High Court · 2012

Heard Mr. N.N. Jha, the learned Counsel appearing for the petitioner. The respon dent is represented by Mr. S.P. Roy, the learned Counsel. 2. This is an application under Section 11 of the Arbitration & Conciliatio n Act, 1996 (hereinafter referred to as (cid:28)the Arbitration Act (cid:29)) for appointment o f an Arbitrator to adjudicate on the dispute pertaining to the partnership firm M/s ECO Motors of the petitioner and the respondent. Clause 12 of the partnershi p agreement dated 15.2.2009 provides as follows : (cid:28)Clause 12 Arbitration : That all the disputes relating to this partnership between the partners or their representatives if cannot be settled mutually, the same shall be referr ed to arbitration and the entire proceedings thereto shall be governed as per pr ovisions of the ARBITRATION AND CONCILIATION ACT. (cid:29)

3. Mr. N.N. Jha, the learned Counsel submits that the petitioner through he r notice dated 9.7.2010 (Annexure-A-2) addressed to the respondent had demanded appointment of an Arbitrator but as the noticee failed to act within 30 days, Co urt should appoint an Arbitrator. 4. Mr. S.P. Roy, the learned Counsel submits that the notice dated 9.7.2010 (Annexure-A.2) was not sent by the partner (petitioner) herself but by an Advoc ate, purporting to act on behalf of the partner. That apart, this advocate’s not ice was never served on the respondent. Accordingly Mr. Roy submits that conditi on precedent under Section 3 & 11(4)(a) of the Arbitration Act is not satisfied and therefore he contends that the Court lacks jurisdiction to appoint Arbitrato r, by exercise of powers under Section 11(6) of the Arbitration Act. He also ref ers to the FIR filed by the respondent against the petitioner leading to registr ation of the Jalukbari P.S. Case No.693/2010 and the interpolation made in the l ease deeds and other papers of the partnership firm to project the multitude of criminal aspects of the dispute and therefore argues that it is not a suitable c ase, to refer to arbitration. 5. Since the petitioner had not enclosed any Postal proof to show that the advocate’s notice dated 9.7.2010 was actually dispatched, this Court on 17.9.201 0 and on 21.1.2011 directed the petitioner to furnish proof to establish that th e notice demanding arbitration was actually dispatched. The petitioner eventuall y produced Postal Certificate from the Assistant Superintendent of Post Office ( HQ), Guwahati and from this the petitioner asserts that a registered letter book ed on 14.7.2010 was delivered to the addressee on 17.7.2010. But Mr. S.P. Roy p oints out that although postal delivery slip shows the addressee to be P.K. Agar wal (respondent), the letter was not received by the noticee but was received by one Uddhab Deka. The Counsel contends that Uddhab Deka is neither a family memb er nor an employee of the respondent. 6. A reading of the FIR lodged by the respondent against the petitioner and her husband shows that serious allegation of cheating, criminal breach of trust etc. were made and consequently the Jalukbari P.S. Case No. 693/2010 was regist ered under Section 403/406/420/468/120B of the IPC. The order dated 20.9.2011 of the learned Chief Judicial Magistrate (CJM), Guwahati shows that although final report was initially submitted by the police, the case was ordered to be furthe r investigated by the learned CJM. 7. Since allegation was made by the petitioner that the respondent has ceas ed to function w.e.f. 17.5.2010 in the partnership concern i.e. M/S ECO Motors a nd mischievous attempts were made by the petitioner to have the partnership conv erted into a proprietorship concern, a Civil Suit No. 79/2011 was filed by the r espondent against the petitioner (making her defendant No.1), where the plaintif f has asserted his right to the partnership business and claims consequential be nefits. 8. For the Court to acquire jurisdiction to appoint Arbitrator under Secti on 11 of the Arbitration Act, it is necessary to be satisfied that notice deman ding appointment of Arbitrator was duly dispatched and was received by the res pondent or his representative. Only when the noticee fails to appoint Arbitrator within 30 days from the receipt of request to do so from the other party, juri sdiction is conferred on the Court to appoint an Arbitrator. 9. What is significant in the present case is that initially the petitioner had not enclosed any postal certificate along with her Arbitration Petition to establish that the notice was dispatched to the respondent. Only subsequently an d that too because of orders of this Court, the petitioner produced a certificat e from the postal authorities. Thereafter the respondent has filed affidavit ass erting that the notice was never served on the respondent and the person who rec eived the notice i.e. Uddab Deka is an unknown person and is not an employee or a family member of the respondent. Significantly, the petitioner has failed to c ounter this stand of the respondent. Thus the petitioner in my view, couldn’t es tablish that notice was duly served on the respondent. 10. Moreover, this is a case where serious allegation of fraud, manipulation and misappropriation is made against the party who has demanded adjudication of the dispute through arbitration proceeding. But considering the seriousness of the criminal charges alleged against the petitioner by the respondent and the pe ndency of the criminal case against the petitioner and her husband, I feel that this may not be an appropriate case for adjudication by an Arbitrator. Since ser ious allegation of fraud and malpractice are alleged against the petitioner in r espect of the functioning of the partnership firm and a Civil case is pending, a ppreciation of evidence in a normal Court will be a better way of dealing with t he matter. Therefore having regard to the law declared by the Apex Court in Sanj eev Kumar Jain vs. Raghubir Saran Charitable Trust and others reported in 2012 AIR SCW 323, it is held that this is not a suitable case for referring to arbi tration. 11. Before parting with the records, it may be recorded that the respondent has claimed on oath that the petitioner who was the other partner of the partner ship firm M/s ECO Motors hasn’t filed the case and her signature is forged by he r husband in the Vokalatnama and other related papers. But this Court doesn’t w ish to record any opinion on this aspect since it is already held that in the ab sence of the condition precedent for invoking the jurisdiction under Section 11 of the Arbitration Act, the prayer for appointment of Arbitrator can’t be grant ed in the present case. 12. In view of above, the petition is dismissed without any order on cost.