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

Full Judgment Text

1 REPORTABLE Corrected 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,

Signature Not Verified Mangalore in Original Suit No. 5 of 2014 filed by the Digitally signed by SANJAY KUMAR Date: 2017.07.12 10:11:16 IST Reason: appellants/plaintiffs. In the Suit, I.A. No. IV was 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 settle the dispute as per arbitration agreement. The High Court vide 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 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

	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.

(ii) M. Narsimha Bhakta retired from the firm as per the release deed dated 30.06.1986 and the remaining partners continued with the firm. (iii) M.Prakashchandra Bhakta died on 20.03.1995 and as per his Will, his minor son Master M. Vinayaka Bhakta was admitted to the 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 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 entered between late M. Gangadhar Bhakta, M. Vinayaka Bhakta, Defendant No. 5 and M. Vipin Bhakta(S/o late M. Ganesh Bhakta) and Master

M. Anantesh		Bhakta,1	st	Plaintiff.

M.Gangadhar Bhakta		expired and his estate is

represented by the		Plaintiff Nos. 2 & 3.

4.		The suit for partition was filed by M.

Prakaschandra Bhakta and others against M. Subhaschandra Bhakta and others, being O.S. NO. 4 of 1985. The preliminary decree was passed on 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. 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 injunction restraining the Defendants or anyone claiming through them for transferring or alienating 'A' schedule property. Further, the permanent prohibitory injunction was sought against the Defendant regarding possession and 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 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, passed the following order:

	“	I.A.No. IV filed under
Section 8(1) of the Arbitration and
Conciliation Act, 1996 by the
defendants is allowed.
	The parties to the suit are
referred to the Arbitration to
settle their disputes and
differences, in view of the
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 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 the 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 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 of Defendant No.6 as one of the Defendants does not preclude 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 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 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 the submissions of learned

counsel for the parties and perused the records.

11.		From the pleadings on records and submissions

made, following three issues arises for 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

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. ISSUE NO.(1) 12. Two facts which emerged 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 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. 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 materials on record
clearly goes to show that I.A.No.
IV was filed by the defendants on
09.05.2014. It is true that the
application was not accompanied by
the Retirement Deed and the
Partnership Deed either the
originals or the certified copies.
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

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
subsection (1) and that the
issue is pending before the
judicial authority, an arbitration
may be commenced or continued and
an arbitral award made."

14.		The appellants submit that subsection (2) of

Section (8) provides that "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." 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

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 have been granted only by the Civil Court, the dispute could not be referred. Defendant filed Civil Revision which was allowed by the High Court. One of the submissions made before this court was that as per subsection (2) of Section (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. 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
the record of the case. However,
in order to satisfy the
requirement of subsection (2) of
Section 8 of the Act, Defendant 3
should have filed the original
arbitration agreement or a duly
certified copy thereof 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
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. 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:

"	24.		The respondent Corporation
placed on record of the trial
court photocopies of the
agreements along 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
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 16

in	Bharat Sewa Sansthan	was 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 application 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

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."

	The	Blacks Law Dictionary	also defines this word

'entertain' as follows:

"	To bear in mind or consider;esp.,
to give judicial consideration to
<the court then entertained
motions for continuance		>"

19.		In	1971 (3) SCC 124, Hindusthan Commercial Bank

Ltd. Vs. Punnu Sahu (Dead) through Legal

Representatives,	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

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
shall be set aside on the ground
of irregularity or fraud unless
upon the facts proved the Court is
satisfied that the applicant has
sustained substantial injury by
reason of such irregularity or
fraud."

	The contention of the appellant was that word

'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

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
Lal Vs. Jagan Nath Sharma,									AIR
1962 All 547.				The sameview had
been taken by the said High Court
in	Dhoom Chand Jain V. Chamanlal
Gupta, AIR 1962 All 543						and		Haji
Rahim Bux and Sons V. Firm
Samiullah and Sons, AIR 1963 All
320		and again in			Mahavir Singh V.
Gauri Shankar, AIR 1964 All 289.
These decisions have interpreted
the expression 'entertain' as
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,

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
by the landlord, such purchase
being made after the commencement
of the Act, no application shall
be entertained on the grounds,
mentioned in clause(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
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 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
cannot be filed before expiry of
six months from the date on which
notice is given by the landlord to
the tenant seeking eviction under
Section 21(1)(a) of the Act. The
words, "the landlord 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
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

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
prescribed authority for
consideration on merits, atleast
minimum three years' period should
have elapsed since 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
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

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 upon' or 'to proceed to consider on merits' and did not mean 'initiation of proceeding '. The aforesaid decisions, in our view, clearly show that when the question of entertaining an application for giving relief to a party arises and when such application is based on any grounds on which such application has to be considered, the 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 24

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.	"

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 be interpreted to mean that

the court shall not consider any application filed by the party under Section 8(1) unless it is accompanied by original arbitration agreement or duly certified 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

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.

ISSUE NO. 2

24.		The relevant facts and pleadings of the parties

have been marshaled by the trial court. Trial Court has returned the findings that the plaintiff no. 1

represented by his mother	and next friend was	party

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 26 findings:

"...therefore, the plaintiff no. 1
represented by his mother and next
friend Smt. Usha A. Bhakta is a
party to the Retirement Deed and
plaintiffs 2 and 3 are claiming
their rights through one of the
partner late Shri Gangadhar Bhakta,
who was also a party to the
Retirement Deed. The Defendants 1
to 5 are also the parties to this
Retirement Deed. Therefore, except
defendant No. 6 all others are
either personally or through the
persons from whom they are claiming
the right are parties to the Deed
of Retirement Deed dated
25.07.2005..."

	Thus it was only defendant no. 6 who was not

party to the retirement deed or partnership deed. Both 5th and 6th defendants are issues of late M. 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. 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, the 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 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
Subhash Beedi Works'. Therefore,
there is no question of bifurcation
of either cause of action or parties
if the same is to be referred to the
Arbitration as per the Arbitration
Clause formed in the Retirement Deed
dated: 25.07.2005 and the
Partnership Deed dated
05.04.2006...”

	We fully endorse the above view taken by Learned

District Judge. ISSUE NO. 3

28.		The submission by the appellants 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 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:

“...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
said retirement, it shall be
referred to an arbitration under the
provisions of the Arbitration &
Conciliation Act, 1996...”

	Further, in partnership deed which was

05.04.2006, clause 26 contains an arbitration clause which is to the following effect:

“ 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.”

		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 appellants 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 partnership deed cannot be referred to arbitration. We thus do not find any substance in the third submission of the appellant.

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

appeal which is accordingly dismissed. ...........................J. (R.K. AGRAWAL) ...........................J. (ASHOK BHUSHAN) NEW DELHI, NOVEMBER 15, 2016. 31 ITEM NO.1A COURT NO.11 SECTION IVA (For Judgment) S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No.31179/2014 (Arising out of impugned final judgment and order dated 08/07/2014 in CRP No.219/2014 passed by the High Court Of Karnataka At Bangalore) ANANTHESH BHAKTA REPTD. BY MOTER USHA A BHAKTA AND ORS. Petitioners VERSUS NAYANA S. BHAKTA AND ORS Respondents (With interim relief and office report) Date : 15/11/2016 This petition was called on for pronouncement of judgment today. For Petitioner(s) Ms. Anjana Chandrashekar,Adv. For Respondent(s) Mr. V. N. Raghupathy,Adv. Mr. Parikshit P. Angadi, Adv. Mr. P.S. Nerwal, Adv. Hon'ble Mr. Justice Ashok Bhushan pronounced the reportable Judgment of the Bench comprising of Hon'ble Mr. Justice R. K. Agrawal and His Lordship. Leave granted. The appeal is dismissed in terms of the signed reportable judgment. Pending interlocutory applications, if any, stand disposed of. (Sanjay Kumar-II) (Indu Pokhriyal) Court Master Court Master (Signed reportable Judgment is placed on the file)