MOHAMMAD RAFIQ,J. - (1.) This application under section 11 of the Arbitration and Conciliation Act, 1996, has been filed by petitioner Sagar Choudhary, praying for appointment of an independent sole Arbitrator for resolution its disputes and differences with respondent Dilip Singh.
(2.) Petitioner and respondent were partners in M/s Alwar Indane, Shop No. 17, Shiv Complex, Near Jail Circle, Alwar (Raj.), which, according to the applicant, was carrying dealership of Indian Oil Corporation Limited in the area of Alwar (Rajasthan). A partnership deed was executed between the parties on 11.09.2014, wherein 49% share was agreed of the petitioner and remaining 51% share was agreed of the respondent. Earlier the dealership was allotted to a proprietorship firm of the respondent. While the said firm was reconstituted as a partnership firm because of financial crunches and the petitioner was admitted as one of the partner of the said firm to carry the said dealership business. The petitioner claims that he at that time invested a sum of Rs. 1,60,00,000/- into the said firm for carrying out day to day business activities. It was a clear understanding between the partners that in case the respondent failed to give the name of the petitioner endorsed in the said dealership of Indian Oil Corporation Limited, he shall refund the complete investment made by the petitioner. An application was sent by the respondent to the Indian Oil Corporation on 12.09.2014 for reconstitution of the firm and changing it from sole proprietorship to partnership firm by admitting the petitioner as one of the partners to the firm. After the aforesaid partnership deed was entered into between the parties, the petitioner started handling day to day affairs of the firm and he even signed the documents. The respondent on 22.01.2016 along-with 15-16 persons attacked the petitioner for which FIR No. 27/2016 was registered on the same day with Police Station Shivaji Park, Alwar, for offence under Sections 143, 341, 323 and 379 IPC. It was thereafter that the respondent filed a Civil Suit No. 34/04/16 along-with an application for Temporary Injunction No. 46/29/2016 before the court of Civil Judge and Judicial Magistrate No. 1, Alwar, against three persons, namely, the petitioner, Mr. Om Prakash Choudhary and Mr. Tara Chand. Their application for temporary injunction was rejected vide order dated 05.04.2016 on the premise that the respondent has not come with clean hands and suppressed the material facts. In that suit, an application under Order 7, Rule 11 of the Code of Civil Procedure was preferred by the petitioner for rejection of the suit on the ground of arbitration clause available in the partnership deed. Application was rejected by the court vide order dated 08.02.2016. According to the petitioner, challenge to that order was made in a writ petition before this court. During pendency of the civil suit, the Indian Oil Corporation rejected the application for converting the proprietorship firm as partnership firm on the ground of pendency of various litigation and penalties pending against the respondent. The respondent by concealing the fact of rejection of the application, demanded more money from the petitioner in the garb of partnership deed with assurance that the application for reconstitution of partnership was in process.
(3.) Mr. Pankaj Gupta, learned counsel for petitioner, argued that in the light of clause 15 of the partnership deed executed between the parties, which contains the arbitration clause, the petitioner sent a notice dated 26.02.2016 to the respondent for his concurrence on the name of the arbitrator. The counsel for the respondent vide letter dated 23.03.2016 replied to the said notice and denied for appointment of arbitrator and disputed the arbitration clause. Thus the respondent failed to appoint the arbitrator. Learned counsel, in support of his arguments, has relied on a judgment of the Supreme Court in National Agricultural Co-op. Marketing Federation of India Ltd. v. Gains Trading Ltd. - 2007 (2) Arb. LR 339 (SC).;