Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE SATHISH NINAN FRIDAY, THE 12TH DAY OF AUGUST 2022 / 21ST SRAVANA, 1944 AR NO. 48 OF 2022 APPLICANTS:
1 M/S CUBE MODULAR DESINGS,34/2294 AL, RK CHAMBERS, MAMANGALAM, PALARIVATTOM P.O., ERNAKULAM DISTRICT, PIN - 682025 REPRESENTED BY ITS MANAGING PARTNER JAYARAJ C., AGED 45 YEARS, S/O. K. P. CHANDRASEKHARA MENON, KIZHAKKEMADHOM, THRIKKARIYOOR P.O., THRIKKARIYOOR VILLAGE, KOTHAMANGALAM, ERNAKULAM DISTRICT, PIN-686 692. 2 JAYARAJ C.,AGED 45 YEARS, S/O. K. P. CHANDRASEKHARA MENON, KIZHAKKEMADHOM, THRIKKARIYOOR P.O., THRIKKARIYOOR VILLAGE, KOTHAMANGALAM, ERNAKULAM DISTRICT, PIN- 686 692. 3 JAYAKRISHNAN B,AGED 50 YEARS, S/0.BALAKRISHNAN PILLAI, KAPPILLIL HOUSE, PULLUVAZHI P.O., RAYAMANGALAM VILLAGE, PERUMBAVOOR, ERNAKULAM DISTRICT, PIN-683 541 BY ADV SHIJU VARGHESE
OPPOSITE PARTY: LAL O.B, AGED 55 YEARS, S/O. BHASKARAN KARTHA' OORAPPRA MADHOM, CHOWARA P.O., CHOWARA VILLAGE, ALUVA TALUK, ERNAKULAM, PIN - 683 571 BY ADVS.JOSEPH KODIANTHARA(SR) SHARAD JOSEPH KODANTHARA V.ABRAHAM MARKOS ISAAC THOMAS P.G.CHANDAPILLAI ABRAHAM ALEXANDER JOSEPH MARKOS THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 12.08.2022, ALONG WITH OP(CIVIL).2016/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE SATHISH NINAN FRIDAY, THE 12TH DAY OF AUGUST 2022 / 21ST SRAVANA, 1944 OP(C) NO. 2016 OF 2021 AGAINST THE ORDER COMMERCIAL SUIT 269/2020 OF PRINCIPAL SUB COURT / COMMERCIAL COURT, ERNAKULAM PETITIONER: LAL O.B,AGED 56 YEARS,S/O.BHASKARAN KARTHA, OORAPPRA MADHOM, CHOWARA P.O., CHOWARA VILLAGE, ALUVA TALUK, ERNAKULAM, PIN-683571. BY ADVS.BAIJU JOHN ELDHO K.MATHEW JOHN CHERIAN RESPONDENTS:
1 JAYARAJ C.,AGED 46 YEARS,S/O.K.P.CHANDRASEKHARA MENON, KIZHAKKEMADHOM, THRIKKARIYOOR P.O., THRIKKARIYOOR VILLAGE, KOTHAMANGALAM, ERNAKULAM DISTRICT, PIN-686692. 2 JAYAKRISHNAN.B, AGED 51 YEARS,S/O.BALAKRISHNAN PILLAI, KAPPILLIL HOUSE, PULLUVAZHI P.O., RAYAMANGALAM VILLAGE, PERUMBAVOOR, ERNAKULAM DISTRICT, PIN-683541. 3 M/S.CUBE MODULAR DESIGNS, 34/2294 A1, RK CHAMBERS, MAMANGALAM, PALARIVATTOM P.O., ERNAKULAM DISTRICT, PIN-682025 REPRESENTED BY ITS MANAGING PARTNER JAYARAJ.C, AGED 45 YEARS, S/O.K.P.CHANDRASEKHARA MENON, KIZHAKKEMADHOM, THRIKKARIYOOR P.O., THRIKKARIYOOR VILLAGE, KOTHAMANGALAM, ERNAKULAM DISTRICT, PIN-686692. 4 M/S.CUBE INTERNO, CIVIL LINE ROAD, PALARIVATTOM P.O., ERNAKULAM DISTRICT, PIN-682025, REPRESENTED BY ITS MANAGING PARTNER JAYARAJ.C, AGED 45 YEARS, S/O.K.P.CHANDRASEKHARA MENON, KIZHAKKEMADHOM, THRIKKARIYOOR P.O., THRIKKARIYOOR VILLAGE, KOTHAMANGALAM, ERNAKULAM DISTRICT, PIN-686692.
BY ADV SHIJU VARGHESE FOR R1 & R2 THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 12.08.2022, ALONG WITH AR.48/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Sathish Ninan, J.
============================== O.P(C) No.2016 of 2021 & Arbitration Request No.48 of 2022 ========================== Dated this the 12th day of August, 2022
ORDER
Order under Section 8 of the Arbitration and
Conciliation Act, 1996 in a suit, referring the parties to arbitration, is under challenge in O.P(C) No.2016 of
2021. In the Arbitration Request, the defendants in the suit seek for an order of appointment of Arbitrator.
2. The plaintiff and defendants 1 and 2 were
partners of the 3rd defendant partnership firm. The plaintiff retired from the firm. The suit is filed for settlement of the plaintiff's share in the firm. According to the plaintiff, defendants 1 and 2 have started another business in the name of the 4 th defendant firm and has diverted the funds of the 3 rd defendant firm. It is on the above allegations that the suit was filed. In the suit the defendants appeared and filed I.A No.3 of 2021 under Section 8 of the Arbitration and Conciliation Act, 1996 seeking to refer O.P(C) No.2016 of 2021& Arbitration Request No.48 of 2022 -: 2 :- the parties to arbitration. As per order dated 01.10.2021, the Court, finding the existence of an arbitration clause in the Partnership Deed, referred the parties to arbitration. The challenge in the O.P(c) is against the said order.
3. In the Arbitration Request, defendants 1 to 3 in the suit seek for appointment of an Arbitrator for resolution of the disputes between the parties in respect of the 3rd defendant firm through arbitration.
4. Heard the learned counsel on either sides.
5. Clause 17 of the Partnership Deed dated
21.05.2010 reads thus: “That in case of any dispute or difference arising between the partners or their legal representatives, the same shall be referred for decision to one or more arbitrators appointed, by the disputing party and the other partners and the decision of the arbitrator or arbitrators shall be binding and conclusive on all partners.” O.P(C) No.2016 of 2021& Arbitration Request No.48 of 2022 -: 3 :-
6. The claim being with respect to the rights of
the plaintiff as a partner of the firm, the court was right in holding that the parties are bound by the term in the partnership deed providing for arbitration for resolution of the disputes in relation to the firm.
7. The contention of the learned counsel for the
petitioner is that, the 4th defendant is not a party to the agreement and hence, is not bound by the arbitration clause. Therefore, reference to arbitration could not have been made, it is contended. As noticed above, the claim is with reference to the share of the plaintiff in the 3rd defendant partnership. It is only a monetary claim as against defendants 1 to 3. The claim being monetary in nature and that too in relation to the 3 rd defendant firm, the order of reference to arbitration cannot be faulted.
8. The existence of an arbitration clause being
admitted, and the parties being unable to arrive at a O.P(C) No.2016 of 2021& Arbitration Request No.48 of 2022 -: 4 :- consensus regarding appointment of an Arbitrator for resolution of the disputes, it is only proper that an Arbitrator be appointed by this Court in terms of Section 11(6) of the Arbitration and Conciliation Act, 1996. Accordingly, leaving open the rival contentions of the parties, the Arbitration Request is ordered as hereunder:
(a) Rtd. District Judge Sri.Thomas
Pallickaparambil, Evas' House, River Gate Apartments, Manakkad P.O, Thodupuzha, Pin- 685 608, Mobile No. - 9496739618, is provisionally nominated as the Sole Arbitrator to adjudicate upon the disputes between the parties.
(b) A copy of this order shall be communicated to the learned Arbitrator by the Advocate of the applicant within a period of one week from today. A copy of the
order shall also be forwarded to the learned Sole
O.P(C) No.2016 of 2021& Arbitration Request No.48 of 2022 -: 5 :- Arbitrator by the Registry.
(c) The Arbitrator is requested to forward his statement of disclosure under Section 11(8) r/w Section 12(1) of the Arbitration and Conciliation Act, 1996.
(d) The registry shall place the disclosure statement before this Court, for confirmation of the appointment of the Arbitrator.
(e) The Arbitrator's fees shall be payable as per
Schedule IV to the Arbitration and Conciliation Act, 1996. The Original Petition fails and is accordingly dismissed. Sd/- Sathish Ninan, Judge vdv APPENDIX OF OP(C) 2016/2021 PETITIONER EXHIBITS Exhibit P1 THE TRUE COPY OF THE PARTNERSHIP DEED DATED 21.05.2010. Exhibit P2 A TRUE COPY OF THE PLAINT DATED 02.07.2020 FILED BY THE PETITIONER BEFORE THE SUBORDINATE JUDGES COURT IN C.S.NO.269/2020. Exhibit P3 A TRUE COPY OF THE PETITION DATED 06.08.2021
FILED BY THE RESPONDENT NO.1 TO 3 BEFORE THE COMMERCIAL COURT THROUGH I.A.NO.3/2021 IN C.S.NO.269/2020.
Exhibit P4 A TRUE COPY OF THE COUNTER AFFIDAVIT DATED 02.09.2021 FILED BY THE PETITIONER IN I.A.NO.3/2021 IN C.S.NO.269/2020. Exhibit P5 A TRUE COPY OF ORDER DATED 01.10.2021 BY THE COMMERCIAL COURT. Exhibit P6 A TRUE COPY OF THE JUDGMENT DATED 01.10.2021 BY THE COMMERCIAL COURT. APPENDIX OF AR 48/2022 PETITIONER ANNEXURES Annexure A1 TRUE COPY OF THE PARTNERSHIP DEED DATED 21.5.2010 Annexure A2 TRUE COPY OF THE NOTICE DATED 30.8.2021 Annexure A3 TRUE COPY OF THE REPLY NOTICE DATED 8.9.2021