Saturday, 6 April 2019

Whether application for appointment of arbitrator by partner of dissolved partnership firm is maintainable?

 The appellants (defendants) on being served
raised a preliminary objection contending therein
that since the partnership in question on which the
application under Section 20 of the Partnership Act
was founded was an “unregistered partnership",
therefore, in the light of the bar contained under
Section 69 (3) of the Partnership Act, the application

filed by the respondent was not maintainable,
therefore, it was liable to be dismissed as such.
8. The Civil Judge by order dated 18.03.1993
overruled the objection raised by the appellants
(defendants) and held that the application filed by
the respondent (plaintiff) is maintainable. The
appellants (defendants) felt aggrieved and filed writ
petition in the High Court at Allahabad under
Article 227 of the Constitution of India.
9. By impugned order, the High Court dismissed
the writ petition and upheld the order of the Civil
Judge, which has given rise to filing of this appeal
by way of special leave by the defendants in this
Court.
10. So, the short question, which arises for
consideration in this appeal, is whether the High
Court was justified in dismissing the appellants’
writ petition.

11. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow this appeal and while setting
aside the impugned order remand the case to the
High Court for deciding the writ petition afresh on
merits in the light of the observations made infra.
12. In our considered view, the need to remand
the case has occasioned because we find that the
High Court did not decide the issue, which was the
subject matter of the writ petition, keeping in view
the law laid down by this Court in the case of
Krishna Motor Service by its Partners vs. H.B.
Vittala Kamath, 1996 (10) SCC 88.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.3399 OF 2019
(Arising out of S.L.P.(C) No.21469 of 2012)

Bhagwan Das Goel Vs Pyare Kishan Agarwal 

Abhay Manohar Sapre, J.
Dated:April 04, 2019.

1. Leave granted.
2. This appeal is directed against the final
judgment and order dated 14.05.2012 passed by
the High Court of Judicature at Allahabad in Writ
C. No.14839/1993 whereby the High Court

dismissed the writ petition filed by the appellants
herein and upheld the order dated 18.03.1993
passed by the Civil Judge, Jhansi in O.S.
No.140/1992.
3. A few facts need mention hereinbelow for the
disposal of this appeal, which involves a short point.
4. The appellants are the legal representatives of
the original defendants and the respondent herein
is the plaintiff of the suit out of which this appeal
arises.
5. The respondent filed an application under
Section 20 of the Arbitration Act, 1940 (since
repealed) against the appellants’ predecessorsintitle.
The application was founded on the allegations
inter alia that there was a partnership between the
appellants’ predecessorsintitle
with the
respondent on 05.07.1960 by name "Gupta Bus
Service".

6. However, the disputes arose between the
partners of this firm(Gupta Bus Service), which
resulted in its dissolution. It was alleged that
Clause 11 of the Partnership Deed provides for
resolution of disputes arising out of the partnership
between the parties by an Arbitrator. The
respondent, therefore, prayed that an Arbitrator be
appointed in terms of Clause 11 of the Partnership
Deed for deciding the disputes, which have arisen
between the parties relating to the partnership.
7. The appellants (defendants) on being served
raised a preliminary objection contending therein
that since the partnership in question on which the
application under Section 20 of the Partnership Act
was founded was an “unregistered partnership",
therefore, in the light of the bar contained under
Section 69 (3) of the Partnership Act, the application

filed by the respondent was not maintainable,
therefore, it was liable to be dismissed as such.
8. The Civil Judge by order dated 18.03.1993
overruled the objection raised by the appellants
(defendants) and held that the application filed by
the respondent (plaintiff) is maintainable. The
appellants (defendants) felt aggrieved and filed writ
petition in the High Court at Allahabad under
Article 227 of the Constitution of India.
9. By impugned order, the High Court dismissed
the writ petition and upheld the order of the Civil
Judge, which has given rise to filing of this appeal
by way of special leave by the defendants in this
Court.
10. So, the short question, which arises for
consideration in this appeal, is whether the High
Court was justified in dismissing the appellants’
writ petition.

11. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow this appeal and while setting
aside the impugned order remand the case to the
High Court for deciding the writ petition afresh on
merits in the light of the observations made infra.
12. In our considered view, the need to remand
the case has occasioned because we find that the
High Court did not decide the issue, which was the
subject matter of the writ petition, keeping in view
the law laid down by this Court in the case of
Krishna Motor Service by its Partners vs. H.B.
Vittala Kamath, 1996 (10) SCC 88.
13. In our view, the High Court should have
noticed the aforementioned decision and decided
the question accordingly in the light of law laid
down therein. The High Court unfortunately did not
take note of the said decision and has thus
committed an error requiring interference of this
Court.
14. It is for this reason, we are of the considered
view that the matter should be remitted to the High
Court for deciding the writ petition afresh on merits
keeping in view the law laid down by this Court in
the case of Krishna Motor Service (supra).
15. In view of the foregoing discussion, the appeal
succeeds and is accordingly allowed. The impugned
order is set aside. The case is remanded to the High
Court for deciding the writ petition, out of which
this appeal arises, afresh on merits as observed
above.
16. Since we have formed an opinion to remand
the case to the High Court instead of deciding the
issue for the first time in this appeal on facts, we
refrain ourselves from exercising the issue on
merits. The High Court will, therefore, decide the

matter strictly in accordance with law uninfluenced
by any observations made in the impugned order
and this order.
17. Since the matter is quite old, we request the
High Court to dispose of the writ petition as
expeditiously as possible preferably within six
months.
.………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[DINESH MAHESHWARI]
New Delhi;
April 04, 2019

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