THE HON’BLE Ms. JUSTICE G. ROHINI ARBITRATION APPLICATION No.7 of 2010 Date: 04.03.2011 Between: Konda Ramesh Resddy … Applicant And 1. M/s. JSNR Constructions, rep. by its Managing Partner Janga Siva Nagi Reddy And 6 others. … Respondents THE HON’BLE Ms. JUSTICE G. ROHINI ARBITRATION APPLICATION No.7 OF 2010 ORDER : This is an application filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator and to refer the dispute between the parties herein for resolution. The applicant and the respondents 2 to 7 herein had entered into a Partnership Agreement, dated 16.05.2008 constituting the 1st respondent Partnership Firm. The respondent No.2 herein is the Managing Partner. Several disputes arose between the applicant and the other partners and on 25.03.2009 the applicant got issued a legal notice to the respondent No.2 calling upon to furnish the accounts of the firm and other details with regard to the venture taken by the firm for development of Chaitanya Homes. In the said notice, the applicant had also proposed the name of one Arbitrator on his behalf in terms of Clause-22 of the Partnership Deed making it clear that if the information required is not furnished within fifteen days from the date of receipt of the said notice appropriate legal action would be initiated before the appropriate forum for redressal of the applicant’s grievance. A copy of the said notice was also sent to all other partners of the 1st respondent’s firm. Without referring to the legal notice got issued by the applicant, the 2nd respondent, by letter dated 6.4.2009 informed the applicant that a meeting of all the partners had been convened on 12.04.2009 to discuss about the venture – Chaitnaya Homes. The applicant claims that the said letter was received by him only on 20.04.2009 and therefore he could not attend the meeting and the said fact was informed to the 2nd respondent by letter dated 6.5.2009 requesting to fix another date for meeting with prior intimation. However there was no response from the respondents and on the other hand the 2nd respondent in his capacity as the Managing Partner started sale of flats of Chaitanya Homes. The applicant issued a telegraphic notice dated 29.06.2009 to the 2nd respondent not to proceed with the sales without settling the accounts as claimed in the earlier notice dated 25.03.2009 by referring the disputes for arbitration. As there was no response, the applicant filed Arbitration O.P.No.145 of 2009 in the Court of the II-Addl. District Judge, Guntur seeking injunction restraining the respondents herein from alienating the petition schedule property. Thereafter the present application came to be filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. A counter-affidavit has been filed on behalf of the respondents in which the execution of the Partnership Deed, dated 16.05.2008 as well as the arbitration clause has not been disputed. However it is contended that the allegations as to mismanagement and misappropriation of the funds of the firm are false and without any basis. It is also contended that as there was no request by the petitioner prior to the notice dated 25.03.2009 for rendition of accounts, it cannot be said that any dispute was existing among the partners as on that date and therefore the question of accepting the applicant’s proposal for appointment of arbitrator did not arise at all. I have heard the learned counsel for both the parties and perused the material available on record. Clause-22 of the Partnership Deed dated 16.05.2008 reads as under: “22. ARBITRATION: Any dispute, that arise among the partners in respect of the conduct of business of the partnership or in respect of interpretation, operation or confirment of any of the terms and conditions of the deed or in respect of any other matters, cause or thing whatsoever set out here in or otherwise provided for, the same shall be referred to the single arbitrator appointed by the partners with mutual consent, whose decision shall be final and binding on the parties and their legal representatives.” As could be seen from the above clause, any dispute that arise among the partners in respect of the conduct of business of the partnership shall be referred to the single arbitrator appointed by the partners with mutual consent. The applicant invoked the said arbitration clause by notice dated 25.03.2009 and proposed an arbitrator of his choice. The respondents did not dispute the receipt of the said notice. However it is contended that the question of appointment of arbitrator did not arise since no dispute existed among the partners prior to 25.03.2009. It is true that there is nothing on record to show that there was any notice in writing prior to 25.03.2009 for rendition of accounts, but I do not find substance in the contention of the respondents that prior to 25.3.2009 no disputes existed among the applicant and the respondents with regard to conduct of business of the 1st respondent partnership firm. The specific case of the applicant is that several disputes arose among the partners during the 3rd week of March, 2009 and the 2nd respondent had refused to furnish the true accounts of the partnership firm. As could be noticed from the pleadings of the parties, various allegations and counter-allegations are made against each other. Particularly the fact that the injunction granted by the Court of II-Addl. District Judge, Guntur in A.O.P.No.145 of 2009 is operating against the respondents herein, shows that there are disputes between the parties with regard to the conduct of business of the 1st respondent partnership firm. It is also apparent that the said disputes are yet to be resolved. The law is well-settled that existence of such live dispute is sufficient to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 { vide VISA INTERNATIONAL LIMITED v. CONTINENTAL RESOURCES (USA) LIMITED[1] UNION OF INDIA AND OTHERS v. ONKAR NATH BHALLA AND SONS[2] }. Hence I deem it appropriate to appoint Sri M. Chalapathi Rao, District Judge (Retd.), as sole arbitrator to resolve the disputes between the parties with regard to Chaitanya Homes Apartments constructed by the 1st respondent partnership firm. Arbitration Application is accordingly allowed. No costs. ______________ G. ROHINI,J. Dt. 04.03.2011 gbs [1] 2009(2) SCC 55 [2] 2009 (7) SCC 350