Dhirubhai Naranbhai Patel, J. - (1.) This application has been preferred under Sub -section 6 of Sec. 11 of the Arbitration and Conciliation Act, 1996 (for the sake of brevity hereinafter to be referred to as the "Act, 1996") for the appointment of an Arbitrator.
(2.) Factual Matrix: In the year 1955, partnership was entered into between Thakur Prasad Sao, Lakshmi Prasad Sao and Sheo Shankar Prasad Sao. This partnership deed is dated 1st April, 1995. Clause 16 and Clause 20 thereof reads as under: "16. That the firm will not be dissolved on the death of any of the partners, if any partner dies his heirs or other legal representatives will be considered to be taken in as a partner in his place or give the benefit of the partnership if a minor. In case his heirs or other legal representative do not agree to continue as partner of the deceased partner will be considered to have retired from the partnership as from the date of his death and the partnership will continue with only the surviving partner. Provided always that in such event or in the even of the partnership being determined by any of the provisions hereinbefore contained or under any provision of the Indian Partnership Act, 1932, then and in any such cases other Partner shall subject to the terms hereinafter mentioned purchase at their option the shares of deceased, insolvent or retiring partner or partners, as the case may be, in the business and property of the Firm and the Firm and the Partnership constituted under these presents shall continue with the necessary alteration in the shares and capital of the remaining partners. 20. Any difference which may arise between the partner or their representatives regarding interpretation of these presents or regarding the rights and liabilities of any partner arising hereunder or any other matter or thing concerning the Firm or the affairs thereof shall be referred to arbitration under the provisions of the Indian Arbitration Act, 1940." Lakshmi Prasad Sao expired in the year 1982 and Thakur Prasad Sao expired in the year 1983 and, therefore, partnership was reconstituted and all the legal heirs of Lakshmi Prasad Sao (three in number), Sheo Shankar Prasad Sao and Sandeep Kumar Sao, S/o. Sheo Shankar Prasad Sao were the partners of fresh partnership firm in the year 2004. Thereafter, Sheo Shankar Prasad Prasad Sao expired in the year 2010 and again there was reconstitution of the partnership firm in the year 2010. From the aforesaid partnership firm of the year 2004, Sheo Shankar Prasad Sao was dropped and rests of the partners i.e. all the legal heirs of Lakshmi Prasad Sao (three in number) and Sandeep Kumar Sao were the partners of reconstituted partnership firm in the year 2010. Revenue notices were issued upon the partnership firm viz. M/s. Thakur Prasad Sao and upon their partners for the payment of the revenues. The notices were issued by the State Government. The legal heirs of Thakur Prasad Sao who are the applicants in this Arbitration Application have denied their liability for the payment of the revenues to the State Government on the ground that they were never inducted as partners in the partnership firm viz. M/s. Thakur Prasad Sao, after the death of Thakur Prasad Sao in the year 1983. The partnership firm was run by Sheo Shankar Prasad Sao and others and, therefore, it has been stated on oath by the legal heirs of Thakur Prasad Sao (who are applicants in this case) that they are denying their liabilities. There are similar allegations by Sheo Shankar Prasad Sao about the liabilities of these applicants for the payment of the revenues to the State. The allegations and counter allegations are of the year 1993 to 1999 for the dues of the year 1977 -78. Various annexures have been annexed with the memo of this application and various annexures have been annexed with the affidavits filed by the parties to this litigation. After the year 1983 i.e. after the death of Thakur Prasad Sao, for the first time in the year 2008 the legal heirs of Thakur Prasad Sao i.e. the present applicants had filed a writ petition being W.P.(C) No. 2852 of 2008, wherein, following prayers were made in paragraph No. 1 of the said writ petition: "1. That in this writ application, the Petitioner prays for issuance of an appropriate writ(s)/order(s)/direction(s): (a) In the nature of Mandamus directing upon the respondent No. 2 to immediately and forthwith cancel the registration certificate issued by him on the basis of a purported reconstituted deed of partnership which has been reregistered under the statutory provisions of the Indian Partnership Act, 1932, which is barred and also without fulfilling the necessary prerequisites/formalities which was to be completed for the purpose of entering change of reconstitution of firm in terms of the restrictions imposed under Sec. 63 of the Indian Partnership Act, 1932; (b) In the nature of Mandamus directing upon the respondents to forthwith publish a newspaper report in order to bring it to the knowledge of the necessary statutory department as also the various departments of the State Government wherein, on the basis of the purported reconstituted deed of partnership, various benefits from the State Government is being derived misleading the said Government departments on the basis of the purported re -registration of the partnership firm. (c) For a declaration that for the purpose of change in reconstitution of partnership firm, no fresh registration of the partnership firm can be granted and only the changes in the reconstitution can be recorded by way of the reconstituted deed of partnership, that too only after fulfilling the statutory restrictions/provisions of Sec. 63 of the Indian Partnership Act, 1932 and any action taken without fulfillment of such pre -requisites/legal formalities of Sec. 63 is null and void. (d) For a direction upon the Respondent No. 2 to initiate criminal prosecution in terms of Sec. 70 of the Indian Partnership Act, 1932 against the purported to be partners of the purported reconstituted firm for misleading the Respondent No. 2 and also for making misleading statements in the purported reconstituted deed of partnership dated 10.06.2004." Thus for cancellation of the registration certificate, this writ petition was preferred challenging the reconstitution of the partnership firm registered in the year 2004. This writ petition is pending before this Court. Title Suit No. 5 of 2014 was preferred by the applicants of this Arbitration Application. The suit is pending in the court of Civil Judge (Senior Division) -I at Chaibasa, wherein, mainly it is prayed that the plaintiffs are the partners and as such they are continue to be partners of the firm viz. M/s. Thakur Prasad Sao under Clause 16 of the partnership deed dated 1st April, 1955. In this Title Suit, the defendants who are also respondents in this Arbitration Application, have not taken any plea of Sec. 8 of the Act, 1996. Ramesh Prasad Sao, who is petitioner No. 2 in this Arbitration Application, has preferred W.P.(C) No. 1680 of 2015 challenging the rejection of renewal of mining lease which was initially granted to Thakur Prasad Sao. Later on, it was granted to the partnership firm M/s. Thakur Prasad Sao. Miscellaneous Case No. 1 of 2008 was preferred by Bibhuti Bhushan Prasad Sao and Ramesh Prasad Sao under Sec. 9 of the Act, 1996. This application was dismissed mainly on the ground of territorial jurisdiction by the Sub -Judge -I, Chaibasa vide order dated 2nd May, 2008, against which, Arbitration Appeal No. 12 of 2008 has been preferred before this Court. Thus, mainly under Clause 16 to be read with Clause 20 of the partnership deed dated 1st April, 1955, this Arbitration Application has been preferred for appointment of an Arbitrator under Sub -section 6 of Sec. 11 of the Act, 1996 by the applicants, who are legal heirs of Thakur Prasad Sao, who was one of the partners in M/s. Thakur Prasad Sao -partnership firm.
(3.) Arguments canvassed by the learned senior counsel appearing for the applicants: Learned senior counsel appearing for the applicants mainly submitted that looking to Clause 16 to be read with Clause 20 of the partnership deed dated 1st April, 1955, the legal heirs of Thakur Prasad Sao are the partners and as the dispute has arisen between the partners, arising out of said partnership deed, notice was given to the rest of the partners for appointment of the Arbitrator. The said notice is dated 3rd September, 2008. Learned senior counsel appearing for the applicants further submitted that even though subsequent partnership deed have been entered into in the year 2004 and 2010, they do not take away rights of these applicants under Clause 16 to be read with Clause 20 of the partnership deed of the year 1955. In view of the decision rendered by Hon'ble the Supreme Court reported in : (2014) 5 SCC 1, Clause 16 of the partnership deed of the year 1955 automatically makes these applicants and their legal heirs as partners. Learned senior counsel appearing for the applicants has taken this Court to various annexures of several affidavits, filed in this Arbitration Application as well as to the various annexures of Arbitration Appeal No. 12 of 2008 and has submitted that in revenue proceedings, both the parties have tried to point out that they are not solely responsible for payment of revenue to the State Government. These applicants have stated that they are partners in the partnership firm, whereas, the respondents have stated that these applicants are not partners and, therefore, evidence is to be taken by the learned Arbitrator instead of the same is to be decided by this Court. Learned senior counsel appearing for the applicants has also pointed out from the memo of Title Suit No. 5 of 2014 that the suit was filed on the last date of limitation, otherwise, they have already mentioned in paragraph No. 43 that the suit was filed without prejudice to the rights and contentions in other litigations including this Arbitration Application No. 27 of 2008. Learned senior counsel appearing for the applicants has relied upon several decisions to fortify their contentions which are as under: : (2008) 13 SCC 667; : (2009) 1 SCC 267; : (2014) 5 SCC 1; (2014) 5 SCC 68; (2015) 8 SCC 193 and other decisions. On the basis of the aforesaid decisions, it is submitted by the learned senior counsel appearing for the applicants that the effect of the original partnership deed cannot be taken away by subsequent partnership deeds of the year 2004 and 2010. Learned senior counsel appearing for the applicants has also relied upon Sec. 40 of the Act, 1996 and has submitted that the arbitration agreement shall not be discharged by the death of any party and the same is enforceable by or against, the legal representative of the deceased party to the arbitration agreement and, hence, notice was given by these applicants on 3rd September, 2008 for appointment of the Arbitrator and as the respondents have not agreed for the same, let this Court appoint an Arbitrator who may be a retired Hon'ble Judge of this High Court.;