IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF NOVEMBER 2019 BEFORE THE HON'BLE Mr. JUSTICE B.VEERAPPA CIVIL MISCELLANEOUS PETITION No.299/2018 BETWEEN:
MR.MANISH GAVARIKAR, SON OF GAVARIKAR DATTATRAY KESHAVA RAO, AGED ABOUT 52 YEARS, RESIDING AT No.G-103, PURVA PAVILLION, KEMPAPURA MAIN ROAD, HEBBAL, BENGALURU – 560 024.
... PETITIONER (BY MS. SMITHA R.B., ADVOCATE FOR SRI. SURYANARAYANA T., ADVOCATE) AND:
MR.M.K.THIMMAIAH, SON OF M.M.KALAPPA, AGED ABOUT 60 YEARS, RESIDING AT NO.39, GOPALAPPA LAYOUT, BEHIND SUNRISE SCHOOL, HEBBAL, KEMPAPURA, BENGALURU – 560 024.
…RESPONDENT (BY SRI.H.MUNISWAMY GOWDA, ADVOCATE) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO (A) APPOINT AN ARBITRATOR ON BEHALF OF THE PARTIES IN TERMS OF CLAUSE 15 OF THE PARTNERSHIP DEED DATED 12.02.2014 (ANNEXURE – A) SO AS TO CONSTITUTE THE ARBITRAL TRIBUNAL, TO ADJUDICATE UPON AND DETERMINE THE DISPUTES / DIFFERENCES BETWEEN THE PARTIES ARISING UNDER THE SAID PARTNERSHIP DEED AND ETC.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioner filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint sole Arbitrator to adjudicate the dispute in terms of clause No.15 of the partnership deed dated 12.02.2014 entered into between the parties.
2. It is the case of the petitioner that himself and the respondent were partners of a partnership Firm, namely, M/s. Dartech Hydraulics. The said Firm was engaged inter alia in the business of manufacture, sale and service of hydraulic products, systems and spares.
Prior to entering into partnership, the respondent was the sole proprietor of M/s.Dartech Hydraulics, a proprietary concern which was also engaged in the similar business. However, as the partnership Firm was undergoing loss, the respondent approached the petitioner for assistance. Thereafter, the petitioner entered into partnership at will by virtue of partnership deed dated 12.02.2014 and consequently, the Firm was registered on 24.02.2014 with the Registrar of Firms. The partnership deed was entered into on certain terms and conditions as mutually agreed between the parties. The trade mark of M/s. Dartech Hydraulics, was registered jointly by both the parties in the name of the partnership firm with the Trademark Registry, Chennai. The petitioner contributed to procure business for the Firm and to execute work in that regard extensively due to which the business of the partnership firm flourished and sale figures increased.
3. In the month of May 2017, the respondent unreasonably demanded that the petitioner shall invest a sum of Rs.10,00,000/- into the partnership Firm or to pay the rental for the space where the partnership business was being carried on, to which the petitioner was not agreeable. In June 2017, the respondent demanded the petitioner to retire from the partnership Firm and refused to sign the salary cheque for that month. The petitioner tried to meet the respondent to settle the matter amicably. The respondent expressed his intention to dissolve the partnership Firm. Despite the petitioner calling upon the respondent to dissolve the Firm and settle the accounts, the respondent failed and neglected to come forward to either settle the accounts or wind up the business of the Firm. Therefore, the petitioner had no option except to issue legal notice dated 24.03.2018 invoking the arbitration clause No.15 of the partnership deed by nominating his own nominee as sole arbitrator. The respondent by reply dated 24.04.2018 refused to cooperate for appointment of the Arbitrator. Therefore, the petitioner is before this Court for the relief sought for.
4. The respondent has not filed any objections.
5. I have heard the learned counsel for the parties to the lis.
6. Ms.Smita R.B., learned counsel for the petitioner, reiterating the averments made in the Civil Miscellaneous Petition contended that there is no dispute between the parties with regard to existence of the partnership deed dated 12.02.2014 and in terms of the said deed, both the parties mutually agreed for development of the Firm, but the respondent demanded from the petitioner a sum of Rs.10,00,000/- as an investment into the partnership Firm and subsequently, dispute arose between the parties. Ultimately, though the petitioner expressed his intention to resolve the dispute, the respondent did not come forward for settlement or winding up of the business of the Firm.
Therefore, the petitioner invoked the arbitration clause No.15 of the partnership deed and issued legal notice. The same was untenably replied by the respondent. She submits that it is a fit case to appoint Arbitrator to adjudicate the dispute between the parties by allowing the Civil Miscellaneous Petition.
7. Per contra, Sri H. Muniswamy Gowda, learned counsel for the respondent, contended that the present Civil Miscellaneous Petition is not maintainable and it is the petitioner, who violated the terms and conditions of the partnership deed. Therefore, he sought to dismiss the Civil Miscellaneous Petition.
8. Having heard the learned counsel for the parties, it is an undisputed fact that both the parties entered into partnership deed dated 12.02.2014 and subsequently it was registered on 24.02.2014 under the name and style of M/s. Dartech Hydraulics with the Registrar of Firms. The petitioner issued legal notice dated 24.03.2018 alleging certain violation of the terms and conditions of the agreement by the respondent. The same is disputed by the respondent by issuing reply dated 24.04.2018 and thereby, the dispute arose between the parties. Clause No.15 of the partnership deed dated 12.02.2014, which stipulates to resolve the dispute between the parties by arbitration, reads as under:
“15. That, any dispute that may arise between the Partners or their representatives regarding the interpretation of any of the clauses stated above or any other matter or things concerning the firm or the affairs thereof shall be referred to Arbitrators agreed upon by all the Partners. The Provisions of the Arbitration and Conciliation Act, 1996 shall apply and the decision of such Arbitrators shall be final and binding upon all the partners.”
It is also not in dispute that the petitioner issued legal notice to the respondent as contemplated under the provisions of Section 11(5) of the Act. Therefore, there is no impediment for this Court to appoint sole arbitrator to adjudicate the dispute between the parties.
9. In view of the above, the Civil Miscellaneous Petition is allowed. Sri M. Nagarajan, Former Judicial Member, Central Administrative Tribunal, is appointed as sole arbitrator to adjudicate the dispute in terms of clause No.15 of the partnership deed dated 12.02.2014 entered into between the parties.
10. Registry is directed to send a copy of this order to Sri M. Nagarajan, Former Judicial Member, Central Administrative Tribunal, and Arbitration Centre for reference forthwith.
Sd/- JUDGE sma