JUDGMENT
S.B. Deshmukh, J.
1. The petitioner seeks reference of the dispute to the Arbitrator for settling it. This petition is filed by the petitioner under Section 11(5) and (6) of Arbitration and Conciliation Act, 1996 (Act of 1996).
Respondents, after entering into appearance have filed counter and denied the claim of the petitioner.
2. Learned Counsel for petitioner, Shri Patni, in support of his submissions, relied upon various judicial pronouncements. I will refer these pronouncements at the appropriate stage. Shri Challani, learned Counsel for respondents submits that alternate remedy is available to the petitioner for recovery of the alleged amount of Rs. 15,00,000/-. According to him, the petitioner was working with respondents as a servant. He has invited my attention to the notice issued on behalf of petitioner referring 90 per cent partnership in the business. He has also invited my attention to partnership deed, wherein, partnership in favour of the petitioner is referred as 40 per cent. According to him, the petition is devoid of substance and be rejected.
3. Section 11 of the Act of 1996 reads as under:
11. Appointment of arbitrators. – (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to Sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in Sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
(4) If the appointment procedure in Sub-section (3) applies and-
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment,
the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
(5) Failing any agreement referred to in Sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.
(6) Where, under an appointment procedure agreed upon by the parties,-
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.
(7) A decision on a matter entrusted by Sub-section (4) or Sub-section (5) or Sub-section (6) to the Chief Justice or the person or institution designated by him is final.
(8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to-
(a) any qualifications required of the arbitrator by the agreement of the parties; and
(b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an internal commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.
(10) The Chief Justice may make such scheme as he may deem appropriate for dealing with matters entrusted by Sub-section (4) or Sub-section (5) or Sub-section (6) to him.
(11) Where more than one request has been made under Sub-section (4) or Sub-section (5) or Sub-section (6) to the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.
(12) (a) Where the matters referred to in Sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the “Chief Justice of India”.
(b) Where the matters referred to in Sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in Clause (e) of Sub-section (1) of Section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court.
Sub-section (2) gives liberty to the parties to agree on a procedure for appointing the arbitrator or arbitrators. However, this sub-section is subject to the provisions laid down under Sub-section (6). Sub-section (6) provides for appointment procedure agreed upon by the parties. Sub-clause (a) provides for a party fails to act as required under that procedure, Sub-clause (b) provides that the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or Sub-clause (c) provides that a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment of the arbitrator.
4. The petitioner has produced on record, copy of the partnership agreement. This deed of partnership, undisputedly is un-registered document. It seems that it is on a stamp paper of Rs. 500/-, seems to have been entered into by and between the parties on 24-10-2005. Respondent No. 1 is partner No. 1 and petitioner is shown as partner No. 4. The name of the partnership firm, other terms and conditions etc. are embodied in the deed. Profit and loss has been mentioned in paragraph No. 6 of the said deed. It is to be noted that petitioner’s share in the profit and loss is shown to the tune of 40 per cent. This deed does not refer to any investment made by the petitioner on the date of execution of this deed. Clause (14) of the deed refers to the arbitration. It is provided therein that in case of difference of opinion in between the partners, four partners shall appoint the arbitrator and decision of arbitrator shall be binding on all partners.
5. The petitioner alleges that he has paid Rs. 15,00,000/- to respondents on account of this partnership. According to the petitioner, it was also agreed by respondents that on receipt of amount of Rs. 15,00,000/-, respondent No. 1 will initiate a proceeding before the Excise Department for inclusion of the name of the petitioner in the license, since the same stands in the name of respondent No. 1. According to petitioner, such an application was filed by respondent No. 1 along with affidavit of respondents with the office of Excise Department for including the name of petitioner. However, subsequently, respondent No. 1 filed another application with affidavit before the Excise Department, withdrawing the earlier application. The contention raised by respondent No. 1 was in respect of obtaining signature by the petitioner mis-leading him and taking un-due advantage of his old age. On perception, the petitioner approached the respondents. The respondents informed the petitioner that they are not inclined to accept the petitioner as partner in the firm concerned. They have given proposal of return of Rs. 15,00,000/- by three cheques of Rs. 5,00,000/- each drawn on Vaijapur Merchants’ Co-operative Bank, Gangapur Branch. All these three cheques were for 17-7-2005. The cheques were presented by the petitioner to his Banker and in due course of time, have been bounced. The petitioner, thereafter, filed summary criminal case under Section 138 of the Negotiable Instruments Act in the Court of learned Judicial Magistrate F. C. Gangapur, District Aurangabad. Said criminal case ended in conviction of respondent No. 1. Respondent No. 1 has filed an appeal challenging conviction and said appeal is pending.
6. Respondents have filed reply affidavit, duly sworn by respondent No. 1, aged about 82 years on the date of filing of the affidavit. In this reply, it is stated by respondent No. 1 that the petitioner has obtained signature of respondent No. 1 fraudulently on the blank stamp paper and blank cheque book under the pretext that the petitioner has to issue cheques while purchasing the country liquor. According to respondent No. 1, the petitioner did not make payment of Rs. 15,00,000/- to him as alleged in this petition. A statement is also made in this reply affidavit that there was an agreement between the petitioner and respondents regarding alleged partnership and initiating proceedings with the Excise Department for inclusion of the name of the petitioner as partner. The case alleged in the petition is denied in the reply affidavit. In paragraph No. 10 of the reply, reference is made to the notice Annexure “B” served on respondent No. 1 on behalf of petitioner. In that notice, the petitioner has claimed share in the profit and loss to the tune of 90 per cent, which is contrary to the deed of partnership, produced on record. According to respondent No. 1, the petitioner is his nephew and was working as servant with respondent No. 1. Shri Challani, Advocate has also invited my attention to Annexure R/l, wherein names of servants have been mentioned. In these names, name of petitioner Sanjay is mentioned as servant.
7. After hearing learned Counsel for the parties and considering the material produced on record, prima facie, in my view, petitioner and respondents, had entered into an agreement for arbitration in case of a dispute inter se amongst them. Such clause of arbitration is in the deed of partnership which is on record as item No. 14. This deed is notarised document. Page No. 1 is on stamp paper of Rs. 500/-. The signatures of the parties do appear on last page of the deed of partnership. Stamp paper for this deed of partnership seems to have been purchased by respondent No. 1 on the same day i.e. on 24-10-2005. It is not the case, prima facie, that this document is signed by respondent No. 1 Gangulal, old aged person alone. This document seems to have been signed by respondent Nos. 2 to 4 as well as the petitioner. On examination of this stamp paper, it is very tough to digest, prima facie, that signature on blank stamp paper was obtained by the petitioner. It is to be noticed that signature of petitioner and respondents are not on stamp papers, however, they are on paper simpliciter annexed with the stamp of Rs. 500/- and internal page thereof is No. 6. Prima facie, in my view, dispute / difference has been arisen between the petitioner and respondents. There is an arbitration agreement between the parties provided in item No. 14 of the deed of partnership. Deed of partnership is of 24-10-2005. Notice was addressed by the petitioner to respondent No. 1 on 28-3-2006. There is no denial in relation to this notice. Another notice dated 12-8-2006 is also placed on record, which is served by the petitioner upon respondents. The petition is filed on 16-8-2006. Prima facie, in my view, the petition filed is within limitation.
8. From the copy of statement, which is produced on record, it appears that statement of respondent No. 1 was recorded by the Excise Department, Vaijapur on 19-12-2005. In this statement, somewhat different case has been set up. In this statement, respondent No. 1 sets up a case that his signature was forcibly obtained by the petitioner. Thus, there is a deviation by respondent No. 1 from statement at the time of filing of the reply affidavit in this Court. The dispute between the parties cannot be said to be stale. It is also difficult to accede to the submission of the learned Counsel Shri Challani that a case of fraud is prima facie proved by respondent No. 1.1 am of the opinion that this application needs to be allowed by appointing a Sole Arbitrator in the proceeding.
9. Shri Patni, learned Advocate has placed reliance on the decisions in the cases of Masood Mohmmed Husain v. Gulam Rasul Mohammedali 2007(2) Mh.LJ. 116 : 2007(2) Bom.C.R. 291 and Qassim Mohd. Yousuf Aquil v. Sultana Abdul Ahad Narvel . It is held that an application under Section 9 can be considered in case of unregistered partnership firm in view of Section 69 of the Indian Partnership Act. Application under Section 11 is for appointment of the sole arbitrator or arbitral tribunal. Application under Section 9 can be filed seeking interim measures. In my view, judgment of the Division Bench of this Court can be considered even in case of an application for appointment of arbitrator under Section 11(5) and (6) of the Act. In this view of the matter, even the deed of partnership, unregistered document, can be accepted and considered for an application under Section 11 of the Act of 1996.
10. At this stage, I am directing the parties to suggest name of Arbitrator, if possible, amicably on the adjourned date.
11. S.O. to 28-8-2007. Heard respective counsel.
Both parties suggest name of Shri S.K. Kulkarni, Retired District Judge, Aurangabad to be an Arbitrator in the matter, who has also consented to act as such. I have no hesitation to accept the said suggestion.
12. In this view of the matter, Shri S.K. Kulkarni, F-1, Sector N-4, Cidco, Aurangabad is appointed as Arbitrator to resolve the dispute between the parties. The petitioner is directed to deposit Rs. 15,000/- (Rs. Fifteen Thousand only/-) in this Court, within four weeks, towards fees of Arbitrator for the present.
In the result, petition is partly allowed. Rule is made partly absolute in above terms. No order as to costs.