Full Judgment Text
2026:BHC-NAG:5240
14.AA 204.279 Judgment.odt
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
ARBITRATION APPEAL NO.204 OF 2025
APPLICANT
:- Aditya Anagha Multistate Credit Co
Operative Society Ltd,
through its Authorized Managing Director
Mr. Samir Suresh Saraf, Aged about 43
years, Off. At – 425, Azamshah Layout,
Anand Nagar, Nagpur – 440009.
(Org. Deft. No.4)
(On RA.)
..VERSUS..
:- 1)
Anil S/ Late Onkardas Rathi, Aged about
61 years, occupation C.A., R/o 201, Park
Regency, Opp. Tilak Vidyalaya, Dhantoli,
Nagpur-440012.
NON-
APPLICANTS
(Org. Plaintiff)
ON RA
2)
Shri Vishwas s/o Sudhakar Chaknalwar,
ON RA
aged about 61 years, occ. Business, Flat
No.801, Royal Park, Near Nagpur –
440010.
(Org. Deft. No.1)
3)
M/s Pyramid Realtors, A Partnership Firm,
ON RA
having its office at 5, software Technology
Park Line Road, Sadar, Nagpur, through
Partner Mr. Prashant Babasaheb Wasade,
Rio. G-2, Himalaya Paradise, GPO Square,
Civil Lines, Nagpur.
(Org. Deft. No.2)
4)
The Central Registrar of Co-operative
ON RA
Societies, Ministry of Cooperation,
Government of India, Atal Akshay Urja
Bhawan, Lodhi Road, CGO complex New
Delhi – 110003.
(Org. Deft. No.3)
------------------------------------------------------------------------------------------------------------------------------------
Mr. Prakash Naidu, Advocate for Appellant.
Mr. Y.J. Maheshwari, Advocate for respondent No.1.
Mr. M.P. Khajanchi, Advocate for Respondent No.2.
------------------------------------------------------------------------------------------------------------
14.AA 204.279 Judgment.odt
2
WITH
ARBITRATION APPEAL NO.279 OF 2025
APPELLANT
:- Vishwas s/o Sudhakar Chaknalwar Aged
(Original Defendant No.1)
about 61 years, occ. Business, Flat
No.801, Royal Park, Near Dagdi Park,
Ramdaspeth, Nagpur – 440010.
..VERSUS..
:- 1)
Anil S/ Late Onkardas Rathi, Aged 62 yrs,
occ. C.A., R/o 201, Park Regency, Opp.
Tilak Vidyalaya, Dhantoli,
Nagpur-440012.
RESPONDENTS
(Respondent No.1 Original
Plaintiff)
2)
M/s. Pyramid Realtors, A Partnership
Defendant Nos.2 to 4)
Firm, having its office at 5, Software
Technology Park Line Road, Sadar,
Nagpur, through Partner Mr. Prashant
Babasaheb Wasade, R/o G-12, Himalaya
Paradise, GPO Square, Civil Lines,
Nagpur.
(Respondent Nos.2 to 4 Original
3)
The Central Registrar of Co-operative
Societies, Ministry of Cooperation,
Government of India, Atal Akshay Urja
Bhawan, Lodhi Road, CGO complex
New Delhi – 110003.
4)
Aditya Anagha Multistate Credit Co-
operative Society Ltd. Through its
Managing Director Mr. Samir Suresh
Saraf, Aged about 43 Yrs. Off At 425,
Azamshah Layout, Anand Nagar, Nagpur
440009.
------------------------------------------------------------------------------------------------------------------------------------
Mr. M.P. Khajanchi, Advocate for Appellant.
Mr. Y.J. Maheshwari, Advocate for respondent No.1.
Mr. Prakash Naidu, Advocate for respondent No.4.
------------------------------------------------------------------------------------------------------------
14.AA 204.279 Judgment.odt
3
CORAM : ROHIT W. JOSHI, J.
DATE : 30/03/2026
JUDGMENT :
1. T he present appeals are preferred under Section 37 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A
& C Act, 1996”) in order to challenge order dated 13.10.2025
th
passed by the learned 4 Joint Civil Judge Senior Division, Nagpur,
on applications at Exhibits 10 and 13 filed by the appellants in
Arbitration Appeal No.279 of 2025 and Arbitration Appeal
No.204 of 2025, respectively, under Section 8 of the A & C Act,
1996 for referring the subject matter of the said suit for arbitration.
Both these appeals arise out of identical facts and give rise to the
same question of law and therefore they are being decided together
by a common judgment.
2. The respondent No.1 has filed a suit, being Special Civil
Suit No.1069 of 2024, inter alia claiming declaration that Exchange
Deed dated 11.11.2020 executed by the defendant No.1 (Appellant
in Arbitration No.279 of 2025) in favour of defendant No.4
(Appellant in Arbitration No.204 of 2025) is an outcome of fraud
and is illegal, null and void and for cancellation of the same. In this
suit, the defendant Nos.1 and 4 had filed separate applications vide
14.AA 204.279 Judgment.odt
4
Exhibits 10 and 13, respectively, for reference of the dispute to
arbitration.
3. The parties will be referred as plaintiff and defendants.
The plaintiff, defendant No.1 and four other individuals are
partners in the defendant No.2-partnership firm. The partners had
executed a Partnership Deed dated 01.04.2019. Clause 12(c) of the
Partnership Deed provides that, the partners shall execute
authorization in favour appellant/defendant No.1 (partner No.6
and respondent No.1/plaintiff (partner No.5), authorizing them to
sell the properties enumerated in Schedule I and II of the
Partnership Deed. The suit property bearing Khasra No.292 of
village Chinchbhavan, Tah. and Dist. Nagpur, is included at
Schedule II (ii) of the said Partnership Deed.
4. Thereafter, the partners, including plaintiff and
defendant No.1 executed another Partnership Deed dated
30.06.2021. Clause 8(b) of the Partnership Deed dated 30.06.2021
records that partner No.6 i.e. defendant No.1, shall have exclusive
rights to sell and deal with properties described in Schedule II and
shall be entitled for entire profit from the sale of the said properties.
The suit property is included at Schedule II (ii) of the said
Partnership Deed dated 30.06.2021.
14.AA 204.279 Judgment.odt
5
5. The defendant No.1 has executed a registered Exchange
Deed with respect to the suit property in favour of the defendant
No.4. The plaintiff has filed aforesaid suit challenging the said
transaction. The defendant Nos.1 and 4 had filed two separate
applications for reference of the dispute forming subject matter of
the suit for arbitration, in view of the arbitration clauses
incorporated in Paragraphs 13 and 14 of the Partnership Deeds
dated 01.04.2019 and 30.06.2021, respectively.
6. These applications were opposed by the plaintiff on the
ground that the defendant No.4 is not a party to the arbitration
agreement which is contained in the Partnership Deeds between the
plaintiff, defendant No.1 and four other partners.
7. The learned trial Court has rejected the applications on
the ground that a separate arbitral proceeding with respect to the
same firm is pending between all the partners of the partnership
firm.
8. The reason recorded by the learned trial Court for
making reference is clearly unsustainable. In fairness, the learned
Advocate for the plaintiff does not seriously support the order for
the reasons recorded. However, the learned Advocate for the
plaintiff vociferously supports the conclusion arrived at by the
14.AA 204.279 Judgment.odt
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learned trial Court, albeit on a different ground, namely, that the
defendant No.4 is not party to the arbitration appeal. The
contention of Mr. Yash Maheshwari, learned Advocate for the
plaintiff is that the defendant No.4 is in no way related to the
partnership firm and merely because he has entered into a
transaction with respect to the property of the firm, he cannot
invoke arbitration clause incorporated in the Partnership Deed,
which is for resolution of dispute only inter se between the partners.
Mr. Maheshwari, also draws attention to the Exchange Deed and
contends that the Exchange Deed is not executed by the defendant
No.1/partner No.6 alone, but same is executed in the name of the
partnership firm.
9. Mr. Khajanchi, learned Advocate for the respondent
No.2/original defendant No.1, however, draws attention to Section
8 (1) of the A & C Act, 1996 and contends that reference of dispute
is contemplated under the said provision, not only in cases where
the suit is between parties to an arbitration agreement, but also in
cases where the suit is between such parties and / or any person
claiming through or under party to arbitration agreement. Mr.
Khajanchi, draws attention to the aforesaid clauses 12(c) and 8(b) of
the two partnership deeds which enable the defendant No.1 to deal
14.AA 204.279 Judgment.odt
7
with the suit property and to retain consideration arising from the
transaction with respect to the suit property has acquired the suit
property in exchange from the defendant No.1 and as such the
defendant No.4 claims right. He contends that the defendant No.4
is claiming through defendant No.1, who is admittedly party to the
arbitration agreement. The Advocate for the defendant No.4
advances arguments on similar lines.
10. Pendency of arbitration proceedings between all six
partners of the firm could not be a reason for rejecting the
application for reference under Section 8 of the A & C Act, 1996.
However, it needs to be seen as to whether the defendant No.4, who
is admittedly not a partner in the firm can be a party to arbitration
proceeding arising out of arbitration clause incorporated in the
Partnership Deeds. In the considered opinion of this Court, the
defendant No.4 will answer the description of a person claiming
through or under a party to the arbitration agreement, namely the
defendant No.1, since he has acquired one of the properties of the
firm through its partner, the defendant No.1. Though the
transaction was entered into in the name of the firm, provisions of
Clauses 12(c) and 8(b) of the Partnership Deeds dated 01.04.2019
and 30.06.2021 cannot be ignored. Whether the Exchange Deeds
14.AA 204.279 Judgment.odt
8
are legal or valid is a matter for the arbitral tribunal to decide.
11. The defendant No.4 claims title over the suit property
through the defendant No.1. The dispute between partners is as to
whether defendant No.1 was competent to transfer the suit property
unilaterally as is done by him. The question to be answered relates
to authority of the defendant No.1 to deal with suit property as per
the terms of partnership deed. This is the basic dispute. The
defendant No.4 who claims title over the suit property on the basis
of exchange deed executed by defendant No.1 claims his right
through the defendant No.1. The defendant No.4 is thus a person
claiming through defendant No.1.
12. Mr. Khajanchi, is right in placing reliance on judgment of
the Hon’ble Supreme Court in the case of Rashtriya Ispat Nigam
1
Ltd and another ..vs.. Verma Transport Co. , which deals with
distinction between the erstwhile Section 34 of the Arbitration Act,
1940 and Section 8 of the A & C Act, 1996 and holds that under
the earlier Act, it was a matter of discretion of the Court to refer the
parties to the arbitration, however, under the new regime, it is
mandatory for the Court to make a reference if Section 8 is
attracted. For the reasons recorded above, the arbitration appeals are
allowed in the following terms :-
1 (2006) 7 SCC 275
14.AA 204.279 Judgment.odt
9
th
i) Orders dated 13.10.2025 passed by the learned 4 Joint
Civil Judge Senior Division, Nagpur, on applications at
Exhibits 10 and 13, in Special Civil Suit No.1069 of
2024, are quashed and set aside and the said applications
are allowed.
ii) Parties to bear their own costs.
(ROHIT W. JOSHI, J.)
C.L. Dhakate
14.AA 204.279 Judgment.odt
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
ARBITRATION APPEAL NO.204 OF 2025
APPLICANT
:- Aditya Anagha Multistate Credit Co
Operative Society Ltd,
through its Authorized Managing Director
Mr. Samir Suresh Saraf, Aged about 43
years, Off. At – 425, Azamshah Layout,
Anand Nagar, Nagpur – 440009.
(Org. Deft. No.4)
(On RA.)
..VERSUS..
:- 1)
Anil S/ Late Onkardas Rathi, Aged about
61 years, occupation C.A., R/o 201, Park
Regency, Opp. Tilak Vidyalaya, Dhantoli,
Nagpur-440012.
NON-
APPLICANTS
(Org. Plaintiff)
ON RA
2)
Shri Vishwas s/o Sudhakar Chaknalwar,
ON RA
aged about 61 years, occ. Business, Flat
No.801, Royal Park, Near Nagpur –
440010.
(Org. Deft. No.1)
3)
M/s Pyramid Realtors, A Partnership Firm,
ON RA
having its office at 5, software Technology
Park Line Road, Sadar, Nagpur, through
Partner Mr. Prashant Babasaheb Wasade,
Rio. G-2, Himalaya Paradise, GPO Square,
Civil Lines, Nagpur.
(Org. Deft. No.2)
4)
The Central Registrar of Co-operative
ON RA
Societies, Ministry of Cooperation,
Government of India, Atal Akshay Urja
Bhawan, Lodhi Road, CGO complex New
Delhi – 110003.
(Org. Deft. No.3)
------------------------------------------------------------------------------------------------------------------------------------
Mr. Prakash Naidu, Advocate for Appellant.
Mr. Y.J. Maheshwari, Advocate for respondent No.1.
Mr. M.P. Khajanchi, Advocate for Respondent No.2.
------------------------------------------------------------------------------------------------------------
14.AA 204.279 Judgment.odt
2
WITH
ARBITRATION APPEAL NO.279 OF 2025
APPELLANT
:- Vishwas s/o Sudhakar Chaknalwar Aged
(Original Defendant No.1)
about 61 years, occ. Business, Flat
No.801, Royal Park, Near Dagdi Park,
Ramdaspeth, Nagpur – 440010.
..VERSUS..
:- 1)
Anil S/ Late Onkardas Rathi, Aged 62 yrs,
occ. C.A., R/o 201, Park Regency, Opp.
Tilak Vidyalaya, Dhantoli,
Nagpur-440012.
RESPONDENTS
(Respondent No.1 Original
Plaintiff)
2)
M/s. Pyramid Realtors, A Partnership
Defendant Nos.2 to 4)
Firm, having its office at 5, Software
Technology Park Line Road, Sadar,
Nagpur, through Partner Mr. Prashant
Babasaheb Wasade, R/o G-12, Himalaya
Paradise, GPO Square, Civil Lines,
Nagpur.
(Respondent Nos.2 to 4 Original
3)
The Central Registrar of Co-operative
Societies, Ministry of Cooperation,
Government of India, Atal Akshay Urja
Bhawan, Lodhi Road, CGO complex
New Delhi – 110003.
4)
Aditya Anagha Multistate Credit Co-
operative Society Ltd. Through its
Managing Director Mr. Samir Suresh
Saraf, Aged about 43 Yrs. Off At 425,
Azamshah Layout, Anand Nagar, Nagpur
440009.
------------------------------------------------------------------------------------------------------------------------------------
Mr. M.P. Khajanchi, Advocate for Appellant.
Mr. Y.J. Maheshwari, Advocate for respondent No.1.
Mr. Prakash Naidu, Advocate for respondent No.4.
------------------------------------------------------------------------------------------------------------
14.AA 204.279 Judgment.odt
3
CORAM : ROHIT W. JOSHI, J.
DATE : 30/03/2026
JUDGMENT :
1. T he present appeals are preferred under Section 37 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A
& C Act, 1996”) in order to challenge order dated 13.10.2025
th
passed by the learned 4 Joint Civil Judge Senior Division, Nagpur,
on applications at Exhibits 10 and 13 filed by the appellants in
Arbitration Appeal No.279 of 2025 and Arbitration Appeal
No.204 of 2025, respectively, under Section 8 of the A & C Act,
1996 for referring the subject matter of the said suit for arbitration.
Both these appeals arise out of identical facts and give rise to the
same question of law and therefore they are being decided together
by a common judgment.
2. The respondent No.1 has filed a suit, being Special Civil
Suit No.1069 of 2024, inter alia claiming declaration that Exchange
Deed dated 11.11.2020 executed by the defendant No.1 (Appellant
in Arbitration No.279 of 2025) in favour of defendant No.4
(Appellant in Arbitration No.204 of 2025) is an outcome of fraud
and is illegal, null and void and for cancellation of the same. In this
suit, the defendant Nos.1 and 4 had filed separate applications vide
14.AA 204.279 Judgment.odt
4
Exhibits 10 and 13, respectively, for reference of the dispute to
arbitration.
3. The parties will be referred as plaintiff and defendants.
The plaintiff, defendant No.1 and four other individuals are
partners in the defendant No.2-partnership firm. The partners had
executed a Partnership Deed dated 01.04.2019. Clause 12(c) of the
Partnership Deed provides that, the partners shall execute
authorization in favour appellant/defendant No.1 (partner No.6
and respondent No.1/plaintiff (partner No.5), authorizing them to
sell the properties enumerated in Schedule I and II of the
Partnership Deed. The suit property bearing Khasra No.292 of
village Chinchbhavan, Tah. and Dist. Nagpur, is included at
Schedule II (ii) of the said Partnership Deed.
4. Thereafter, the partners, including plaintiff and
defendant No.1 executed another Partnership Deed dated
30.06.2021. Clause 8(b) of the Partnership Deed dated 30.06.2021
records that partner No.6 i.e. defendant No.1, shall have exclusive
rights to sell and deal with properties described in Schedule II and
shall be entitled for entire profit from the sale of the said properties.
The suit property is included at Schedule II (ii) of the said
Partnership Deed dated 30.06.2021.
14.AA 204.279 Judgment.odt
5
5. The defendant No.1 has executed a registered Exchange
Deed with respect to the suit property in favour of the defendant
No.4. The plaintiff has filed aforesaid suit challenging the said
transaction. The defendant Nos.1 and 4 had filed two separate
applications for reference of the dispute forming subject matter of
the suit for arbitration, in view of the arbitration clauses
incorporated in Paragraphs 13 and 14 of the Partnership Deeds
dated 01.04.2019 and 30.06.2021, respectively.
6. These applications were opposed by the plaintiff on the
ground that the defendant No.4 is not a party to the arbitration
agreement which is contained in the Partnership Deeds between the
plaintiff, defendant No.1 and four other partners.
7. The learned trial Court has rejected the applications on
the ground that a separate arbitral proceeding with respect to the
same firm is pending between all the partners of the partnership
firm.
8. The reason recorded by the learned trial Court for
making reference is clearly unsustainable. In fairness, the learned
Advocate for the plaintiff does not seriously support the order for
the reasons recorded. However, the learned Advocate for the
plaintiff vociferously supports the conclusion arrived at by the
14.AA 204.279 Judgment.odt
6
learned trial Court, albeit on a different ground, namely, that the
defendant No.4 is not party to the arbitration appeal. The
contention of Mr. Yash Maheshwari, learned Advocate for the
plaintiff is that the defendant No.4 is in no way related to the
partnership firm and merely because he has entered into a
transaction with respect to the property of the firm, he cannot
invoke arbitration clause incorporated in the Partnership Deed,
which is for resolution of dispute only inter se between the partners.
Mr. Maheshwari, also draws attention to the Exchange Deed and
contends that the Exchange Deed is not executed by the defendant
No.1/partner No.6 alone, but same is executed in the name of the
partnership firm.
9. Mr. Khajanchi, learned Advocate for the respondent
No.2/original defendant No.1, however, draws attention to Section
8 (1) of the A & C Act, 1996 and contends that reference of dispute
is contemplated under the said provision, not only in cases where
the suit is between parties to an arbitration agreement, but also in
cases where the suit is between such parties and / or any person
claiming through or under party to arbitration agreement. Mr.
Khajanchi, draws attention to the aforesaid clauses 12(c) and 8(b) of
the two partnership deeds which enable the defendant No.1 to deal
14.AA 204.279 Judgment.odt
7
with the suit property and to retain consideration arising from the
transaction with respect to the suit property has acquired the suit
property in exchange from the defendant No.1 and as such the
defendant No.4 claims right. He contends that the defendant No.4
is claiming through defendant No.1, who is admittedly party to the
arbitration agreement. The Advocate for the defendant No.4
advances arguments on similar lines.
10. Pendency of arbitration proceedings between all six
partners of the firm could not be a reason for rejecting the
application for reference under Section 8 of the A & C Act, 1996.
However, it needs to be seen as to whether the defendant No.4, who
is admittedly not a partner in the firm can be a party to arbitration
proceeding arising out of arbitration clause incorporated in the
Partnership Deeds. In the considered opinion of this Court, the
defendant No.4 will answer the description of a person claiming
through or under a party to the arbitration agreement, namely the
defendant No.1, since he has acquired one of the properties of the
firm through its partner, the defendant No.1. Though the
transaction was entered into in the name of the firm, provisions of
Clauses 12(c) and 8(b) of the Partnership Deeds dated 01.04.2019
and 30.06.2021 cannot be ignored. Whether the Exchange Deeds
14.AA 204.279 Judgment.odt
8
are legal or valid is a matter for the arbitral tribunal to decide.
11. The defendant No.4 claims title over the suit property
through the defendant No.1. The dispute between partners is as to
whether defendant No.1 was competent to transfer the suit property
unilaterally as is done by him. The question to be answered relates
to authority of the defendant No.1 to deal with suit property as per
the terms of partnership deed. This is the basic dispute. The
defendant No.4 who claims title over the suit property on the basis
of exchange deed executed by defendant No.1 claims his right
through the defendant No.1. The defendant No.4 is thus a person
claiming through defendant No.1.
12. Mr. Khajanchi, is right in placing reliance on judgment of
the Hon’ble Supreme Court in the case of Rashtriya Ispat Nigam
1
Ltd and another ..vs.. Verma Transport Co. , which deals with
distinction between the erstwhile Section 34 of the Arbitration Act,
1940 and Section 8 of the A & C Act, 1996 and holds that under
the earlier Act, it was a matter of discretion of the Court to refer the
parties to the arbitration, however, under the new regime, it is
mandatory for the Court to make a reference if Section 8 is
attracted. For the reasons recorded above, the arbitration appeals are
allowed in the following terms :-
1 (2006) 7 SCC 275
14.AA 204.279 Judgment.odt
9
th
i) Orders dated 13.10.2025 passed by the learned 4 Joint
Civil Judge Senior Division, Nagpur, on applications at
Exhibits 10 and 13, in Special Civil Suit No.1069 of
2024, are quashed and set aside and the said applications
are allowed.
ii) Parties to bear their own costs.
(ROHIT W. JOSHI, J.)
C.L. Dhakate