ANANTHESH BHAKTA REPTD. BY MOTER USHA A BHAKTA vs. NAYANA S. BHAKTA

Full Judgment Text

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.10837 OF 2016 (ARISING OUT OF SLP(C)NO. 31179 OF 2014) ANANTHESH BHAKTA REPRESENTED BY MOTHER USHA A.BHAKTA & ORS. .... APPELLANTS VERSUS NAYANA S. BHAKTA & ORS. .... RESPONDENTS JUDGMENT ASHOK BHUSHAN, J.

	Leave granted.

2.		This appeal has been filed against judgment

dated 08.07.2014 of High Court of Karnataka in Civil Revision No. 219 of 2014. The Civil Revision was filed by the appellants against the judgment and

order dated 27	th	May, 2014 of vacation District Judge,

Mangalore in Original Suit No. 5 of 2014 filed by the appellants/plaintiffs. In the Suit, I.A. No. IV was Page 1 2 filed by the defendants/respondents under Section 8(1) of Arbitration and Conciliation Act, 1996,

relying on arbitration agreement in retirement deed

dated 25.07.2005(hereinafter referred to as

retirement deed) as well as in the partnership deed

dated 05.04.2006(hereinafter referred to as

partnership deed). Learned District Judge has allowed

the application filed by the defendant under Section
8(1) of 1996 Act. Parties to the suit were referred
to the arbitration to s	ettle the dispute as per

arbitration agreement. The	High Court wide impugned

judgment has affirmed the	order of Trial Court with

observation that parties can press for an early

trial. The Revision Petition was disposed of JUDGMENT accordingly. Aggrieved against the judgment of High Court, the appellants/plaintiffs have filed this appeal.

3.		The brief facts necessary to be noted for

deciding this appeal are:

	(i) Late Ramabhakta had started a business of

	manufacture and sales of 'Beedi' under the

Page 2 3

	name 'M/s Neo Subhash Beedi Works'. After his

	demise, his six sons, namely, late M.

	Narasimha Bhakta, late M. Subhaschandra		Bhakta,

late M. Prakashchandra Bhakta, late M.		Ganesh

Bhakta, late M. Gangadhar Bhakta and			late M.
Ashok Bhakta, constituted the partnership firm.<br>(ii) M. Narsimha Bhakta retired from the firm<br>as per the release deed dated 30.06.1986 and<br>the remaining partners continued with the<br>firm.<br>(iii) M.Prakashchandra Bhakta died on<br>20.03.1995 and as per his Will, his minor son
	20.03.1995 and as per his Will, his minor son

Ashok Bhakta, constituted t	he	partnership firm.

Master M. Vinayaka Bhakta was admitted to the JUDGMENT partnership as per partnership deed dated 21.03.1995. On 06.03.1997, Subhaschandra Bhakta died and his LRs, namely Defendant Nos. 1 to 4 became partners. Ashok Bhakta died on 18.09.2001. The first plaintiff is son of late Ashok Bhakta. (iv) On 25.07.2005, retirement deed Page 3 4

	was executed in which Defendant Nos. 1 to 4

were stated to have retired from		partnership.

The partnership deed dated 05.04.2006 was<br>entered between late M. Gangadhar Bhakta, M.<br>Vinayaka Bhakta, Defendant No. 5 and M. Vipin<br>Bhakta(S/o late M. Ganesh Bhakta) and Master<br>M. Anantesh Bhakta,1st Plaintiff.<br>M.Gangadhar Bhakta expired and his estate is<br>represented by the Plaintiff Nos. 2 & 3.	The partnership deed dated 05.04.2006 was
4. The suit for partition		was filed by M.

Prakaschandra Bhakta a		nd others against M.

Subhaschandra Bhakta and others, being O.S. NO. 4 of

M. Anantesh	Bhak	ta,1	st	Plaintiff.

M.Gangadhar Bhakta	expired and his estate is

1985. The preliminary decree was passed on JUDGMENT 31.07.1986. M. Subhaschandra Bhakta and others filed FDP No. 24 of 1992 for preparation of final decree in which the compromise petition dated 04.04.1994 was filed and compromise decree was passed on 05.04.1994. As per the compromise decree, Item No. 1 of 'A' schedule property was allotted to M. Subhaschandra Bhakta and Item No. 2 was allotted to M. Prakashchandra Bhakta. Page 4 5

5.		An agreement to sale dated 19.04.1993 was

executed by M. Prakashchandra Bhakta in favour of


partnership firm. Similar agreement to sell dated

19.04.1993 was also executed by M.Subhaschandra
Bhakta in favour of firm.
6.	A Suit No. 5 of 2014 was filed by three

Plaintiffs (appellants) against six Defendants who
are Respondent Nos. 1 to 6 in this appeal praying for
permanent prohibitory in		junction restraining the

Defendants or anyone cl		aiming through them for

transferring or alienatin		g 'A' schedule property.

Further, the permanent prohibitory injunction was

sought against the Defendant regarding possession and JUDGMENT enjoyment of property by Plaintiff. The Defendant had filed I.A.No.IV under Section 8(1) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) on 09.05.2014, praying to pass an order referring the parties to the arbitration for adjudication of the disputes raised by the Plaintiff in the Suit. The application was not accompanied by Page 5 6 retirement deed and partnership deed.

7.		On 12.05.2014, the original retirement deed and

the partnership deed were produced by the Defendant along with the list. The counter affidavit to the application I.A. No. IV was also filed by the Plaintiff. The Learned District Judge heard the I.A.No.IV as well as the objections raised by the Plaintiff and by an order dated 27.05.2014, pass the following order:

“I.A.No. I		V filed under
Section 8(1) of t		he Arbitration and
Conciliation Act		, 1996 by the
defendants is all
	The parties to the suit are
referred to the Arbitration to
settle their disputes and
differences, in view of the
JUDGME<br>Arbitration Agreement.
	The suit of the plaintiffs
stands disposed off accordingly.”

8.		Learned Counsel appearing for appellants in

support of this appeal raised following submissions:

(i)		The application I.A.No.IV of 2014 praying for

referring the matter to arbitration was not accompanied by the original retirement deed dated Page 6 7 25.07.2005 and partnership deed dated 05.04.2006, hence the application was liable to be dismissed

under Section 8(2) and Learned District Judge

committed error in allowing the application.

According to Section 8(2) of the Act, it is mandatory

to file the original arbitration agreement or a duly

certified copy thereof along with the application
seeking reference to the arbitration.
(ii) All the parties to th	e suit were not parties to
the arbitration agreement	as claimed in retirement

deed and partnership deed.	Hence, dispute could not

have been refereed to the arbitrator.

(iii)		The firm being an unregistered firm, no

reference to the arbitration can be made with regard to the dispute relating to unregistered firm.

9.		Learned counsel appearing for respondents have

refuted the submissions and contends that Learned District Judge after considering all aspects of the matter have rightly made the reference to the arbitrator. It is submitted that there was clear Page 7 8 arbitration agreement in the retirement deed as well as in the partnership deed as has been noted by

District Judge and the suit could not have proceeded.

All the Plaintiffs as well as Defendant Nos. 1 to 4

and Defendant No. 5 were parties to the arbitration

agreement either personally or claiming through the

person who was party to the agreement. The Defendant

No. 6 has not inherited any right in the partnership
firm and was unnecessarily impleaded by the
Plaintiff. Mere presence o	f Defendant No.6 as one of

the Defendants does not p	reclude the implementation

of arbitration agreement.	With regard to nonfiling

of retirement deed and partnership deed along with

application I.A.No. IV of 2014, two submissions have JUDGMENT been raised. Firstly, it is contended that the Plaintiff themselves has filed both retirement deed and partnership deed along with the list of documents and having admitted both retirement deed and partnership deed, nonfiling along with the application I.A.No. IV was inconsequential. Secondly, the Defendant themselves immediately after three days Page 8 9 of filing their I.A.No. IV of 2014 had filed the original retirement deed and partnership deed on

12.05.2014 and at the time the matter was considered

by District Judge, original deeds were on the record.

Hence, the application I.A.No. IV was not liable to

be rejected on this ground. There is no such

provision which prohibits the adjudication of dispute

by arbitration regarding an unregistered partnership
firm.
10. We have considered t		he submissions of learned
		perused the records.
counsel for the parties and		perused the records.

11.	From the pleadings on records and submissions

made, following three issues arises for JUDGMENT consideration: (1) Whether nonfiling of either original or certified copy of retirement deed and partnership deed along with application I.A.No. IV dated 09.05.2014 entailed dismissal of the application as per section 8(2) of 1996 Act.

(2)		Whether the fact that all the parties to the

Page 9 10 suit being not parties to the retirement deed/partnership deed, the Court was not entitled to make the reference relying on arbitration agreement.

(3) Whether dispute pertaining to unregistered

partnership deed cannot be referred to an arbitration

despite there being arbitration agreement in the deed
of retirement/partnership deed.<br>ISSUE NO.(1)
12. Two facts which eme	rged from record in this

respect need to be noted.	Firstly, the plaintiffs in

their plaint of O.S.No. 5 of 2014 have referred to

and admitted the retirement deed dated 25.07.2005 and JUDGMENT partnership deed dated 05.04.2006 in para 5 of the plaint. The plaintiffs themselves have filed the photocopies of deed of retirement dated 25.07.2005 as the document no. 6 in the list and photocopies of partnership deed dated 05.04..2006 as document no. 7 as have been noted in para 23 of the District Judge judgment. Page 10 11

	Further, although initially the application

filed by Defendant I.A.No. IV dated 09.05.2014 was not accompanied by copy of retirement deed and partnership deed. The Defendant on 12.05.2014 filed the original retirement deed and partnership deed along with the list. It is useful to note the findings recorded by District Judge in the above context in paragraph 39 which is to the following effect:

"39. The materi	als on record
clearly goes to	show that I.A.No.
IV was filed by	the defendants on
09.05.2014. It i	s true that the
application was not accompanied by
the Retirement Deed and the
Partnership Deed either the
originals or the certified copies.
JUDGMENT<br>On 12.05.2014 the original
Retirement Deed and the
Partnership Deed were produced by
the defendants along with the
list."

13.	Section 8	which falls for consideration in the

present case provides as follows:

" 8. Power to refer parties to
arbitration where there is an
arbitration agreement
(1)		A judicial authority before

Page 11 12

which an action is brought in a<br>matter which is the subject of an<br>arbitration agreement shall, if a<br>party so applies not later than<br>when submitting his first<br>statement on the substance of the<br>dispute, refer the parties to<br>arbitration.<br>(2) The application referred to in<br>subsection (1) shall not be<br>entertained unless it is<br>accompanied by the original<br>arbitration agreement or a duly<br>certified copy thereof.<br>(3) Notwithstanding that an<br>application has been made under<br>subsection (1) and that the<br>issue is pending before the<br>judicial authority, an arbitration<br>may be commenced or continued and<br>an arbitral award made."
14.		The appellants submit that subsection (2) of

which an action is brought in a
matter which is the subject of an
arbitration agreement shall, if a
party so applies not later than
when submitting his first
statement on the substance of the
dispute, refer the parties to
arbitration.
(2)	The application referred to in
subsection (1) shall not be
entertained unless it is
accompanied by the original
arbitration agreement or a duly
certified copy thereof.
(3)	Notwithstanding that an
application has been made under<br>subsection (1) and that the
issue is pend<br>judicial authorit		ing before the<br>y, an arbitration
may be commenced
an arbitral award		made."

Section (8) provides that "the application referred JUDGMENT to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof." They submit that admittedly with the application I.A.No. IV filed on 09.05.2014, original or certified copy of the Retirement Deed and Partnership Deed was not filed.

15.		Learned Counsel to the appellants also placed

Page 12 13 reliance on a judgment of this court reported in 2008 (2) SCC 602, Atul Singh & Othes Vs. Sunil Kumar

Singh & Others.	In the above case, defendant had

moved a petition on 28.02.2005 praying for referring

the dispute to arbitration. The Trial Court had

dismissed the petition on the ground that the

predecessor in interest of the plaintiff was not

party to the Partnership Deed executed on 17.02.1992.
Hence the main relief being declaration of the deed
to be void which could hav		e been granted only by the

Civil Court, the dispute		could not be referred.

Defendant filed Civil Revi		sion which was allowed by

the High Court. One of the submissions made before

this court was that as per subsection (2) of Section JUDGMENT (8), the application could not have entertained unless it was accompanied by original arbitration agreement or duly certified copy thereof. This court held that there is no whisper in the petition that the original agreement or a duly certified copy is being filed. There was non compliance of Section 8(2). Hence the reference could not have been made. Page 13 14 Following was stated by this court in paragraph 19:

	" 19. There is no whisper in the
	petition dated 28.02.2005 that the
	original arbitration agreement or
	a duly certified copy thereof is
	being filed along with the
	application. Therefore, there was
	a clear noncompliance with
	subsection (2) of Section 8 of
	the 1996 Act which is a mandatory
	provision and the dispute could
	not have been referred to
	arbitration. Learned counsel for
	the respondent has submitted that
	a copy of partnership deed was on<br>the record of the case. However,
	in order to<br>requirement of s	satisfy the<br>ubsection (2) of
	Section 8 of the	Act, Defendant 3
	should have fil	ed the original
	arbitration agre	ement or a duly
	certified copy t	hereof along with
	the petition filed by him on
	28.02.2005, which he did not do.
	Therefore, no order for referring
	the dispute to arbitration could
	JUDGMENT<br>have been passed in the suit."

	It is relevant to note that in	Atul Singh's case

(Supra),	the submission of respondent was noticed

that the copy of the Partnership Deed was on the record of the case, but the Court has not proceeded to examine as to when such copies are already on record what is the effect. Page 14 15 16. In this context, the reference is made to

judgment of this Court in	2007 (7) SCC 737, Bharat

Sewa Sansthan Vs. U.P.Electronics Corporation Ltd.
	In the above case, two judge bench of this Court

has held that photocopies of lease agreement could be

taken on record under Section 8 for ascertaining the

existence of arbitration clause. Following was stated
in paragraph 24:<br>"24. The respondent Corporation<br>placed on record of the trial<br>court photocopies of the<br>agreements along with an<br>application under Section 8(1) of<br>the Arbitration Act. The High<br>Court, in our view, has rightly<br>held that the photocopies of the<br>lease agreements could be taken on<br>JUDGMENT<br>record under Section 8 of the<br>Arbitration Act for ascertaining<br>the existence of arbitration<br>clause. Thus, the dispute raised<br>by the appellant Sansthan against<br>the respondent Corporation in<br>terms of the arbitration clause<br>contained in the lease agreement<br>is arbitral."

Sewa Sansthan Vs. U.P.Electronics Corporation Ltd.

placed on recor	d of the trial
court photocop	ies of the
agreements alo	ng with an
application under	Section 8(1) of
the Arbitration Act. The High
Court, in our view, has rightly
held that the photocopies of the
lease agreements could be taken on
JUDGMENT<br>record under Section 8 of the
Arbitration Act for ascertaining
the existence of arbitration
clause. Thus, the dispute raised
by the appellant Sansthan against
the respondent Corporation in
terms of the arbitration clause
contained in the lease agreement
is arbitral."

	In the case of	Atul Singh (Supra),	which was

also a judgment of two Judge Bench, earlier judgment Page 15 16

in	Bharat Sewa Sansthan w	as not cited.		However, for

purposes of this case, we need not enter into the

issue as to whether there is a compliance of section

8(2) if photocopies of the arbitration agreement is

already on the record and not disputed by the
parties.
17.	There is one another aspect of the matter which

is sufficient to uphold the order of the District
Judge. Section 8(2) uses		the phrase "shall not be
entertained". Thus, what		is prohibited is the

entertainment of the a		pplication unless it is

accompanied by the original arbitration agreement or

a duly certified copy thereof.

18.		The word 'entertained' has specific meaning in

P. Ramanatha Aiyar's Advanced Law Lexicon	word

'entertained' has been defined as:

" 1. To bear in mind or consider,
esp, to give judicial
consideration to (the Court then
entertained motions for
continuance).
2.		To amuse or please.
3.		To receive(a person) as a
guest or provide hospitality to (a

Page 16 17

person).<br>The expression 'entertain'<br>means to 'admit a thing for<br>consideration' and when a suit or<br>proceeding is not thrown out in<br>limine but the Court receives it<br>for consideration and disposal<br>according to law it must be<br>regarded as entertaining the suit<br>or proceeding, no matter whatever<br>the ultimate decision might be."
	The		Blacks Law Dictionary			also defines this word
'entertain' as follows:<br>"To bear in mind or consider;esp.,<br>to give judicial consideration to<br><the court then entertained<br>motions for continuance>"
"To bear in mind<br>to give judicial<br><the court t<br>motions for conti				"To bear in mind<br>to give judicial	or consider;esp.,<br>consideration to
				<the court t
				motions for conti	nuance		>"
19.	In	1971 (3) SCC 124, Hindusthan Commercial Bank

person).
	The expression 'entertain'
means to 'admit a thing for
consideration' and when a suit or
proceeding is not thrown out in
limine		but the Court receives it
for consideration and disposal
according to law it must be
regarded as entertaining the suit
or proceeding, no matter whatever
the ultimate decision might be."

Ltd. Vs. Punnu Sahu (Dead) through Legal

J<br>Representatives,	UDGMENT<br>the word 'entertained' came for

consideration as occurring in Order 21, Rule 90, Proviso of Civil procedure Court. Para 2 of the Judgment notices the amended Proviso which was to the following effect:

"2.		The amended proviso with which
we are concerned in this appeal
reads thus:
'Provided that no application to
set aside a sale shall be

Page 17 18

entertained
(a) upon any ground which could
have been taken by the applicant
on or before the date on which the
sale proclamation was drawn up;
and
(b) Unless the applicant deposits
such amount not exceeding twelve
and half percent of the sum
realised by the sale or furnishes
such security as the Court may, in
its discretion, fix except when
the Court for reasons to be
recorded dispense with the
requirements of this clause:
Provided further that no sale<br>shall be set aside on the ground
of irregularity<br>upon the facts pr	or fraud unless<br>oved the Court is
satisfied that t	he applicant has
sustained substa	ntial injury by
reason of such	irregularity or

	The contention of the appellant was that word

JUDGMENT 'entertain' refers to initiation of the proceedings and not to the stage when the Court takes up the application for consideration. The High Court had rejected the said contention. The above view of the High Court was approved by this court in paragraph 4 of the judgment. Following was stated:

"	4.		Before the High Court it was
contended on behalf of the
appellant and that contention was

Page 18 19

repeated in this court, that
Clause (b) of the proviso did not
govern the present proceedings as
the application in question had
been filed several months before
that clause was added to the
proviso. It is the contention of
the appellant that the expression
'entertain' found in the proviso
refers to the initiation of the
proceedings and not to the sage
when the Court takes up the
application for consideration.
This contention was rejected by
the High Court relying on the
decision of that Court in Kundan<br>Lal Vs. Jagan Nath Sharma, AIR
1962 All 547.<br>been taken by th			The sameview had<br>e said High Court
in Dhoom Chand J			ain V. Chamanlal
Gupta, AIR 1962			All 543	and	Haji
Rahim Bux and			Sons V. Firm
Samiullah and So			ns, AIR 1963 All
320	and again in		Mahavir Singh V.
Gauri Shankar, AIR 1964 All 289.
These decisions have interpreted
the expression 'entertain' as
JUDGMENT<br>meaning 'adjudicate upon' or
'proceed to consider on merits'.
This view of the High Court has
been accepted as correct by this
Court in		Lakshmiratan Engineering
Works Ltd. V. Asst. Comm., Sales
tax, Kanpur, AIR 1968 SC 488.						We
are bound by that decision and as
such we are unable to accept the
contention of the appellant that
Clause (b) of the proviso did not
apply to the present proceedings."

20.		Another relevant judgment is	1998 (1) SCC 732,

Page 19 20 Martin and Harris Ltd. Vs. VIth Additional District

Judge and others.	In the above case Section 21(1)

proviso of U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (13 of 1972) word 'entertained' came for consideration. The proviso to Section 21(1) was to the following effect:

" 8.		Provided that where the
building was in the occupation of
a tenant since before its purchase<br>by the landlord, such purchase
being made after<br>of the Act, no			the commencement<br>application shall
be entertained			on the grounds,
mentioned in cl			ause(a) unless a
period of three			years has elapsed
since the date			of such purchase
and the landlord has given a
notice in that behalf to the
tenant not less than six months
before such application, and such
JUDGMENT<br>notice may be given even before
the expiration of the aforesaid
period of three years."

	In the above case, the application under Section

21(1) was filed by the landlord before expiry of period of three years from the date of purchase. It was held by this Court that word 'entertained' as employed in first proviso under Section 21(1) could Page 20 21 not mean 'institution' of such proceedings. In Para 9 and 10, following was laid down:

	"9.		Even that apart there is an
	internal indication in the first
	proviso to Section 21(1) that the
	legislature has made a clear
	distinction between 'entertaining'
	of an application for possession
	under Section 21(1)(a) of the Act
	and 'filing' of such application.
	So far as the filing of such
	application is concerned it is
	clearly indicated by the
	legislature that such application<br>cannot be filed before expiry of
	six months from<br>notice is given b			the date on which<br>y the landlord to
	the tenant seeki			ng eviction under
	Section 21(1)(a)			of the Act. The
	words, "the land			lord has given a
	notice in that			behalf to the
	tenant not less than six months
	before such application", would
	naturally mean that before filing
	of such application or moving of
	JUDGMENT<br>such application before the
	prescribed authority notice must
	have preceded by at least six
	months. Similar terminology is not
	employed by the legislature in the
	very same proviso so far as three
	years' period for entertaining
	such application on the grounds
	mentioned in clause (a) of Section
	21(1) a stage must be reached when
	the court applied its judicial
	mind and takes up the case for
	decision on merits concerning the
	grounds for possession mentioned
	in clause (a) of Section 21(1) of

Page 21 22

the Act. Consequently on the very
scheme of this Act it cannot be
said that the word 'entertain' as
employed by the legislature in the
first proviso to Section 21(1) of
the Act would at least mean taking
cognizance of such an application
by the prescribed authority by
issuing summons for appearance to
the tenantdefendant. It must be
held that on the contrary the term
'entertain' would only show that
by the time the application for
possession on the grounds
mentioned in clause (a) of Section
21(1) is taken up by the<br>prescribed authority for
consideration on<br>minimum three yea	merits, atleast<br>rs' period should
have elapsed si	nce the date of
purchase of the	premises by the
landlord.

10.		Leaned Senior Counsel, Shri
Rao, for the appellant then
invited our attention to two
decisions of this Court in the
JUDGMENT<br>case of Lakshmiratan Engineering
Works Ltd. V. Asstt. Commr.
(Judicial) I, Sales Tax and
Hindusthan Commercial bank Ltd V.
Punnu Sahu. In Lakshmiratan
Engineering this Court was
concerned with the meaning of the
word 'entertain' mentioned in the
proviso to Section 9 of the
U.P. Sales Tax Act, 1948.
Hidayatullah,J., speaking for the
Court observed in the light of the
statutory scheme of Section 9 of
the said Act that the direction to
the Court in the proviso to

Page 22 23

	Section 9 was to the effect that
	the Court shall not proceed to
	admit to consideration an appeal
	which is not accompanied by
	satisfactory proof of the payment
	of the admitted tax. In the case
	of Hindusthan Commercial Bank the
	term 'entertain' as found in the
	proviso to Order XXI Rule 90 Code
	of Civil Procedure(CPC) fell for
	consideration of the Court.
	Hegde,J., speaking for a Bench of
	two learned Judges of this Court
	in this connection observed that
	the term 'entertain' in the said
	provision means 'to adjudicate<br>upon' or 'to proceed to consider
	on merits' and<br>'initiation of p	did not mean<br>roceeding '. The
	aforesaid decisio	ns, in our view,
	clearly show	that when the
	question of	entertaining an
	application for g	iving relief to a
	party arises and when such
	application is based on any
	grounds on which such application
	has to be considered, the
	JUDGMENT<br>provision regarding 'entertaining
	such application' on any of these
	grounds would necessarily mean the
	consideration of the application
	on the merits of the grounds on
	which it is base. In the present
	case, therefore, it must be held
	that when the legislature has
	provided that no application under
	Section 21(1)(a) of the Act shall
	be entertained by the prescribed
	authority on grounds mentioned in
	clause (a) of Section 21(1) of the
	Act before expiry of three years
	from date of purchase of property

Page 23 24

by the landlord it must<br>necessarily mean consideration by<br>the prescribed authority of the<br>grounds mentioned in clause (a) of<br>Section 21(1) of the Act on<br>merits."
21.	In the present case as noted above, the original

Retirement Deed and Partnership Deed were filed by

the defendants on 12th May and it is only after

filing of original deeds that Court proceeded to
decide the application I.A.No. IV.

22. Section 8(2) has to b		e interpreted to mean that

the court shall not consid		er any application filed by

the party under Section 8(1) unless it is accompanied

by the landlord it must
necessarily mean consideration by
the prescribed authority of the
grounds mentioned in clause (a) of
Section 21(1) of the Act on
merits.	"

by original arbitration agreement or duly certified JUDGMENT copy thereof. The filing of the application without such original or certified copy, but bringing original arbitration agreement on record at the time when the Court is considering the application shall not entail rejection of the application under Section 8(2).

23.		In the present case it is relevant to note the

Page 24 25 Retirement Deed and Partnership Deed have also been relied by the plaintiffs. Hence, the argument of

plaintiffs that defendants' application I.A.No. IV

was not accompanied by original deeds, hence, liable

to be rejected, cannot be accepted. We are thus of

the view that the appellants submission that the

application of defendants under Section 8 was liable
to be rejected, cannot be accepted.<br>ISSUE NO. 2
24. The relevant facts an	d pleadings of the parties

have been marshaled by th	e trial court. Trial Court

has returned the findings that the plaintiff no. 1

represented by his mother	and next friend was	party

JUDGMENT to the Retirement Deed. The mother of plaintiff namely Smt. Usha A. Bhakta has signed the retirement deed for self and on behalf of her minor children, the plaintiff No. 1. Plaintiff No. 2 and 3 claiming their rights through one of the partners Shri Gangadhar Bhakta, their father, who was party to the retirement deed. In paragraph 23 of the judgment, Learned District Judge had returned the following Page 25 26 findings:

"...therefore, the plaintiff no. 1<br>represented by his mother and next<br>friend Smt. Usha A. Bhakta is a<br>party to the Retirement Deed and<br>plaintiffs 2 and 3 are claiming<br>their rights through one of the<br>partner late Shri Gangadhar Bhakta,<br>who was also a party to the<br>Retirement Deed. The Defendants 1<br>to 5 are also the parties to this<br>Retirement Deed. Therefore, except<br>defendant No. 6 all others are<br>either personally or through the<br>persons from whom they are claiming<br>the right are parties to the Deed<br>of Retirement Deed dated<br>25.07.2005..."
	Thus it was only def	endant no. 6 who was not

party to the retirement deed or partnership deed.

Both 5th and 6th defendants are issues of late M. JUDGMENT Prakashchandra Bhakta.

25.		Learned Counsel for the respondents have

submitted that it was case of the plaintiffs themselves that by virtue of Will executed by M.Prakashchandra Bhakta it was only defendant no. 5 who became entitled to benefits of partnership and defendant no. 6 was not given any share. Page 26 27

26.		The plaintiffs admittedly are parties to the

arbitration agreement as noted above. It does not lie


in their mouth to contend that since one of the

defendants whom they have impleaded was not party to

the arbitration agreement, no reference can be made

to the arbitrator. In the facts of the present case,

it cannot be said that merely because one of the

defendants i.e. defendant no. 6 was not party to the
arbitration agreement, t	he dispute between the
parties which essentially	relates to the benefits

arising out of Retirement	Deed and Partnership deed
cannot be referred.

27.		Learned District Judge has noted that defendant

no.6 has not inherited any share either in Partnership deed or in the schedule property and hence there is no question of bifurcation of either cause of action or parties. Relevant findings in this context have been returned by District Judge in paragraph 40 to the following effect:

“	40...It is only defendant No. 6 was
not the party to either the

Page 27 28

	Retirement Deed or the Partnership
	Deed where there is an Arbitration
	Clause to refer all the disputes and
	differences to the Arbitration. Even
	according to the plaintiffs
	defendant No. 6 is not a Partner nor
	she is a party to any of the
	documents and further as per the
	Will executed by her father late
	Shri Prakash Chandra Baktha, she has
	not inherited any right or share
	either in the Partnership Deed or in
	the Schedule property. Moreover, the
	Plaint schedule property according
	to the plaintiffs is the property of
	the Partnership Firm M/s. 'Neo<br>Subhash Beedi Works'. Therefore,
	there is no ques<br>of either cause o	tion of bifurcation<br>f action or parties
	if the same is to	be referred to the
	Arbitration as p	er the Arbitration
	Clause formed in	the Retirement Deed
	dated: 25.07.2	005 and the
	Partnership Deed dated
	05.04.2006...”

	JUDGMENT<br>We fully endorse the above view taken by Learned

District Judge. ISSUE NO. 3

28.		The submission by the petitioner is that

partnership being an unregistered partnership, no reference can be made to the arbitration. In the present case there is no dispute between the parties Page 28 29 that both Retirement deed and Partnership deed contain an arbitration clause. In Retirement deed

which had been signed by retiring partners,

continuing partners and concurring partners,
following was stated in clause 8:<br>“...In case of any dispute or<br>difference arising between the<br>parties, regarding the<br>interpretation of the contents of<br>this Deed of Retirement or any other<br>matter or transactions touching the<br>said retirement, it shall be<br>referred to an arbitration under the<br>provisions of the Arbitration &<br>Conciliation Act, 1996...”
Further, in partne	rship deed which was

05.04.2006, clause 26 contains an arbitration clause

“	...In case of any dispute or
difference arising between the
parties, regarding the
interpretation of the contents of
this Deed of Retirement or any other
matter or transactions touching the<br>said retirement, it shall be
referred to an ar<br>provisions of t		bitration under the<br>he Arbitration &

which is to the following effect: JUDGMENT

“	26.			ALL DISPUTES arising
between the partners or their legal
representatives about the
interpretation of this Deed or their
rights and liabilities there under
or in relation to any other matters
whatsoever touching the partnership
affairs shall be decided by an
Arbitration as provided by the
Arbitration & Conciliation Act,
1996.”

Page 29 30

		When the partners and those who claim

through partners agreed to get the dispute settled by

arbitration, it is not open for the appellants to

contend that partnership being unregistered
partnership, the dispute cannot be referred.
29.	The petitioners have not been able to show any

statutory provision either in 1996 Act or in any

other statute from which it can be said that dispute
concerning unregistered p		artnership deed cannot be
referred to arbitration.		We thus do not find any

substance in the third subm		ission of the appellant.

30.		In the result, we do not find any merit in this

appeal which is accordingly dismissed. JUDGMENT ...........................J. (R.K. AGRAWAL) ...........................J. (ASHOK BHUSHAN) NEW DELHI, NOVEMBER 15, 2016. Page 30 31 JUDGMENT Page 31