BHAGWAN DAS GOEL (DEAD) THROUGH HIS LRS. & ORS. versus PYARE KISHAN AGARWAL
[2019] 6 S.C.R. 457, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
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457
BHAGWAN DAS GOEL (DEAD) THROUGH
HIS LRS. & ORS.
v.
PYARE KISHAN AGARWAL
(Civil Appeal No.3399 of  2019)
APRIL 04, 2019
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Arbitration Act, 1940:
s. 20 – Application for appointment of arbitrator – In terms
of arbitration clause in the partnership deed – Preliminary
objection as to maintainability of the application on the ground
that the same was barred u/s. 69(3) of Partnership Act as it was an
unregistered partnership – Courts below held that the application
was maintainable – On appeal, held: Matter remitted to High Court
for deciding the issue keeping in view law laid down in *Krishna
Motor Service case – Partnership Act, 1932 – s.69(3).
Allowing the appeal, the Court
HELD: High Court did not decide the issue, which was the
subject matter of the writ petition, keeping in view the law laid
down by this Court in the case  of  *Krishna Motor Service case.
Therefore, the matter should be remitted to the High Court for
deciding the writ petition afresh on merits keeping in view the
law laid down by this Court in the case of *Krishna Motor Ser-
vice. [Paras 12 and 14][459-E; G]
Krishna Motor Service by its Partners v. H.B. Vittala
Kamath (1996) 10 SCC 88 : [1996] 1 Suppl. SCR 594
– referred to.
Case Law Reference
[1996] 1 Suppl. SCR 594     referred to
Para 12
[2019] 6 S.C.R. 457
    457
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 3399
of 2019
From the Judgment and Order dated 14.05.2012 of the High Court
of  Judicature at Allahabad in Writ C. No. 14839 of 1993.
Rishi Malhotra, Utkarsh Singh, Advs. for the Appellants.
Mrs. Rani Chhabra,  Advs. for the Respondent.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J.
1. Leave granted.
2. This appeal is directed against the final judgment and order
dated 14.05.2012 passed by the High Court of Judicature at Allahabad
in Writ C. No.14839/1993 whereby the High Court dismissed the writ
petition filed by the appellants herein and upheld the order dated
18.03.1993 passed by the Civil Judge, Jhansi in O.S. No.140/1992.
3. A few facts need mention hereinbelow for the disposal of this
appeal, which involves a short point.
4. The appellants are the legal representatives of the original
defendants and the respondent herein is the plaintiff of the suit out of
which this appeal arises.
5. The respondent filed an application under Section 20 of the
Arbitration Act, 1940 (since repealed) against the appellants’
predecessors-in-title. The application was founded on the allegations
inter alia that there was a partnership between the appellants’
predecessors-in-title with the respondent on 05.07.1960 by name “Gupta
Bus Service”.
6. However, the disputes arose between the partners of this
firm(Gupta Bus Service), which resulted in its dissolution. It was
alleged
that Clause 11 of the Partnership Deed provides for resolution of disputes
arising out of the partnership between the parties by an Arbitrator. The
respondent, therefore, prayed that an Arbitrator be appointed in terms of
Clause 11 of the Partnership Deed for deciding the disputes, which have
arisen between the parties relating to the partnership.
7. The appellants (defendants) on being served raised a preliminary
objection contending therein that since the partnership in question on
which the application under Section 20 of the Arbitration Act, 1940 was
founded was an “unregistered partnership”, therefore, in the light of the
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bar contained under Section 69 (3) of the Partnership Act, the application
filed by the respondent was not maintainable, therefore, it was liable to
be dismissed as such.
8. The Civil Judge by order dated 18.03.1993 overruled the
objection raised by the appellants (defendants) and held that the
application filed by the respondent (plaintiff) is maintainable. The
appellants (defendants) felt aggrieved and filed writ petition in the High
Court at Allahabad under Article 227 of the Constitution of India.
9. By impugned order, the High Court dismissed the writ petition
and upheld the order of the Civil Judge, which has given rise to filing of
this appeal by way of special leave by the defendants in this Court.
10. So, the short question, which arises for consideration in this
appeal, is whether the High Court was justified in dismissing the
appellants’ writ petition.
11. Having heard the learned counsel for the parties and on perusal
of the record of the case, we are inclined to allow this appeal and while
setting aside the impugned order remand the case to the High Court for
deciding the writ petition afresh on merits in the light of the observations
made infra.
12. In our considered view,  the need to remand the case has
occasioned because we find that the High Court did not decide the issue,
which was the subject matter of the writ petition, keeping in view the
law laid down by this Court in the case  of  Krishna Motor Service by
its Partners vs. H.B.
Vittala Kamath, 1996 (10) SCC 88.
13. In our view, the High Court should have noticed the
aforementioned decision and decided the question accordingly in the
light of law laid down therein. The High Court unfortunately did not take
note of the said decision and has thus committed an error requiring
interference of this Court.
14. It is for this reason, we are of the considered view that the
matter should be remitted to the High Court for deciding the writ petition
afresh on merits keeping in view the law laid down by this Court in the
case of Krishna Motor Service (supra).
15. In view of the foregoing discussion, the appeal succeeds and
is accordingly allowed. The impugned order is set aside. The case is
BHAGWAN DAS GOEL (D) THR. HIS LRS. v.  PYARE
KISHAN AGARWAL [ABHAY MANOHAR SAPRE, J.]
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
remanded to the High Court for deciding the writ petition, out of which
this appeal arises, afresh on merits as observed above.
16. Since we have formed an opinion to remand the case to the
High Court instead of deciding the issue for the first time in this appeal
on facts, we refrain ourselves from exercising the issue on merits. The
High Court will, therefore, decide the matter strictly in accordance with
law uninfluenced by any observations made in the impugned order and
this order.
17.  Since the matter is quite old, we request the High Court to
dispose of the writ petition as expeditiously as possible preferably within
six months.
Kalpana K. Tripathy
                                                Appeal allowed.