IN THE HIGH COURT OF KERALA AT ERNAKULAM
AR No. 22 of 2007()
1. K.G.SABU, S/O.LATE K.V.GOPINATH,
... Petitioner
2. SHEENA.K., D/O.SASIDHARAN, KUDILINGAL
3. K.G.SHAJI, S/O.LATE K.V.GOPINATH,
4. MRS.BEETHA SHAJI, D/O.CHANDRA MOHAN,
Vs
1. C.S.SATHEESAN,
... Respondent
2. K.E.SUMA, W/O.C.S.SATHEESAN,
For Petitioner :SRI.MOHAN JACOB GEORGE
For Respondent :SRI.RAJEEV NAMBISAN
The Hon'ble MR. Justice PIUS C.KURIAKOSE
Dated :11/10/2007
O R D E R
PIUS C. KURIAKOSE, J.
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A.R. NO.22 of 2007
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Dated this the 11th day of October , 2007
O R D E R
On the basis of Annexures A1 and A2, the petitioners submit that
they and the respondents were carrying on business of Cable
Operators, T.V. Net Work Operators and other allied activities under
the name and style of ” Globe Vision”. In pursuance to Annexures A1
and A2, they entered into business agreement with M/s. Asianet
Satelite Communication (P) Ltd and with KSEB for the purpose of
cable T.V. Distribution to various households under the Electrical Sub
Division, Aluva. Annexures A3 and A4 agreements are relied on. It is
stated that during January 2006, disputes arose between the
petitioners and the respondents and it is claimed that the majority
partners resolved to expel respondents 1 and 2 from the partnership
vide resolution dated 31.5.2006. The first petitioner, who was
managing partner, instituted suit O.S. No.211/2006 before the Munsiff
Court, Aluva seeking a decree of injunction against respondents 1 and
2. In that suit, Annexures A4(a) counter affidavit was filed by the
respondents contending that the suit is not maintainable and that the
A.R.No.22/2007 2
disputes can be resolved only through the arbitration. The petitioners
point out that clause 26 of Annexure A2 is an arbitration agreement
between the parties and that disputes between the parties are to be
settled by arbitration through the arbitrator appointed unanimously by
the partners. Since the request of the petitioners to refer the disputes
for arbitration to be conducted by a retired District Judge was not
agreeable to the respondents, Annexure A5 notice followed by
Annexure A6 correction notice were issued to the respondents. To
Annexures A5 and A6, the respondents sent Annexure A7 reply
contending that the decision of the petitioners to expel respondents 1
and 2 is not legally sustainable for want of quorum to convene
meeting and that the appointment of the first petitioner as the
Managing Partner is also unsustainable. On receiving Annexure A7,
the petitioners sent Annexure A8 reiterating their stand to which the
respondents sent Annexure A9 in which it is stated that they have not
been informed about the actual subject matter of the disputes or about
the allegations against them. The petitioners submit that the
respondents are deliberately evading compliance with the demand of
the petitioners to settle the disputes by arbitration proceedings. In
paragraph 10 of the Arbitration Request, they have enumerated the
disputes. Annexure A10 is also relied on to show the present stage
A.R.No.22/2007 3
of the disputes between the parties. It is then stated in the
Arbitration Request that the first respondent maliciously got a
fraudulent partnership to be created with one Sri.P.S.Sreekumar and
got the same registered . On coming to know about that, the
petitioners filed Annexure A11 suit before the Sub Court, Paravoor for
declaration and for permanent prohibitory injunction against the
respondents. The said suit was decreed on 4.1.2007 and it is
claimed that the said suit does not relate to Annexure A1 and A2 and
was only for declaration relating to the sham partnership firm created
between the first respondent and Sri.Sreekumar for the purpose of
defeating the smooth functioning of the petitioners’ firm covered by
Annexures A1 and A2. The Arbitration Request on the above facts is
filed on the basis that the appointment procedure contemplated by the
agreement has failed and hence the petitioners are entitled to invoke
the statutory appointment procedure under Section 11 (5) of the
Arbitration & conciliation Act.
2. A detailed objection has been filed by the respondents
denying the allegations in the Arbitration Request. But, the
execution of Annexures A1 and A2 and the clauses contained therein
are not disputed and the existence of arbitration clause therein is not
disputed. It is contended that the request is not maintainable since
A.R.No.22/2007 4
the partnership firm is an unregistered one and the arbitration request
itself will be hit by Section 69 (3) of the Indian Partnership Act and
will have to be rejected. It is also contended that, having already filed
suit before the Sub court, Paravur(O.S.No.383/2006) i.e. Annexure
A11, the petitioners are not entitled to invoke the arbitration clause in
Annexures A1 and A2.
3. I have heard the submissions of Sri. Mohan Jacob George,
the learned counsel for the petitioners and Sri. Sajan Puthenveetil
representing Sri.Rajiv Nambisan the learned counsel for the
respondents. Placing very strong reliance on the judgment of the
Supreme Court in Jagdish Chandra Gupta v. Kajaria Traders
( India) Ltd. ( AIR 1964 Supreme Court 1882), it was submitted
on behalf of the respondents that the Arbitration Request is not
maintainable since the partnership evidenced by Annexures A1 and A2
is not a registered one. It was also argued on behalf of the
respondents that the very filing of Annexure A11 will amounts to
waiver of arbitration clause in Annexure A1 and A2 and for that reason
also, the present request under Section 11 (5) of the Act is not
maintainable.
4. Sri.Mohan Jacob George, the learned counsel for the
petitioners will very ably resist the submissions of the learned counsel
A.R.No.22/2007 5
for the respondents. The learned counsel would refer to various
judicial precedents governing Section 11, 5 and 6 of the Arbitration &
Conciliation Act.
5. I am unable to agree that the judgment of the Supreme
Court in Jagdish Chandra Gupta’s case (supra) is an authority for the
proposition that non registration of the partnership evidenced by
Annexures A1 and A2 will be fatal to the petitioners’ request for
appointment of an independent and impartial arbitrator. I am also
convinced that the scope of Annexure A11 suit is different from the
scope of the arbitration proceedings sought for by the petitioners.
6. Admittedly, disputes arisen between the parties and
Annexures A1 and A2 contains arbitration clause. The agreed
appointment procedure regarding appointment of arbitrator has failed.
Having regard to the statutory provisions and the judicial precedents
governing the point, I do not find any reason as to why this Arbitration
Request should not be granted. Therefore, This Arbitration Request
will stand allowed. It is open to the respondents to contend before the
arbitrator that the disputes are not arbitrable. The arbitrator will pass
award on that question also apart from adjudicating the claims set
out in the Arbitration Request and Annexure A10 by the petitioners
A.R.No.22/2007 6
and counter claims, if any which should be raised by the respondents.
According to me, no prejudice will be caused to either of the parties by
appointing the retired District Judge known for his learning and
integrity. Therefore, I appoint Sri.K.Ramachandran, Advocate of this
court and retired District Judge as Arbitrator for settling all the
issues between the parties. Arbitrator will enter on reference and
pass award at his earliest.
PIUS C. KURIAKOSE,
JUDGE.
dpk