Mrs. Bibi Haiiar Dashti v. 1. N/r. Syed Ali Asghar Bolooki

Judgment

-J.. THE IION'BLtr SRT JUSTICE T. VINOD KUMN R ARBITRA'IION APPLICATION No. 77 of. 2024 ORDEIT: 'fhe plesent Arbitlation Application is filed rLnder Section l1(5) olthe Arbitration and Conciliation Act, 1996 (h:reinafier'the Act, 1996') for appointment of a sole arbitrator to resolve the disputes bctrveen the pal1ies

IJeard Mr. Mohamr-ned Omcr Farooq, lean-red c,runscl tbr the applicant, Nlr. B. Vanrshidhar Rcddy, learnecl cotrnscl lor tl.rc Respondcnts. Peruscd the Record

3. 'I'he Applicant and the Respondents No. I to 3 ale siblings. Whereas t[.rc RcspondcnL No. 4 & 5 are the legal t eils o1' I-ate Jawalrar Ashtarian rvho is the sistcl of the Appli-:arrt and thc Respondents no. 1 to 3. A reconstitution olPartnership l)ecd dated 0l .10.2020 rvas entered into by the Applicant, ResponJcr.rts No. I to 3 along with [.ate. Jawahar Ashtalian for running .t partncrship finn in the name and style of M/s. Caf6 Bahal and Restaurant.

4. Originalty on the Respondents No. I to 3 hele in issuing a notice ol- dissolution o{'pannership arbitration ploccerlings were 2 -::46.!t!'c initiated. Initially in the said proceedings the Applicant herein along with late Jawahar Ashtarian had filed a counter claim in LA. No. 5 of 2023 opposing the dissolution of the partnership firm Thereafter the Respondents No.1 to 3 had soughl to withdraw the proceedings, whereas Late. Jawahar Ashtarian had fited l. A. No. 6 of 2023 seeking to withdraw her counter-claim. While terminating the proceedings vide order dated22.09.2023, lcamcd arbitrator had adjudicated the counter claim of the Applicant in I.A. No. 5 of 2023 as the only surviving clairn in the arbitration proceedings. The order in I.A. No. 5 ol 2023 is to be treated as a part of the award dated 22.09.2023.It is of consequence to notc the following observations made by the leamed arbitrator Obser-vations in I.A. No. 5 of 2023 dated,22.09.2023: "23. In llrc present set offacts, there ltave been no dissolution or winding up proceedings, the appointntent o.[ lhe receiver cannot be nade. Furtlrcr, the relie.fs cloirns in Para No. 5 B, C, D of counterclaim are beyond tlrc scope of the Arbitral Tribunal, as the Arbitrator is bound by the terms of the contract i.e., Deed of Reconstituted Partnership Deed. No relief could be granted for the want of jttrisdiclion. So far as relief in 5A in lhe cowtlerclaim is concerned, the nature of '1 ' i I I I I i I I I I i I I I I l I I I 3 relie.f olso cunnol be eronted os the arbitrotiott 1.r'o,:eetlings do not survit,a ol lhis point of time. "

11. Observations in the Arbitral Arvard dated 22.09 2(t23: ' 6. The suid LA. No 5 of 2023 came to bt, t t'jtctad an elaborate orrlcr (ANNEXURE - II) which r'esutlctl in tlrc dismissal o.[ tlte counterclaim, mainly on the occo tt! oJ'suclt application be ing not nruintainoble in law. The Tr ibtmal lrus not expressed ony opinion on the dllegations wilh t(spcct to the facts ond no.findings as such haye been recordtr!.

7. Liketyise. re:;pontlenL No.2 seeks adjudicat,ort of her coLtrrlerclu tt. Tfu 7'riltunal recorded a Jinding tltLrt sr.tnte of the relie_/i t:luinrcd in the counterclaim are out ul .t1.tp1,lni pov,ers o./ tlle .1r'bitrul TribwnL. Further, the couttrer.:luim o.[ Ihe natLu'e t,ould ru survive independently when ,lttre is no dissolutiort. I he detailcd reasons are set out in tlu' ilecisiun itt I.A.No. 5 o.f 2023.

8. In other words, the rights o/ the respective pdrti( \ \'hotet,er tlte_t' moy bt, preservt,d tn all the respects morc l.(trticulorb) tlte right.s oI thc respondent No.2 in tht, tr.ltitration proceedittqs u.s tltc otlrcr partners are sailing togetl,cr "

5. It is the contcntion olthe applicant herein that ;rs rgainst the findings on praycr 'B' in I.A. No. 5 of 2023, the altp icrrnls herein had filed a petition under Section 34 of the Act, 1996 in C.O.P.No 87 of 2023. The applicants hereinhave also filed C.O P. No.82 of 4 2023 seeking appointment of receiver and C.O.P. No. 18 of 2024 seeking stay of further construction and expansion being undeftaken by the Respondent No.l & I herein before the Commercial Court, Hyderabad under Section 9 of thc Act, 1996. It is contended that in C.O.P. No. 82 of 2023, the Commercial Court had now appointed the Managing Partner i.e., Lhe Respondent No. I herein as leceiver.

6. It is furlher contended that subsequentll, the applicant herein had issued a notice ofdissolution datcd 07.10.2023 dissolving the partnership firm and calling upon the respondents herein to render the true accounts of the firm & to divide the assets amongst the partners. Pursuant to the notice of dissolution, the applicant l-rere ir-r lrad issued a legal notice datcd 14 .02.2024 invoking the arbitral clause22 of the deed dated 01.20.2020 and nominating the name of Justice A. Gopal Reddy, Former Judge of the High Courr of Andhra Pradesh as an arbitrator to resolve the disputes between the parties. It is contended that the present arbitration application is filed as the respondents herein have failed to reply to their notice dated, 14.02.2024 despite receiving the same on 15.02.2024. i - 5

7. I have taken note oftheir respective contentions

8. The shoft question falling for consideration belore this Court in the present application is whethcr the disputes rrrisr:d by the applicant can be rclcrled to arbitration 9 . A perusal of the record ind icatcs that the App Licant herein had opposed the dissolution proceedings initiated by the Rcspondents No.l to 3 in rhe earlicr round of arbitratior-. Fur.ther, thc applicant at no point oltirne has rvithdrawn her count,lrclaim in i.A. No. 5 of 202i. which led to the same being adjudioar,ed by the Iearned albitrator. At this juncture it is beneficial to lool< into the prayer 'B' in I.A. No. 5 of 2023, for rvhich the applicarrt fLerein had filed an application under Section 34 of the Act, l9!)6 in C.O.p. No.87 of2023. Thc said prayer is as under: " []) Declarotion hc pas.sed in favttu. of the Respotrdents rmd agoinsl tlrc Cluirnotrls that Clauses 20 and 21 are sut,.ep titioush, adrled in the Retonstituted Partnership Deed dated 01. t0.2020 by the Chimants trrul tts snch are not binding on the Responclents. "

10. From a perusal of the pleadings and prayers s,rught for in C.O.P. Ng. 87 of 2023, it appears that the applicant her.eir, does not t intend to Jissolvc rhc parlnership llrrn, rather it is the opposite that 6 il! she desires. It is to be seen that contrary to the aforesaid pleadings the applicant in the present arbitration application seeks dissolution of the partnership firm and rendition of lrue accounts. However, curiously the applicant herein has never exprcssed any intention to withdraw the proceedings in C.O.P. No. 87 of 2023.It is trite law that a party cannot be permitted to take contradictory stands before two different authorities/courts on the sar-nc issue preml t Vs. Naseeb Bee antl Orsl. Therefore, this Courr is of the view that the applicant herein while actively pursuing C.O.p. No. g7 of 2023 wherein she expresses her intention to run the business ol the 1 parlnership firm cannot at the same time be permittcd to also seek reference of the disputes to arbitration lor dissolution of the partnership finn, as both the remedies are so inherently inconsistent that one completely frustrates the other. Fufther, lrorn the aforesaid conduct of the applicant herein in initiating two inconsisrent proceedings on the vely same issue, it is undcrstood that the applicant herein intends to use the procedures of the Court for her '1zozz1 o scc sss 7 convenicnce, thereby causing severe prejudice to the respondents hercin. I l. The Madras High Court in T. Rajeslt Prastd, Partner of M/* R.ILProperties y.s. K.Suji Kumsy',- rlnder similar circurnsl-ances relused to reler lhe disputes to ar.ritt.ation undcr Section I I of the Act, 1996, holding that allowing rhe same would defeat the rights of the respondents. The relevant o:servations are as under "6. Thc exprcssion par-allel Procccdings has becn used in a sensc to dcscribe a set of Proccedings that a litigant is prohibitecl to pursuc simultaneously. Such sct of Procecdings cithcr includes I,roceedings that are identical in cffect or a scl ol l,rocecdings that arc inhcrcntly inconsistent so as a pursuit of one, negatcs the othcr. In the lormer case. the Proceeditrgs rnust be similar in threc aspects a) thr: parties; b) issues inrolvcd and c) the reliel'claimcd. [n cases where I,roceedings arc similar in thesc matcrial a-spccts, it is obvious tllat the resu t of one would rendcr the otlier meaningless. l'herelbrc, permitting parallel proceeclings initiaLed b1,the Ver),same part1, would amount to permitting rneaninglcss litigation. The outcome ola Scction 8 application is paranrount to the initiation ol the albitration. When an alrplication uudel S:ction 8 o[ thc Arbitration and Conciliation Aot 1996 tllcd bv the verv :,ame tltloner is pendin g consideration bv the Clivil Clourt in O.S. No.45 of 2022 and oint ol tir11e. l.[rc verv salnc pctrtloner carulr,t parallel Y filc also orior i an application uncler' Scction I I ol thc Arbitration and C< nciliation Ar:t 1996 seckins for aopointment of an Arbitrator by this Court which would def'cat the ri ntlcnl who has ucstioned the ver existence of the ParLnershio Dced. dated 27.04.2011 whi;h conlains an hts ol' thc r-cs 11 D '? ARB O.P.(Corn.Div) N.678 of 2023 dar ed 27.O.-.ZO23 I *:;: -q-i \-" ' '- - arbitration clause on the qround that it is a labricated documcnt in his suit filed in O.S. No.45 of 2022."

12. In light of the foregoing discussion, the present arbitration (emphasis supplied) application is disrn issed. I 3. Pending miscellaneous petitions if any shall stand closed. No order as to costs. //TRUE COPY// Sd/. B, SATYAVATHI JOINT REGISTRAR SE"K o.r,"=* o, T I'One CC to SRl. MOHAMMED OMER FAROOQ' Advocate [OPUC] 1 . O"" CC to SRl. B. VAMSHIDHAR REDDY, Advocate [OPUC] 2 q Two CD CoPies kul/kamw HIGH COURT DATED:.2810712025 ORDER ARBITRATION APPLICATION No.77 ot 2024 ,1'. I 0 3 Si:P 205 '\.'r '\1 - '\'_.-' , DISMISSING THE ARBITRATION APPLICATION 6rPloa q.- .6-tb2