THE HONBLE SRI JUSTICE K.C.BHANU AND THE HONBLE SMT JUSTICE ANIS CIVIL REVISION PETITION No.3872 OF2014 31-12-2014 S.LakshmiPetitioner M/s Reliance Builders, Hyderabad And others .Respondents Counsel for the Petitioner: Mr.M.V.Durga Prasad Counsel for the Respondents : Mr.S.Ravi for R1. Mr.S.Niranjan Reddy, For R2 to 8 and 13 Mr.KVR Chowdary, For R9 to R12 Mr.T.Bala Mohan Reddy, For R15 : ?. Cases referred:
1. (1987) 1 SCC2882.(2007) 7 SCC1253.AIR2000CaL.207 4.2010 (1) ALD453(DB) 5.2011 LAW SUIT (MAD) 2685 6.AIR1984AP107.(2010) 13 SCC888. (2010) 2 SCC2739.(2005) 8 SCC61810.(2007) 6 SCC79811.AIR2006SC242212.(2002) 4 SCC10513.(2002) 5 SCC51014.AIR1975SC129715.(2013) 9 SCC37416.AIR1954SC215THE HONBLE SRI JUSTICE K.C.BHANU AND THE HONBLE SMT JUSTICE ANIS CIVIL REVISION PETITION NO.3872 OF2014
ORDER: (per the HONBLE SRI JUSTICE K.C.BHANU) This revision is directed against the order and decree, dated 06-06-2014 in I.A.No.2437 of 2013 in O.P.No.1949 of 2013 on the file of the II Additional Chief Judge, City Civil Courts, Hyderabad.
2. Originally petitioner herein (1st respondent in I.A.) filed the above O.P.No.1949 of 2013 under Section 9 of the Arbitration and Conciliation Act, 1996 (for short the Act) seeking the following reliefs.
1. To appoint Advocate Commissioner to forthwith inspect the office of the 1st respondent situated at 101,102, Venkatarama Towers, M.No.3-6-69, Opposite Old Skyline Theatre Basheerbagh, Hyderabad-29 as well as the residences/offices of the respondents No.2 to 14 and seize all the books of accounts , vouchers, cash books, cheque books, income-tax returned, assessment orders, audited balance sheets and all other material evidence pertaining to the 1st respondent firm both paper and electronic form, including the hard diskettes either installed or separately kept in the systems and also portable hard disks found during the execution of warrant in all such premises along with the all the books of account and submit the same in a sealed cover before the Court to be sent to the Arbitrator adjudicating the disputes between the parties.
2. To direct the respondent Nos. 1 to 14 to cooperate with the Advocate-Commissioner and deliver all other documents and books mentioned in clause (1) above to the Advocate-Commissioner.
3. To grant ex-parte ad-interim injunction restraining the respondent Nos.1 to 13 from anyway dealing with the affairs of the 1st respondent firm either by way of alienating the assets including petition A schedule properties or withdrawing the funds or incurring any liabilities or obligations on behalf of or in the name of 1st respondent firm with or without any prefixes or suffixes or registration numbers.
4. To grant ad-interim injunction restraining the respondent Nos. 1 to 13 from entering into any transaction or deed or document of conveyance in respect of item No.1 of the petition A schedule in favour of the respondent No.15 or any other person.
5. To direct the respondent Nos. 19 to 26 not to permit any further transaction hereafter, particularly any debit or withdrawal of funds or by way of overdraft or other kinds of advances, except those permitted by this Court.
6. To direct the respondent Nos.16 to 18 not to enter into any further transactions or documents with the respondent Nos. 1 to 13 in respect of the ventures under development with the 1st respondent except with the prior permission of this Court. 6A To grant ad-interim injunction restraining the respondent Nos. 27 and 28 from dealing with or entering into any transactions by way of alienation or otherwise creating any interest in respect of item Nos. 1 to 3 of the petition A schedule in favour of any persons 7. And to pass such other order or orders as this Court may deem fit and proper in the circumstances of the case.
3. It is averred in the O.P. that 1st respondent firm was originally constituted as a partnership firm under a partnership deed, dated 19-04-1988 of which respondents 2 to 6 along with the respondents 11 to 13 were partners. It was under the partnership deed , dated 27-11-1991 under which Smt.Ashrafunnisa Begum, Sultan Naseeruddin and Sultan Rasheemuddin were inducted as partners. Again it was reconstituted under the partnership deed, dated 02-07-1992 under which the petitioner along with respondents 7 to 9 were inducted as partners and respondent No.10 who was minor then admitted to the benefits of partnership of the 1st respondent firm. Under the same partnership deed, respondents 11 to 13 along with Smt.Ashrafunnisa Begum, Sultan Naseeruddin and Sultan Rasheemuddin retired from the 1st respondent firm. Respondents 11 to 13 along with respondents 2 to 6 are now claiming that the firm, which was reconstituted and stood dissolved long back by partnership dated 27-11-1991 is still subsisting and is distinct from the reconstituted firm under the partnership deed, dated 02-07-1992. 2nd respondent was managing the 1st respondent firm from its inception and continued to be the Managing Partner of the reconstituted firm and he was given all the powers under the partnership deeds executed from time to time to constitute and reconstitute of the 1st respondent firm and finally the firm reconstituted under the partnership deed, dated 02-07-1992 alone has been carrying on the business in the name and style of M/s Reliance Builders from 1988 till date and all the transactions including the deeds of sale, purchase and development have been executed by or on behalf of and in the name of M/s Reliance Builders by the 2nd respondent. Thereafter, it came to the light that the 2nd respondent created bogus sale deeds in favour of his son and niece and other partners and their family members. This attitude of the 2nd respondent has given rise to certain differences in the middle of 2012. Thereupon, the petitioner prevailed over her husband and father-in-law to negotiate with the 2nd respondent and settle all the differences and disputes. The entire business of all its ventures has been carried on in the name and style of M/s Reliance Builders only. There is no other firm with the same name or with another prefixes or suffixes. The letter heads, registered deeds, agreements by and in favour of 1st respondent firm are made only in the name of M/s Reliance Builders and reconstituted firm was dissolved by notice of one of the partners. It cannot carry on new business as it was duly wound up after settlement of accounts, discharge of liabilities and distribution of all its assets in accordance with Section 48 of the Partnership Act. Hence, the O.P.
4. Respondents 1, 2, 4 to 6 and 11 and 12 herein (petitioners in I.A.) filed the above I.A. under Order VII Rule 11 r/w Section 151 CPC to reject the O.P. as it does not contain cause of action and that the petitioner herein has no locus standi to file the O.P. as admittedly she was not a party to the firm originally constituted on 19-04-1988.
5. It was averred in the affidavit filed in support of I.A. that the firm which was constituted on 19-04-1988 with Registration No.659/89 is totally different and distinct with that of the partnership firm which was constituted on 27-11-1991 and reconstituted on 02-07-1992 with Registration No.4680/92 and the differences between the Reliance Builders bearing Regn.No.659/89 and Reliance Builders bearing Regn.No.4680/92 have been incorporated in the tabular form. The firm bearing Regn.No.659/89 dated 03-03-1989 is with the following partners viz.,1) M.Srinivasa Rao, 2) M.Kaleswara Rao, 3) V.Ramakrishna, 4) Mrs.M.Padmaja Rao, 5) Mrs.V.Venkata Vajramma, 6) Mrs.V.Mani, 7) Mrs.V.Venkata Anitha and 8) Mrs.M.Rajeswari. The said firm was flouted under the name and style of M/s Reliance Builders and there is no change in the constitution of the partners from the inception till this day and the income tax returns are being filed in the firm Registration Number and its PAN No.AAAFR9780Q. The partnership deed, dated 27-11-1991 consisting of 11 partners for the purpose of construction of commercial/residential complex upon the land resumed by demolishing the building bearing No.3-6-69 situated at Basheerbagh, Hyderabad under the name and style of M/s Reliance Builders. The said partnership firm was reconstituted on 02-07-1992 with its original partners and 5 new partners were inducted. The said partnership deed was registered on 02-07-1992 with Regn.No.4680/92. The petitioner herein is no way concerned or associated with the 1st respondent firm and that she is only a partner in M/s Reliance Builders bearing Regn. No.4680/92 and the said firm did not undertake or execute any other work till today and that the registration number, pan number and other activities of the two firms are distinct and different and in no way interconnected and taking advantage of nomenclature of the two firms being the same, the petitioner herein proclaiming openly that they will cause disruption of the activities of the petitioners firm and that the M/s Reliance Builders bearing Regn.No.659/89 which was constituted on 19-04-1988 never dissolved and it is subsisting till date and pursuing the business activities unhampered all these years and that there is no arbitration clause in the partnership deed bearing Regn.No.659/89 and this fact has been clearly noted in I.A.No.1221/12 in O.S.No.1948 of 2012 on the file of the V Senior Civil Judge, City Civil Court, Hyderabad. In that suit, the petitioner filed I.A.No.1248 of 2012 in O.S.No.1948 of 2012 praying the Court to refer the parties to the arbitration in terms of Cl.11 of partnership deed, dated 02-07-1992. The said petition was dismissed and the same was confirmed by this Court in CRP No.815 of 2013. But, however, when the matter was carried to the Honble Supreme Court in S.L.P. (C) No.6208 of 2013, the matter was remanded to this Court, but the petitioner herein withdrew the CRP No.815 of 22013 after remand from the Supreme Court. Therefore, the order of the trial Court in I.A.No.1248 of 2012 in O.S.No.1948 of 2012 was not disturbed and it is still in operation. Hence, the I.A.
6. The petitioner herein (1st respondent in I.A.) filed counter affidavit in the said I.A. stating that the proceedings under Section 9 of the Act are summary and interlocutory in nature and Order VII Rule 11 has no application. The O.P. discloses cause of action, which are traversed in great detail. There is no dispute that the deed of reconstitution, dated 02-07-1992 including the petitioner herein as a partner contains arbitration clause. The tax returns and registrations are part of the fraudulent scheme of the petitioners and the truth or otherwise of these allegations can be gone into only by the arbitrator under Section 16 of the Act and beyond the scope of the present application and the documents filed by the petitioners are created for the purpose of denying the share of this respondent, which are ex-facie bogus and spurious. The allegations in Pars 6 to 11 in the I.A. are false and the petitioner herein reiterated the contents of O.P. and denied each and every allegation in the I.A. Hence, the petitioner herein prayed to dismiss the I.A.
7. The learned trial Judge after considering the material on record, came to the conclusion that the petitioner herein failed to fulfill the conditions as laid down under Section 9 of the Act to initiate proceedings before the Court and that she is not entitled to file O.P. and accordingly allowed I.A. rejecting O.P.No.1949 of 2013. Hence, this revision.
8. Mr.M.V.Durga Prasad, learned counsel appearing for the petitioner contended that I.A. filed by some of the respondents under Order VII Rule 11 CPC is not maintainable, that the proceedings under Section 9 of the Act are in the nature of summary proceedings, that without notices being served on some of the respondents, the trial Judge ought not to have passed the impugned order, that I.A. filed by the respondents does not disclose any grounds incorporated in Order VII Rule 11 CPC, that whether there is any reconstitution of firm or not and whether the petitioner is a partner or not are questions of fact, which have to be resolved by an arbitrator and the same has no bearing under Section 9 of the Act, that under Order VII Rule 11 CPC, the Court has to see only the plaint and documents filed along with the plaint to ascertain whether it discloses cause of action or not, but not the documents filed by the respondents to know whether the allegations made out a cause of action or not, that it is not in dispute that the petitioner herein is a partner of the 1st respondent firm by virtue of the reconstitution deed, dated 02-07-1992, that the documents filed by the respondents in I.A. cannot be looked into at the stage of Order VII Rule 11 CPC and the contentions raised by the respondents with reference to the pleadings and documents are yet to be proved and hence, they cannot be looked into, that there is no denial of firms managing partner, business office, staff, stationery and other advertisement material and it is one and the same in respect of both firms, that when the pleadings are not complete, the impugned order is passed and thereby causing miscarriage of justice and that this is not the stage to consider the case of the petitioner and hence, he prays to set aside the impugned order.
9. On the other hand, Mr.S.Ravi, learned senior counsel appearing for the respondent No.1 contended that PAN numbers of two firms is entirely different and income tax returns are being submitted separately for the firm bearing Regn.No.659/89 and also firm bearing Regn.no.4680/92, that there is no impediment under law that in the same name two firms can be registered and they can be operated from one place, that in the firm bearing Regn.No.659/89, the petitioner herein is not admittedly a partner and that firm has not been dissolved in terms of Section 63 of the Indian Partnership Act, 1932 (for short the Partnership Act), that the firm bearing Regn.No.4680/92 is constituted for specific purpose and for developing only one property, , that the O.P. under Section 9 of the Act is not maintainable in view of the fact that there was no arbitration clause in the said firm bearing Regn.No.659/89 and filing Original Petition is nothing but abuse of process of law and that considering the facts of the case, the trial Judge rightly allowed the I.A. and the same needs no interference by this Court.
10. Mr.S.Niranjan Reddy, learned counsel appearing for the respondents 2 to 8 and 13 contended that while dealing with O.P. under Section 9 of the Act, the Court has to decide whether it is valid arbitration agreement in terms of Section 7 of the Act, that under Section 9 of the Act, the party invoking the jurisdiction should be a party to the agreement and the said agreement should contain arbitration clause, that unless these two conditions are satisfied, such a person has no right to initiate the proceedings, that the documents, and material papers have been brought to the notice of the Court seeking to reject the O.P., that the petitioner failed to demonstrate about the constitution of firm, dated 19-04-1988, which was reconstituted on 27-11-1991 and again reconstituted on 02-07-1992 and therefore, there is no cause of action, that the findings in I.A.1248 of 2012 in O.S.No.1948 of 2012 on the file of the V Senior Civil Judge, Hyderabad have become final and the said order is in operation and the petitioner cannot re-agitate in some other form and as the petitioner failed to demonstrate reconstitution of firm, she is not entitled to claim any reliefs.
11. Mr.K.V.R.Chowdary, learned counsel appearing for respondents 9 to 12 and Mr.T.Bala Mohan Reddy, learned counsel appearing for respondent No.15 contended that the petitioner is not a party within the meaning of Section 2 (b) of the Act, that there was no pleading with regard to constitution of the firm originally in the year 1988 or that firm was reconstituted in the year 1992, that as CRP815of 2013 was withdrawn, the order in I.A.No.1248 of 2012 in O.S.No.1948 of 2012 on the file of V Senior Civil Judge, Hyderabad, has become final, that though leave is granted by this Court, it does not mean the said order has not been set aside in clear terms, that filing of application is nothing but abuse of process of law and hence, he prays to dismiss the revision.
12. Learned counsel for the parties relied on several decisions, which will be referred to at appropriate place.
13. For entertaining O.P. under Section 9 of the Act, two requirements are to be satisfied viz., 1) the party invoking the jurisdiction should be a party to the agreement and 2) such agreement must contain arbitration clause. Unless the above two conditions are fulfilled, no person has a right to initiate proceedings under Section 9 of the Act. Section 9 of the Act reads thus:
9. Interim measures by court:- A party may, before or during arbitral proceedings or at any time after the making of the arbitral award, but before it is enforced in accordance with Section 36, apply to a court:- (i) for the appointment of a guardian for a minor or a person of unsound mind for the purpose of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters, namely:- (a) the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing any samples to be taken or any observation to be made or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.
14. The word party is defined under Section 2 (h) of the Act, which means a party to an arbitration agreement. Section 2 (b) of the Act defines arbitration agreement which means an agreement referred to in Section 7. Section 7 of the Act reads thus:
7. Arbitration agreement:- (1) In this Part, arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in- (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. A conjoint reading of the above two definitions and the definition of arbitration agreement means a person invoking the jurisdiction under Section 9 of the Act must be one of the parties to the agreement and such an agreement must be in writing singed by the parties. Such a contract/agreement to a document must contain arbitration clause. For the purpose of invoking jurisdiction under Section 8 or 9 or 11 of the Act, the above conditions have to be fulfilled. If any one of the conditions have not been fulfilled, it can safely be said that the Court in which an application under Section 9 of the Act is filed, is without jurisdiction. In the absence of these two conditions, the Court cannot usurp the jurisdiction under Section 9 of the Act and it would be a futile or meaningless exercise to be taken up by the arbitrator.
15. The entire edifice of the petitioners case is that 1st respondent firm was constituted by partnership deed, dated 19-04-1988 for which, the respondents 2 to 6 along with respondents 11 to 13 were partners and it was reconstituted under partnership deed, dated 27-11-1991 under which three more partners were inducted and again it was reconstituted under partnership deed, dated 02-07-1992 under which the petitioner along with respondents 7 to 10 were inducted as partners. By virtue of the partnership deed, dated 02-07-1992, respondents 11 to 13, Smt.Ashrafunnisa Begum, Sultan Naseeruddin and Sultan Rasheemuddin retired from 1st respondent firm.
16. On the other hand, it is the specific case of the respondents that respondents, 1,2, 4 to 6 and 11 and 12 that the partnership deed, dated 03-03-1999 with Regn. No.659/89 (for convenience, it shall be referred to first firm) which was registered in pursuance of agreement, dated 19-04-1988 is a distinct and separate from that of the firm constituted on 27-11-2991, which was registered on 02-07-1992 with Regn.No.4680/92 (for convenience, it shall be referred to as second firm) and the second firm was constituted for specific purpose of construction of commercial/residential building upon land resumed by demolishing the building bearing No.3-6-69 situated at Basheerbagh, Hyderabad and that PAN number for the first firm is AAAFR9780Q whereas the PAN number for the second firm is AAAFR9779F. It is also the specific case of the respondents that first firm has not been dissolved nor reconstituted and that there is no recital in the deed of second firm to the effect that it was reconstituted in pursuance of dissolution of the first firm or inducted new partners into second firm.
17. It is not in dispute before this Court that there is no arbitration clause in the agreement of the first firm whereas Cl.23 of deed of partnership dated 27-11-1991 contains arbitration clause. Similarly the said agreement, which was registered with Registrar of firms and came into effect from 02-07-1992 contains arbitration clause. After dissolution of the first firm, second firm was constituted or second firm was reconstituted in pursuance of first firm, then certainly the Court will have jurisdiction to entertain application under Section 9 of the Act and pass appropriate orders.
18. It is necessary to refer to the order, dated 05-02- 2013 in I.A.No.1248 of 2012 in O.S.No.1948 of 2012, which was filed under Section 8 of the Act to stay the suit by referring the parties to arbitration in terms of clause 11 of partnership deed, dated 02-07-1992. A categorical finding was recorded to the effect that in the partnership deed, dated 19-04-1988, the petitioner is not a party and it does not contain any arbitration clause and that the petitioner came up with the present petition in respect of partnership deed, dated 09-07-1992 which is totally different and the respondents therein are not concerned with the questioning of partnership deed, dated 09-07-19192 and accordingly, dismissed the application. Challenging the same, the petitioner herein filed CRP815of 2013 before this Court. A division bench of this Court vide order, dated 15-04-2013 held thus: It is the specific case of the 1st respondent that the relief of injunction prayed for by it, is in relation to their activity and business covered by Ex.R2. Admittedly, the petitioner is not a party to that. In case the arrangement under Ex.R2 was either dissolved or merged with the one, which was brought into existence through Ex.R5 and thereafter. Ex.R7, then again, the request of the petitioner could have been acceded to. However, a perusal of Ex.R2 on the one hand and Exs.R5 and R7 on the other, prima facie, discloses that these two are separate and independent arrangements. The mere fact that some of the partners are common to both the arrangements does not, by itself, indicate the merger or the unity. The trial Court in our opinion has arrived at just and correct conclusion that the dispute in the suit is not the subject matter of the arrangement under Ex.R7 and thereby, the arbitration clause does not govern the situation. At any rate, the question as to whether the subject matter of the suit is covered by the partnership deed, Ex.R7, can certainly be identified as an issue to be decided in the suit.
19. While observing, this Court directed the trial Court to frame an issue as to whether the partnership brought into existence through Ex.R5 and reconstituted through Ex.R7 is in continuation of one constituted under Ex.R2 or whether these two arrangements are independent of each other. Challenging the same, the petitioner herein filed Civil Appeal No.6208 of 2013 in Special Leave petition (Civil) No.21920 of 2013. The Honble Supreme Court, vide order, dated 26-07-2013 held thus: To appreciate the rivalised submissions assiduously propounded at the Bar, we have carefully scrutinized the orders passed by the learned trial Judge and that of the High Court. The trial Court as is evincible expressed the view after referring to the numerous authorities that the suit did not relate to the partnership deed, dated 02-07-1992 but pertains to the deed dated 19-4-1988 which does not contain any arbitration clause. A contention was urged before the High Court relating to continuity of the arrangement and the applicability of the arbitration clause incorporated in the partnership deed, dated 2-7-1992. It is perceptible from the order passed by the High Court that it has referred to the documents but really not addressed to the thrust of the dispute by referring to the averments made in the civil revision and the proponements made by the counsel on behalf of the revisionist before it. In fact, we are inclined to think there was no justification to direct the trial Judge to frame an issue to find out whether the suit is covered by the partnership deed. To return a finding as regards the attractability of Section 8 of the 1996 Act, it was necessary on the part of the High Court to scrutinize the clauses and other assertions to arrive at a definite conclusion so that there could have been apposite adjudication. We may hasten to state that Mr.P.P.Rao, learned senior counsel urged this Court to go through the entire document to establish the point that there is no arbitration clause that would govern the lis in question. We are disposed to think that the said exercise should have been studiedly undertaken by the High Court and thereafter in case the controversy had traveled to this Court that would have been appropriately dealt with. We clearly perceive that the High Court has not really dealt with the core issue in a considered manner. In view of our aforesaid premised reasons, we set aside the order passed by the High Court and remit the matter for reconsideration, regard being had to the observations made hereinafter and decide the same in accordance with the as within a period of six weeks. Be it noted, we have not expressed any opinion on the merits of the matter.
20. In pursuance of the remand order, the CRP815of 2013 came up for hearing before this Court. This Court, vide order, dated 04-10-2013 held thus: The revision was dismissed by this Court on merits on 15-04-2013. The petitioner filed Civil Appeal No.6208 of 2013 before the Honble Supreme Court. The Civil Appeal was allowed by the Honble Supreme Court and their lordships directed this Court to hear the matter afresh and to decide the issue here itself. After remand, the revision was listed for hearing on 02-09-2013. At the request of the learned counsel for the petitioner, the matter was adjourned to today. It was made amply clear that since the Honble Supreme Court stipulated time for disposal of the revision, no further adjournment would be granted. Today, learned counsel for the petitioner sought to file documents running into about 1000 pages. We made it clear to him that the revision has to be decided on the basis of the material that was available before the trial Court and it would not be proper for us to decide the legality or otherwise of the order passed in the I.A. on the basis of the additional material of such a large volume. With this, learned counsel for the petitioner sought permission of this Court to withdraw the civil revision petition without prejudice to the right of his client to file a fresh application duly enclosing the additional material, which is now available with him. Permission is accorded and the civil revision petition is dismissed as withdrawn, leaving it open to the petitioner to file fresh application duly enclosing the material. In case, such application is filed, the trial Court shall decide the same on its own merits, after hearing both the parties. The miscellaneous petition filed in this revision shall also stand disposed of. There shall be no order as to costs.
21. From the above order, it is clear that liberty was given to the petitioner to file fresh application duly enclosing the material and if such application is filed, the trial Court shall decide the same on its own merits, after hearing both parties. From the above order, it is clear that the order of the trial Court, dated 05-02-2013 was not specifically set aside. Therefore, the findings recorded in I.A.No.1248 of 2012 in O.S.No.1948 of 2012 have become final. From the order of this Court, dated 04-10-2013, leave is granted to file fresh application under Section 8 of the Act duly enclosing all relevant documents. Admittedly, petitioner herein has not file fresh application under Section 8 of the Act in terms of leave granted by this Court. The prayer sought for in I.A.No.1248 of 2012 which is filed under Section 8 of the Act r/w Section 1151 CPC reads as follows For the reasons stated in the accompanying affidavit, the petitioner prays that this Honble Court may be pleased to forthwith stay the suit by referring the parties to arbitration in terms of clause (11) of the partnership deed, dated 02-07-1992 and pass such other order or orders as this Honble Court may deem fit and proper in the circumstances of the case. As the petitioner has not filed fresh application, the findings in the order, dated 05-02-2013 attained finality. But, the learned counsel for the petitioner vehemently contended that since leave is granted, it can be inferred that the order has impliedly set aside. Withdrawing of suits is governed by Order XXIII of CPC. Withdrawal are two types. 1) absolute withdrawal i.e., withdrawal by the plaintiff without the leave of the Court and 2) qualified withdrawal i.e., withdrawal with the leave of the Court. Primary object of Rule 1 of Order XXIII CPC is to allow the plaintiff to exercise his right to proceed with the litigation in his own way and also to ensure fair trial on merits. Question is when the party wants to withdraw the suit even with the leave of the Court, can it be said that the order passed is impliedly set aside.
22. On this aspect, learned counsel for the petitioner relied on a decision reported in SHEONONDAN PASWAN V STATE OF BIHAR , wherein it was held thus (para 12) There was one contention of a preliminary nature advanced by Mr. Nariman on behalf of Dr. Jagannath Mishra and that contention was that on a proper reading of the order on the review petition, made by A.N. Sen, J it was clear that the Review bench did not exercise the power of review and set aside the order made by the Original bench. The argument was that the order made by the Original bench stood unquashed and unreserved and it was therefore not competent to the Constitution bench to rehear the appeal on merits as if the order of the Original bench did not exist. It was also urged by Mr. Nariman on behalf of Dr. Jagannath Mishra that the order made by the Review bench was not legal and valid since it was a non-speaking order which did not contain any reasons why the order of the Original bench should be reviewed. This contention was of course not strongly pressed by Mr. Nariman 'but in any event we do not think that it has any substance. It is undoubtedly true that the order of the Review bench did not in so many terms set aside the order of the Original bench and used a rather unhappy expression, namely, "I. ...admit the review petition". But it is clear that when the Review bench used the expression "I...... admit the review petition" it plainly unequivocally meant that it was allowing the review petition and setting aside the order of the Original bench, otherwise it is difficult to understand how it could possibly "direct the re-hearing of the appeal". The appeal could be re-heard only if the review petition was allowed and the order of the Original bench was set aside and therefore obviously when the Review bench directed re-hearing of the appeal, it must by necessary implication be held to have allowed the review petition and set aside the order of the Original bench. We cannot allow the true meaning and effect of the order of the Review bench to be obfuscated by a slight ineptness of the language used by the Review bench. We must look at the substance of the order rather than its apparent form. We must therefore proceed on the basis that the order of the Original bench was set aside and re-hearing of the appeal directed by the Review bench. The above decision has no application to the present facts of the case because in the factual back ground when a review petition was admitted, it is understood rehearing of the appeal. If the contention of the learned counsel for the petitioner is to be accepted that when leave is granted, the order under challenge would be set aside, every petitioner in Civil Revision Petition withdraws the revision seeking leave of the Court and thereby there would not be any adjudication in the revision by the High Court. If this contention is to be accepted, it is nothing but encouraging the party to withdraw revision after leave of the Court. Therefore, unless the order of withdrawal contains a specific observation that the order under challenge was set aside, implied inference of setting aside the order under challenge under revision cannot be drawn. Even assuming for a moment that leave has been granted, the leave relates to only to file a fresh application along with all the documents under Section 8 of the Act to stay the suit by referring the parties to the arbitration in terms of clause 11 of the partnership deed, dated 02-07-1992 but not otherwise.
23. In pursuance of the leave granted by this Court, the petitioner has not taken any steps to file the application under Section 8 of the Act along with necessary documents. Therefore, the findings of the learned trial Judge in I.A.No.1248 of 2012 in O.S.No.1948 of 2012 have become final. The petitioner cannot be permitted to re-agitate the same in another form i.e., filing application under Section 9 of the Act.
24. Learned counsel for the petitioner vehemently contended that the provisions of Order VII Rule 11 CPC has no application as the proceedings under Section 9 of the Act were summary in nature and the petition filed by respondents does not disclose any grounds to reject the same at the threshold. For that purpose, he relied on a decision reported in ADHUNIK STEELS LTD V ORISSA MANGANESE AND MINERALS (P) LTD. , wherein it was held thus (para 21): It is true that the intention behind Section 9 of the Act is the issuance of an order for preservation of the subject matter of an arbitration agreement. According to learned counsel for Adhunik Steels, the subject matter of the arbitration agreement in the case on hand, is the mining and lifting of ore by it from the mines leased to O.M.M. Private Limited for a period of 10 years and its attempted abrupt termination by O.M.M. Private Limited and the dispute before the arbitrator would be the effect of the agreement and the right of O.M.M. Private Limited to terminate it prematurely in the circumstances of the case. So viewed, it was open to the court to pass an order by way of an interim measure of protection that the existing arrangement under the contract should be continued pending the resolution of the dispute by the arbitrator. May be, there is some force in this submission made on behalf of the Adhunik Steels. But, at the same time, whether an interim measure permitting Adhunik Steels to carry on the mining operations, an extraordinary measure in itself in the face of the attempted termination of the contract by O.M.M. Private Limited or the termination of the contract by O.M.M. Private Limited, could be granted or not, would again lead the court to a consideration of the classical rules for the grant of such an interim measure. Whether an interim mandatory injunction could be granted directing the continuance of the working of the contract, had to be considered in the light of the well-settled principles in that behalf. Similarly, whether the attempted termination could be restrained leaving the consequences thereof vague would also be a question that might have to be considered in the context of well settled principles for the grant of an injunction. Therefore, on the whole, we feel that it would not be correct to say that the power under Section 9 of the Act is totally independent of the well known principles governing the grant of an interim injunction that generally govern the courts in this connection. So viewed, we have necessarily to see whether the High Court was justified in refusing the interim injunction on the facts and in the circumstances of the case.
25. He further relied on a decision reported in NISSHO IWAI CORPN V VEEJAY IMPLEX , wherein it was held thus (para 10): NOWHERE in this Part any Civil Court is conferred with jurisdiction expressly to decide the question of factual existence or validity and legality of the arbitration agreement. This Section is coupled with non-obstante clause. So it is of mandatory nature. By this Section the Civil Court particularly this Court is stripped off jurisdictionconferred upon it under Clause 12 of the Letters Patent. When Clause 12 is not invokable so leave thereunder granted by this Court is also not sustainable. On this score also this application is bound to succeed. As such leave granted, Clause 12 of the Letters Patent is revoked. All interim orders, if any, stand vacated.
26. He further relied on a decision reported in SPA AGENCIES (INDIA) PRIVATE LIMITED V HARISH RAWTANI , wherein it was held thus (para 8): Section 17(1) of A and C Act is couched in broad language and confers power on arbitral tribunal to pass interlocutory orders as may be considered necessary. In our considered opinion, having regard to the phraseology in Section 17(1), an arbitrator can pass all orders as may be necessary. These orders may include an order - for injunction, to furnish security, to appoint commissioner to take evidence (in addition to Section 27), to appoint experts etc. But any such interim order shall be directed only to parties to arbitral proceedings and not to third party, and any interim order by the arbitrator cannot go beyond the reference of arbitration agreement. Be it also noted that a petition under Section 9 is not a suit before a Civil Court, but a remedy provided to party to an arbitration agreement to seek interim order in relation to subject matter of the arbitration pending adjudication.
27. He further relied on a Judgment in W.P.No.34689 of 2009 in case of M/S SOVEREIGN DEVELOPERS AND INFRASTRUCTURES LIMITED V PARAMOUNT VIJETHA HOLDING, wherein it was held thus (para 5): IN my opinion, a proceeding for an interim measure under Section 9 of the Arbitration Act is almost like an interlocutory application in a suit and hence such a proceeding cannot be construed as a suit within the meaning of Section 10 of the Code of Civil Procedure. Therefore, Section 10 of the Code of Civil Procedure is not applicable to proceedings under Section 9 of the Arbitration Act. Accordingly, I find no legal infirmity in the impugned order to warrant interference under the extraordinary jurisdiction of this Court under Articles 226 & 227 of the Constitution of India From the above decisions, it is clear that the application under Section 9 of the Act has to be dealt with by relying upon the principles governing the grant of interim injunction. It is also clear that proceedings under Section 9 of the Act are summary in nature. It is also clear that petition under Section 9 of the Act is not a suit before a civil Court and it is almost like an interlocutory application in a suit. Application under Section 9 of the Act is totally independent provision.
28. He further relied on a decision reported in KASTURI AND SONS LTD V K.C. PALANI SKWAMY , wherein it was held thus (para 89): The shares being goods, under the sale of goods Act as well as of Companies Act are covered under the provisions of Section 9 of the Arbitration & Conciliation Act and this Court can issue injunction against the person in possession of the goods which are subject matter of arbitration proceedings, even if they were not the parties. This decision has no application because, the petitioner admittedly is not a party to the first firm.
29. The grant of interim injunction is a discretionary remedy and in exercise of judicial discretion in granting or refusing to grant, the Court will take into consideration the following as guidelines as held by this Court in a decision reported in N.V.CHOWDARY V HINDUSTAN STEEL WORKS CONSTRUCTION LTD., 1.Whether the person seeking temporary injunction has made out a prima facie case- This is sine quo non. 2.Whether the balance of convenience is in his favour, that is, whether it could cause greater inconvenience to him if the injunction is not granted than the inconvenience which the other side would be put to if the injunction is granted. As to that, the governing principle is whether the party seeking injunction could be adequately compensated by awarding damages and the defendant would be in a financial position to pay them.
3. Whether the person seeking temporary injunction would suffer irreparable injury. It is, however, not necessary that all the three conditions must obtain. With the first condition as sine quo non at least two conditions should be satisfied by the petitioner conjunctively and a mere proof of one of the three conditions does not entitle a person to obtain temporary injunction. From the above decision, it is clear that the first condition of prima facie case is sine quo non. Unless the first condition is satisfied, the question of consideration of other two conditions or any one of them may not arise.
30. It is contended by the learned counsel for the petitioner that the trial Court placed reliance in the judgment of Supreme Court in Aravind Constructions Co. (P) Ltd (10 supra)., for a proposition which was not laid down and that the observations in that decision do not amount a ration decidendi in terms of Article 141 of the Constitution of India. Learned counsel for the petitioner relied on a decision reported in DAVINDER SINGH AND OTHERS V STATE OF PUNJAB AND OTHERS , wherein it was held thus (para 18): A judgment, as is well known is the authority for the proposition which it decides and not what can logically be deduced from. This Court in the case of Union of India v. Major Bahadur Singh (2006) 1 SCC368 has observed: "The courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of the courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of the courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes."
The court has proceeded to add: "Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper."
31. He further relied on a decision reported in BHUWALKA STEEL INDUSTRIES LIMITED V BOMBAYH IRON AND STELL LABOUR BOARD AND ANOTHER , wherein it was held thus (paras 67 and 68): On the other hand, Shri Singhvi, Learned Senior Counsel for the respondents urged that the rule of stare decisis was not and could not be viewed as an absolute rule. Reliance was also placed on the decision in Sarva Shramik Sanghatana (KV), Mumbai Vs. State of Maharashtra and Ors. [2008 (1) SCC494. So also Smt. Indira Jaising, Learned Senior Counsel for the respondents repelled this argument relying on the decisions in Maharashtra State Road Transport Corporation Vs. State of Maharashtra and Ors. (cited supra) and Danial Latifi and Anr. Vs. Union of India [2001 (7) SCC740. Our attention was also invited to treatise by Justice G.P. Singh, (11th Edition). It was urged by Shri Singhvi that in the aforementioned judgments of the Bombay High Court, excepting the judgment in Century Textiles and Industries Ltd. Vs. State of Maharashtra (cited supra), this question has not fallen for consideration at all. The Full Bench and more particularly, the Learned Single Judge (Hon'ble Deshmukh, J.) has rejected this argument that this question was not squarely before Hon'ble Rege, J.
in his two judgments in C. Jairam Pvt. Ltd. Vs. State of Maharashtra (cited supra) and S.B. More and Ors. Vs. State of Maharashtra and Ors. (cited supra) nor was it before the Division Benches in Judgments in Lallubhai Kevaldas and Anr. Vs. The State of Maharashtra and Ors. (cited supra), Irkar Sahu's and Anr. Vs. Bombay Port Trust (cited supra), Century Textiles and Industries Ltd. Vs. State of Maharashtra (cited supra) including this Court judgment in Maharashtra Rajya Mathadi Transport and Central Kamgar Union Vs. State of Maharashtra and Ors. (cited supra). The Learned Single Judge noted the argument that it was expressed in Lallubhai Kevaldas and Anr. Vs. The State of Maharashtra and Ors. (cited supra) that the Act did not apply to the manual workers in the scheduled employment, who were protected by the other labour legislations and the said judgment was followed thereafter in the case of Century Textiles and Industries Ltd. Vs. State of Maharashtra (cited supra) and, therefore, on principle of stare decisis, the settled position of law should not be disturbed. The Learned Judge has also noted the decision in State of Gujarat Vs. Mirzapur Moti Kureshi Kassab Jamat and Ors. (cited supra). The Learned Single Judge then, relying on the judgment of this Court in M/s. Good Year India Ltd. Vs. State of Haryana [AIR1990SC781, commented that the precedent is an authority only for what it actually decides and not for what may remotely or logically follow from it. The Learned Single Judge then went on to hold that what is binding is the ratio decidendi of the judgment. The Learned Judge noted that this question did not fall for consideration either in the two judgments by Hon'ble Rege, J.
in C. Jairam Pvt. Ltd. Vs. State of Maharashtra (cited supra) and S.B. More and Ors. Vs. State of Maharashtra and Ors. (cited supra) or even in the judgment in Lallubhai Kevaldas and Anr. Vs. The State of Maharashtra and Ors. (cited supra). In our view, the Learned Judge was absolutely correct in so holding. Close examination of judgments by Hon'ble Rege, J., as also judgment in Lallubhai Kevaldas and Anr. Vs. The State of Maharashtra and Ors. (cited supra) will show that the question about the correct interpretation and scope of the Section 2(11) of the Mathadi Act did not fall for consideration in those cases. THIS Court, in Sarva Shramik Sanghatana (KV), Mumbai Vs. State of Maharashtra and Ors. (cited supra) has specifically quoted from the decision in Quinn Vs. Leathem [1901 Appeal Cases 495]. as follows:- "Before discussing Allen Vs. Flood [1898 Appeal Cases 1]. and what was decided therein, there are two observations of a general character, which I wish to make; and one is to repeat what I have very often said before - that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all."
(Emphasis supplied) The Court therein again referred to the decision in Ambica Quarry Works Vs. State of Gujarat [1987 (1) SCC213 and upheld the observations therein to the effect that:-
"8. The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides and not what logically follows from it."
The Court further relied upon the decisions in Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. [2003 (2) SCC111, Bharat Petroleum Corpn. Ltd. Vs. N.R. Vairamani [2004 (8) SCC579 and finally, the decision in British Railways Board Vs. Herrington [All ER761 and has quoted the following observations therefrom:- "There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case.
11. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper."
Now, when we examine all the Bombay High Court's judgments on the basis of this ratio, it is clear that excepting the decision in Century Textiles and Industries Ltd. Vs. State of Maharashtra (cited supra), such position could not be obtained. There can be no dispute about the importance attached by this Court in the above mentioned cases, as relied upon by the appellants, which favour the consistency of law. There is no dispute about the proposition of law laid down by the Supreme Court because ratio of decision has to be understood with reference to the factual background. In order to have a correct perception of the ratio decidendi of a case, it is necessary to have a close look at the factual back ground of judgment itself. It is not everything said by a judge which has a force of ratio decidendi. In other words every observation found in a judgment is not a ratio. The decision of Supreme Court is an authority for the proposition which it decides. It is based upon facts.
32. Learned counsel appearing for the respondents contended that in the absence of any procedure laid down under special statute, the general principle of procedure could be applicable. For that he relied on a decision reported in SBP & CO. V PATEL ENGINEERING LTD AND ANOTHER , wherein it was held thus (para 19): IT is also not possible to accept the argument that there is an exclusive conferment of jurisdiction on the arbitral tribunal, to decide on the existence or validity of the arbitration agreement. Section 8 of the Act contemplates a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement on the terms specified therein, to refer the dispute to arbitration. A judicial authority as such is not defined in the Act. IT would certainly include the court as defined in Section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum (See Fair Air Engineers (P) Ltd. and another v. N.K.Modi ). When the defendant to an action before a judicial authority raises the plea that there is an arbitration agreement and the subject matter of the claim is covered by the agreement and the plaintiff or the person who has approached the judicial authority for relief disputes the same, the judicial authority, in the absence of any restriction in the Act, has necessarily to decide whether, in fact, there is in existence a valid arbitration agreement and whether the dispute that is sought to be raised before it, is covered by the arbitration clause. IT is difficult to contemplate that the judicial authority has also to act mechanically or has merely to see the original arbitration agreement produced before it, and mechanically refer the parties to an arbitration. Similarly, Section 9 enables a court, obviously, as defined in the Act, when approached by a party before the commencement of an arbitral proceeding, to grant interim relief as contemplated by the section. When a party seeks an interim relief asserting that there was a dispute liable to be arbitrated upon in terms of the Act, and the opposite party disputes the existence of an arbitration agreement as defined in the Act or raises a plea that the dispute involved was not covered by the arbitration clause, or that the court which was approached had no jurisdiction to pass any order in terms of Section 9 of the Act, that court has necessarily to decide whether it has jurisdiction, whether there is an arbitration agreement which is valid in law and whether the dispute sought to be raised is covered by that agreement. There is no indication in the Act that the powers of the court are curtailed on these aspects. On the other hand, Section 9 insists that once approached in that behalf, "the court shall have the same power for making orders as it has for the purpose of and in relation to any proceeding before it". Surely, when a matter is entrusted to a Civil Court in the ordinary hierarchy of courts without anything more, the procedure of that court would govern the adjudication [See R.M.A.R.A. Adaikappa Chettiar and anr. v. R.Chandrasekhara Thevar].
33. He further relied on a decision reported in ARVIND CONSTRUCTIONS CO. (P) LTD. V KALINGA MINING CORPORATION AND OTHERS , wherein it was held thus (para 15): The argument that the power under Section 9 of the Act is independent of the Specific Relief Act or that the restrictions placed by the Specific Relief Act cannot control the exercise of power under Section 9 of the Act cannot prima facie be accepted. The reliance placed on Firm Ashok Traders and Anr. Vs. Gurumukh Das Saluja and Ors. [(2004) 3 S.C.C. 155]. in that behalf does not also help much, since this Court in that case did not answer that question finally but prima facie felt that the objection based on Section 69 (3) of the Partnership Act may not stand in the way of a party to an arbitration agreement moving the court under Section 9 of the Act. The power under Section 9 is conferred on the District Court. No special procedure is prescribed by the Act in that behalf. It is also clarified that the Court entertaining an application under Section 9 of the Act shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it. Prima facie, it appears that the general rules that governed the court while considering the grant of an interim injunction at the threshold are attracted even while dealing with an application under Section 9 of the Act. There is also the principle that when a power is conferred under a special statute and it is conferred on an ordinary court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that court would apply. The Act does not prima facie purport to keep out the provisions of the Specific Relief Act from consideration. No doubt, a view that exercise of power under Section 9 of the Act is not controlled by the Specific Relief Act has been taken by the Madhya Pradesh High Court. The power under Section 9 of the Act is not controlled by Order XVIII Rule 5 of the Code of Civil Procedure is a view taken by the High Court of Bombay. But, how far these decisions are correct, requires to be considered in an appropriate case. Suffice it to say that on the basis of the submissions made in this case, we are not inclined to answer that question finally. But, we may indicate that we are prima facie inclined to the view that exercise of power under Section 9 of the Act must be based on well recognized principles governing the grant of interim injunctions and other orders of interim protection or the appointment of a receiver. According to the learned counsel for the petitioner, the above decisions have no application because the correctness of the view expressed by some High Courts in that regard is left open to be decided in appropriate case. Therefore, it is not a ratio within the meaning of Article 141 of the Constitution of India.
34. Mr.KVR Chowdary, learned counsel for some of respondents relied on a decision reported in M/S GROUPE CHIMIQUE TUNISIEN SA V M/S SOUTHERN PETROCHEMICALS INDUSTRIES CORPN LTD. , wherein it was held thus (para 6): Whether there is an arbitration agreement or not, has to be decided with reference to the contract documents and not with reference to any contention raised before a court of law after the dispute has arisen. Reference to pleadings before the Jordanian Courts would have been relevant if the plea was that the arbitration agreement between the parties is contained in the exchange of statement of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other (as contemplated under Section 7(4)(c) of the Act). Be that as it may. Section 2(b) of the Act defines 'arbitration agreement' as meaning an agreement referred to in Section 7 (extracted below) : "7. Arbitration agreement. - (1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract."
35. Bearing the above principles in mind, it has to be seen whether the petitioner has prima facie case for invoking the jurisdiction of the trial Court?.
36. The entire case of the petitioner rests upon the first partnership deed, which contain arbitration clause and the second partnership firm is reconstitution of first partnership firm. Though it is a question of fact, but at the same time, prima facie it has to be proved by the petitioner basing on the material on record that the second partnership firm is reconstituted in terms of first partnership firm. If the first firm is reconstituted as second firm, then there is no difficulty in accepting the case of the petitioner because there is no dispute that the deed of second firm contains an arbitration clause. There is enough material filed by the respondents to show that first firm is separate and distinct with that of the second firm. The first firm bearing Regn.No.659/89, second firm bearing Regn.No.4680/92 and PAN numbers of these two firms are different and the material also would go to show that income tax returns are being filed separately for first and second firms. There is no recital in the deed of second firm that it was reconstituted in pursuance of first firm or first firm was dissolved. Section 91 of the Indian Evidence Act, 1872 reads thus:
91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of document:- When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the fofmr of a document and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. It is a cardinal rule of evidence, not one of technicality, but of substance, which it is dangerous to depart from that where written documents exist, they shall be produced as being a best evidence of their own contents. Therefore, Section 91 of the Evidence Act restricts any evidence to contradict the terms of written contract. In the absence of any recital in the second deed of partnership that it was reconstituted, the contention of the petitioner that it is reconstituted firm is wholly untenable and it is without any basis. The deed of second partnership contains all the terms of contract. Therefore, the petitioner is debarred from raising any contentions contrary to the terms and conditions of second deed of agreement, which is reduced into writing. Admittedly, the petitioner is not a party to the first deed of agreement. When it is not shown that the first firm was merged or reconstituted in the second firm, it can be presumed that the first firm is continues to be in existence. If really, the first firm was dissolved or changed, a person specifically authorized by the firm should give a notice to the Registrar of such change of dissolution. Section 63 of the Partnership Act reads as follows:
63. Recording of changes in and dissolution of a firm:- (1) When a change occurs in the constitution of a registered firm any incoming, continuing or outgoing parktner and when a registered firm is dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorized in this behalf, may give notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms, and shall file the notice along with the statement relating to the firm filed under Section 59. Recording of withdrawal of a minor:- (2) When a minor who has been admitted to the benefits of partnership in a firm attains majority and elects to become or not to become a partner and the firm is then a registered firm, he, or his agent specially authorized in ths behalf, may give notice to the Registrar that he has or has not become a partner, and the Registrar shall deal with the notice in the manner provided in sub-section (1).
37. It is mandatory on the part of the Registrar to record notice and file notices along with the statement relating to the firm when once the firm gives a notice. The object of said provision is in the interest of trading public as well as partners. It would be easy to prove the existence of the firm in case a dispute between the parties among the partners themselves or between the trading public and firm. To show that the second firm is reconstituted, the proceedings of the Registrar in terms of Section 63 of the Partnership Act have not been filed by the petitioner. When the petitioner prima facie fails to prove that the second firm was reconstituted in pursuance of first firm in pursuance of the first firm, she is not entitled to file an application under Section 9 of the Act because, admittedly she is not a party to the first firm and also the deed of first firm does not contain any arbitration clause.
38. Coming to the balance of convenience, it must be shown by the petitioner that the comparative mischief of the inconvenience which is likely to arise from withholding the injunction will be greater than that which is likely to arise by granting it. The name of first firm and second firm is one and the same. The Income Tax Returns are being submitted by first firm by referring it as M/s Reliance Builders (Old) even after constitution of second firm. In all these returns and statement of account, the name of petitioner was not reflected right from the year 1988. Admittedly, disputes arose between the parties in the year 2012. After constitution of second firm, tax returns are filed in the name of M/s Reliance Builders (new). Personal/individual income tax returns submitted by petitioner to show that there are two firms namely Reliance Builders (old) and Reliance Builders (new). On the admitted documents (Income Tax Returns) it is clear that first firm is separate and distinct with that of second firm.
39. Coming to the aspect of irreparable injury, the petitioner has not come to Court with clean hands. Suppressing important aspects a petition is filed under Section 9 of the Act. There is no iota of evidentiary material to show that the first firm was reconstituted as second firm. Even if the injunction is refused, she would not suffer irreparable loss which cannot be compensated in terms of damages. It cannot be said that the income tax returns being submitted by both firms are fabricated foreseeing the disputes would crop up between the parties in the year 2012.
40. When it goes to the jurisdiction of entertaining an application under Section 9 of the Act, the Court has to reject the same. The question of jurisdiction can be raised by the respondents in the O.P. by duly bringing to the notice of the Court about jurisdiction of the Court. Therefore, though Order VII Rule 11 CPC has no application, still the issue can be decided whether the facts of the case falls under Section 9 of the Act.
41. Learned counsel for the petitioner relied on a decision reported in BHATIA INTERNATIONAL V BULK TRADING S.A. AND ANOTHER , wherein it was held thus (para 29): WE see no substance in the submission that there would be unnecessary interference by courts in arbitral proceedings. Section 5 provides that no judicial authority shall intervene except where so provided. Section 9 does not permit any or all applications. It only permits applications for interim measures mentioned in clauses (i) and (ii) thereof. Thus there cannot be applications under Section 9 for stay of arbitral proceedings or to challenge the existence or validity of arbitration agreements or the jurisdiction of the arbitral tribunal. All such challenges would have to be made before the arbitral tribunal under the said Act. There is no dispute about the law laid down by the apex Court. It is also clear that Section 9 of the Act permits application for interim measures as mentioned therein. The main purpose of granting interim measures is the preservation of property in dispute till legal rights and conflicting claims of parties before arbitral proceedings are adjudicated. Interference is called for by the Court when the application under Section 9 of the Act itself is not maintainable.
42. It is contended by the learned counsel for respondents that the order impugned in this Court is appealable under Section 37 of the Act and even Section 37 has no application, the aggrieved person has to file revision before this Court under Section 115 of CPC but not under Article 227 of the Constitution of India. Learned counsel for the respondents relied on a decision reported in ITI LTD V SIEMENS PUBLIC COMMUNICATIONS NETWORK LTD., , wherein it was held thus (paras 21 and 22): Provisions of S. 37 of the Act of 1996 bars second appeal and not revision under S. 115 of the Code of Civil Procedure. THE power of appeal under S. 37(2) of the Act against order of Arbitral Tribunal granting or refusing to grant an interim measure is conferred on Court. Court is defined in S.2(e) meaning the 'principal Civil Court of original jurisdiction' which has 'jurisdiction to decide the question forming the subject-matter of the arbitration if the same had been the subject-matter of the suit.' THE power of appeal having conferred on a Civil Court all procedural provisions contained in the Code would apply to the proceedings in appeal. Such proceedings in appeal are not open to second appeal as the same is clearly barred under sub-secton (3) of S.
37. But I agree with the conclusion reached by brother Hegde, J.
that the supervisory and revisional jurisdiction of High Court under S. 115 of the Code of Civil Procedure is neither expressly nor impliedly barred either by the provisions of S. 37 or S. 19(1) of the Act. Section 19(1) under Chapter V of Part I of the Act merely states that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure. THE said action has no application to the proceedings before Civil Court in exercise of powers in appeal under S. 39(2) of the Act. THE supervisory jurisdiction to be exercised by the High Court under S. 115 of the Code is for the purpose of correcting jurisdictional error if any committed by Subordinate Court in exercise of power in appeal under S. 37(2) of the Act. THE approach made to the revisional Court under S. 115 of the Code is not a resort to remedy of appeal. In appeal, interference can be made both on facts and law whereas in revision only errors relating to jurisdiction can be corrected. Such revisional remedy is not expressly barred by the provisions of the Act. We have also not found any implied exclusion of the same on examination of the scheme and relevant provisions of the Act 43. Learned counsel for the petitioner relied on the judgment in C.A.No.9699 of 2014, dated 14-10-2014 in case of SAMEER SINGH V ABDUL RAB, wherein it was held thus (para 22): Whether the executing Court in the obtaining circumstances, has correctly expressed the view that it has become functus officio or not and thereby it has jurisdiction or not, fundamentally pertains to rectification of a jurisdictional error. It is so as there has been no adjudication. If a subordinate court exercises its jurisdiction not vested in it by law or fails to exercise the jurisdiction so vested, the said order under Section 115 of the Code is revisable as has been held in Joy Chand Lal Babu V Kamalaksha Chaudhury and others (AIR1949SC239. The same principle has been reiterated in Keshardeo Chamria v Radha Kissan Chamria and others (air 1953 sc 23) and Chaube Jagdish Prasad and another v Ganga Prasad Chaturvedi (AIR1959sc 492). Needless to emphasise, the said principle is well-settled. After the amendment of Section 115 CPC w.e.f. 1.7.2002 the said power is exercised under Article 227 of the Constitution as per the principle laid down in Surya Dev Rai (supra). Had the executing court apart from expressing the view that it had become functus officio had adjudicated the issues on merits, the question would have been different for in that event there would have been an adjudication.
44. He further relied on a decision reported in BABBUMAL RAICHAND OSWAL V LAXMIBAI R.TARIE AND ANOTHER , wherein it was held thus (para 7): It would, therefore, be seen that the High Court cannot, while exercising jurisdiction under Art. 227, interfere with findings of fact recorded by the subordinate court or tribunal. Its function is limited to seeing that the subordinate court or tribunal functions within the limits of its authority. It cannot correct mere errors of fact by examining the evidence and reappreciating it. What Morris, L. J., said in Rex v. Northumberland Compensation Appeal Tribunal ( (1952-1 All ER122 in regard to the scope and ambit of certiorari jurisdiction must apply equally in relation to exercise of jurisdiction under Art.
227. That jurisdiction cannot be exercised: "as the cloak of an appeal in disguise. It does not lie in order to bring up an order or decision for rehearing of the issues raised in the proceedings."
If an error of fact, even though apparent on the face, of the record, can not be corrected by means of a writ of certiorari it should follow a fortiori that it is not subject to correction by the High Court in the exercise of its jurisdiction under Art.
227. THE power of superintendence under Article 227 cannot be invoked to correct an error of fact which only a superior court can do in exercise of its statutory power as a court of appeal. THE High Court cannot in guise of exercising its jurisdiction under Art.227 convert itself into a court of appeal when the legislature has not conferred a right of appeal and made the decision of the subordinate court or tribunal final on facts.
45. He further relied on a decision reported in SAMEER SURESH GUPTA THROUGH PA HOLDER V RAHUL KUMAR AGARWAL , wherein it was held thus (para 7): It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court 's power under Article 227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court 's jurisdiction of superintendence under Article 227. (k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu. (l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory. (m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the Tribunals and Courts subordinate to the High Court. (n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above. (o) An improper and a frequent exercise of this power will be counterproductive and will divest this extraordinary power of its strength and vitality.
"46. He further relied on a decision reported in WARYAM SINGH AND ANOTHER V AMARNATH AND ANOTHER , wherein it was held thus (para 14): THIS power of superintendence conferred by Article 227 is, as pointed out by Harries, C. J., in - 'Dalmia Jain Airways Ltd. v. Sukumar Mukherjee', AIR1951Cal 193 (SB) , to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors. As rightly pointed out by the Judicial Commissioner in the case before us the lower Courts in refusing to make an order for ejectment acted arbitrarily. The lower Courts realised the legal position but in effect declined to do what was by section 13(2)(i) incumbent on them to do and thereby refused to exercise jurisdiction vested in them by law. It was, therefore, a case which called for an interference by the Court of the Judicial Commissioner and it acted quite properly in doing so. In our opinion there is no ground on which in an appeal by special leave under Article 136 we should interfere. The appeal, therefore, must stand dismissed with costs. From the above decisions, it is clear that in certain circumstances, jurisdiction under Article 227 of the Constitution of India can be exercised when the Act does not contemplate an appeal against an order under Section 9 of the Act. The power of superintendance conferred on High Courts under Article 227 of the Constitution of India over subordinate courts and inferior tribunal is judicial as well as administrative judicial review is to ensure that the Courts and tribunals inferior to High Court have done what they were required to do. Section 37 of the Act reads thus:
37. Appealabe orders:- (1) An appeal shall lie from the following orders (and from no others) to the court authorized by law to hear appeals from original decrees of the court passing the order, namely:- (a) granting or refusing to grant any measure under Se.9; (b) setting aside or refusing to set aside an arbitral award under Section 34. (2) An appeal shall also lie to a court from an order of the arbitral tribunal:- (a) accepting he plea referred to in sub-section (2) or sub-section (3) or section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. The present case does not cover under any one of the clauses as referred to under Section 37 of the Act.
47. Insofar as exercising the revisional jurisdiction under Section 115 CPC is concerned, the High Court may call for the record of any case, which has been decided by any Court subordinate to such High Court where no appeal shall lie to satisfy itself on three aspects viz., 1) that the order passed by the subordinate court is within its jurisdiction, 2) in case one in which the Court ought to exercise jurisdiction and 3) that in exercise of jurisdiction, the Court has not acted illegally i.e., in breach of some provision of law or with material irregularity i.e., by committing some error of procedure in the course of trial which is material and that it may affected the ultimate decision. The primary object of Section 115 CPC is to prevent subordinate Courts from acting illegally, arbitrarily and capriciously in exercise of their jurisdiction. Therefore, the revisional power that is to say supervisory over the subordinate Courts is to ensure that errors of so grave nature as jurisdiction should be corrected as soon as they brought to its notice. Even assuming for a moment that the revisional jurisdiction can be exercised under Article 227 of the Constitution of India in respect of the present case, the trial Court has not committed any illegality or there is no arbitrary action or the order under challenge causes grave miscarriage of justice. The order under challenge is in accordance with law.
48. For the foregoing reasons, we have no hesitation to hold that filing of O.P.1949 of 2013 by the petitioner herein for the relief sought for is duly misconceived and is not maintainable. Though rejection of O.P. does not come within the parameters of Order VII Rule 11 CPC, but in the facts and circumstances of the case and from the admitted documents available on record and the allegations in the O.P. do not fulfill the requirements under Section 9 of the Act. Considering these aspects, the trial Court rightly allowed I.A.No.2437 of 22013 in O.P.No.1949 of 2013 and the said order needs no interference by this Court.
49. Though it is contended by the learned counsel appearing for the petitioners that the pleadings are not complete and some of the respondents have not been served, the same cannot be a ground to wait for service of the respondents especially when no adverse order is passed against the respondents. Though several respondents have been impleaded as parties, they are not at all necessary parties for deciding the application under Section 9 of the Act. As the O.P. filed by the petitioner herein under Section 9 of the Act is without jurisdiction, non service of some of the respondents does not in any manner affect the impugned order.
50. Accordingly, the Civil Revision Petition is dismissed. No order as to costs. Miscellaneous petitions, if any, pending in this revision shall stand closed. ----------------------- K.C.BHANU, J ----------------- ANIS, J DATED:
31. T DAY OF DECEMBER, 2014