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI



           ARBITRATION APPLICATION NO. 08 OF 2023



                            19th MAY, 2023

Between:


Tasleem Ahmad                           ...... Applicant/Petitioner

and

Masaarur Ahmad & others                 ......        Respondents


Counsel for the applicant     :    Mr. Akshay   Pradhan,   learned
                                   counsel

Counsel for the respondent    :    --


The Court made the following:


JUDGMENT:

The applicant Tasleem Ahmad has preferred the

present application under Section 11(6) of the Arbitration

and Conciliation Act to seek the appointment of sole

arbitrator to adjudicate the disputes, which have arisen

between the parties arising out of their partnership deed

dated 19.09.2021.

2) The applicant is one of the five partners in the

said firm, and is described as the party of the "FIRST"

part. The partnership deed records that the partners have

agreed to carry on the business of brick kiln under the

name and style 'M/s Welcome Brick Supply', at Village

Tikola Khurd, Pargana Manglaur Town, Tehsil Roorkee,

District Haridwar. The share of the applicant in the profit

and loss of the firm is 25 per cent. The partnership deed

contains an Arbitration clause in clause 17, which states

that, in the event of any dispute arising out of the

partnership deed, or in relation to the interpretation,

operation and enforcement of this deed, the same should

be referred under the provisions of the Indian Arbitration

Act.

3) Case of the applicant is that, since dispute arose

between the parties, the applicant invoked the Arbitration

Agreement vide notice dated 16.08.2022. The applicant

nominated one Sri A.K. Kacker, HJS (Retired) as the sole

arbitrator to adjudicate the disputes, and sought the

consent of the other partners to appointment of Sri A.K.

Kacker, as the sold arbitrator.

4) The applicant also invoked Section 9 of the

Arbitration and Conciliation Act, to seek interim measure in

relation to the running of the business, and the assets of

the partnership firm.

5) Since the parties could not mutually appoint the

arbitrator, this application has been preferred.

6) On issuance of notice, all the respondents were

served. Only respondent No. 2 appeared through counsel,

and sought to contest this application. The respondent No.

2 has filed his reply / counter-affidavit on record.

However, none has appeared on behalf of respondent No.

2 to advance submissions. In these circumstances, I have

perused the reply filed by respondent No. 2.

7) The stand taken by respondent No. 2 is that the

parties had entered into a compromise deed dated

29.11.2022, and, therefore, the present application is not

maintainable. A copy of the compromise deed, along with

its English translation, has been filed on record by

respondent No. 2. The compromise deed appears to have

been executed by all the five partners. The said

compromise deed records that since disputes have arisen,

the parties do not wish to continue with the business. It

further records that in relation to the GST evasion, the

proceedings are pending before the Assessing Officer,

Roorkee. Under the compromise, it was agreed, that the

goods located at the brick kiln shall be sold, and the GST

dues shall be paid. The extra money from the sale of

bricks will be received by Sher Khan, one of the partners,

i.e., respondent No. 2. It was agreed that none of the

parties will directly or indirectly cause any hindrance in the

sale of the bricks, which were to be sold to one Sri Islam.

8) Learned counsel for the applicant submits that

the said compromise related only to sale of the existing

bricks. However, the disputes between the partners in

relation to the partnership assets, and taking of accounts

remain outstanding, and have not been settled even under

the compromise deed.

9) In the aforesaid light, I am inclined to allow this

application. As to what is the scope of the compromise

deed, and its effect on the inter se rights and obligations of

all the partners, can only be determined in arbitration.

10) Accordingly, I allow this application, and appoint

Mr. Sandeep Kothari, Advocate, to act as the sole

Arbitrator to adjudicate the disputes which have arisen

between the parties.

________________ VIPIN SANGHI, C.J.

Dt: 19th MAY, 2023 Negi