JUDGMENT
Sanjay Kishan Kaul, J.
1. The petitioners and respondent no.1 are stated to have entered into a partnership deed dated 15.01.1998 containing an arbitration clause. Respondent No. 2 is the wife of respondent no.1. The partnership is stated to have developed property No. G-1/5, Model Town, Delhi and two sale deeds were executed by petitioner No. 1 and respondent No. 1 in favor of respondent No. 2.
2. The petitioners filed a suit for dissolution of respondent No. 3 firm and for rendition of accounts as also for a decree of cancellation of the two sale deeds on the ground that they are tainted with fraud and collusion between respondents No. 1 and 2 and are without consideration. The possession was also sought of the suit property.
3. The respondents filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the said Act’) alleging that in view of the arbitration clause contained in the partnership deed the disputes were liable to be referred to arbitration. The said application was allowed by the impugned order dated 31.03.2004 of Sh. V.K. Jain, Additional district Judge. The petitioners aggrieved by the same have filed the present petition under Article 227 of the Constitution of India.
4. Learned counsel for the petitioners contends that the impugned order is erroneous and bad in law as there is no arbitration agreement between the petitioners and respondent No. 2 It is further contended that learned Additional District Judge did not specify the disputes which were to be referred to arbitration. The petitioners are also aggrieved by certain observations made in Para 7 of the impugned order to the effect that it is not disputed that post dated cheques had not been encashed and the cash amount had been received from respondent No. 2. Learned counsel for the petitioners contends that the petitioners are entitled to seek the relief of cancellation of the two sale deeds.
5. It may be noticed that a sale deed was executed on 18.02.2000 in respect of half portion of flat No. 5 constructed on the property in question and was duly registered. A separate sale deed for the remaining half portion of the flat was executed on 21.02.2000 and again duly registered.
6. The disputes arose between the parties only in the beginning 2002 and the suit was filed in mid 2002. In respect of the first sale deed respondent no.2 handed over a cheque of Rs. 1.85 lacs which was post dated to 18.12.2000 apart from a sum of Rs 3.95 lakhs paid in cash to respondent no.1. Insofar as sale deed dated 21.02.2000 is concerned a cheque for Rs 3.2 lacs was handed over post dated as to 19.12.2000. The grievance made is that respondent no.1 never presented the cheques for payment and the cash amount was also not accounted for by respondent No.1 in the books of the partnership firm. Learned counsel contends that the pleadings filed by the respondents show that it was not even disputed that the cheques were not presented but a defense was taken that the respondent No. 3, the firm, owed a sum of Rs 16.50 lakh to M/s Mahendra Developers Private Ltd, a company managed by respondent no.1 on account of payments made by the said company to the owners at the stage of purchase of the suit property. The petitioner had agreed to adjustment of the two cheques against the amount due by the firm.
7. A reading of the impugned order shows that that the factum of the partnership with respondent no.1 was not disputed . The petitioner had not disputed the receipt of cash and the cheques by respondent No. 1 from respondent No. 2 towards the sale consideration and thus the sale deed could not be said to be executed without consideration. Respondent no.1, if he had failed to deposit the amounts, would be liable to the other partners for accounts. The sale deed had been signed by petitioner no.1 and respondent no.2 had become the owner of the flat in pursuance to registered documents. In respect of some allegations of forgery, the trial court observed that it was for the petitioner no.1 to initiate even criminal proceedings apart from seeking rendition of accounts.
8. The Trial court came to the conclusion that the disputes really related to the matter of partnership business which was covered by arbitration clause 16 of the partnership deed and thus gave opportunity to the petitioners and respondent No. 1 to suggest an arbitrator for adjudicating disputes by the impugned order. However at that stage the petitioners approached this Court.
9. It is trite to say that for exercise of jurisdiction under Article 227 of the Constitution of India this Court does not sit as a court of appeal and the expression ‘patent error’ cannot be given such an expanded meaning as to substitute the view of this Court on a reading of the material by that of the trial court. It is undisputed that there was a partnership deed which contained an arbitration clause. Interestingly it is the petitioners who are disputing the jurisdiction of the arbitrator and not respondent no.2 who is alleged to be an outsider to the arbitration clause. The Trial Court found that real nature of disputes related to the financial disputes between the partners and this was more than apparent from the fact that the suit was filed more than two years after the execution of the sale deed in favor of respondent No. 2. The petitioner No. 1 was a party to the sale deed. The Trial Court thus rightly came to the conclusion that the matter was one of accounts between the partners which was governed by the arbitration clause.
10. The very premise of making the allegation against respondent no.2 was that the sale deeds were without consideration and ought to be cancelled. This allegation could not even withstand the first brush of scrutiny for the reason that simultaneously it was accepted that cash and cheques were received from respondent no.2 towards the sale consideration. Even for the sake of arguments, if it is assumed that there are some allegations against respondent No. 2 of acting in collusion with respondent No. 1 they were not relating to the financial affairs of the partnership firm and respondent no.2 had been willing to go to arbitration in respect of that aspect. The petitioners can hardly be permitted to contend that the matter in such a case ought not to be referred to arbitration.
11. I am unable to accept the plea of learned Counsel for the petitioner that the matter ought not to be referred to arbitration since the petitioners do not have faith in the arbitration process and would like the competent court to decide the dispute. It is not an allegation by the petitioners of lack of faith in any particular arbitrator but a general submission about the remedy through arbitration. The parties had agreed to the settlement of disputes by the mode of arbitration by including the specific clause in the partnership deed and thus cannot be permitted to contend that they are unwilling to go to arbitration.
12. I find no perversity or error apparent on the face of the record so as to call for interference under Article 227 of the Constitution of India. Dismissed.