Final Order 1

Order Details: Notice of Motion
Pdf Text: 1 NM No.1133/2020 In
Comm. Suit 530/2021
MHCC010031662020
IN THE CITY CIVIL COURT AT MUMBAI.
NOTICE OF MOTION No.1133 OF 2020
IN
COMMERCIAL SUIT No.530 OF 2021
Suman Shantinath Magdum and Ors. …PLAINTIFFS
VERSUS
Netaji Narobe Omase and Ors. …DEFENDANTS
Shri. A. G. Revankar, learned advocate for plaintiff.
Shri. Tukaram Shendge, learned advocate for defendant no.1, 2, 3, 5, 6
Shri. S. S. Bedekar, learned advocate for defendant no. 4(a,c,d).
Deft no.4(b) Exparte.
Shri. S. S. Waghmare, learned advocate for defendant no.7.
CORAM : JUDGE SHRI. N.P. TRIBHUWAN (C.R.NO.32)
O R D E R
(Delivered on 18/04/2023)
Defendant no.1, 2, 3, 5 & 6 have filed this Notice of Motion
for return/rejection of plaint under order VII Rule 10 & 11 of CPC on
the ground that suit is hit by arbitration clause mentioned in the
Partnership Deed dt.23/10/1969 which came to be registered on
15/11/1969.
2. Defendant no.1 to 3, 5, 6 contended that plaintiff has filed
this suit for i] declaring that partnership firm – M/s. Krishna
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Ramchandra Omase Magdum and Co. dissolved as on 25/12/2018, ii]
appointing Court Commissioner to finalize the accounts of partnership
firm, iii] declaring that defendant Nos.1 and 2 are not partners. iv]
defendant No.7 be directed to admit the plaintiff as member of
association for and stead of Shri Shantinath Bhausaheb Magdum, v]
directing the defendant Nos. 1 and 2 to handover vacant and peaceful
possession of shop No.F/10, vi] directing defendant Nos.1 and 2 to
refund amount of Rs.6,90,597/ to the partnership firm and for other
relief.
3. Defendant Nos.1 to 3 and 5, 6 come with case that initially
in the year 1966 Shri Krishna Ramchandra Omase and Shri Shantinath
Bhausaheb Magdum entered into partnership under Partnership Deed
dtd.09/09/1966, which came to be registered on 15/02/1967.
Subsequently on 11/09/1969 Krishna Ramchandra Omase expired and
therefore, the said partnership firm was dissolved. Accordingly, fresh
partnership deed was executed by Shantinath Bhausaheb Magdum,
Babasaheb Krishna Omase, Shankar Krishna Omase, Narba Krishna
Omase, Mahadev Krishna Omase in the name and style M/s. Krishna
Ramchandra Omase Magdum and Co. on 23/10/1969 which came to be
registered on 15/11/1969.
4. As per clause No.16 of Partnership Deed dtd.23/10/1969
parties agreed to refer the dispute in relation to any of the matter
whatsoever touching the partnership affairs to single arbitrator or
otherwise to two arbitrators. Thus, in view of the arbitration clause in
Partnership Deed, this court has no jurisdiction to entertain and try
present suit under Order 7 Rule 11(d) of CPC. Hence, this Notice of
Motion.
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5. Plaintiff filed reply at Exh.4 and 8. Plaintiffs come with a
case that defendant No.1 has made false statement that he is authorized
by defendant Nos.3 to 6. The present suit is not only for declaration of
dissolution of partnership firm but for other several reliefs. Defendant
Nos.1 and 2 are not partners in partnership firm M/s. Krishna
Ramachandra Omase Magdum and Co. registered on 15/02/1967.
Therefore, the dispute is beyond the jurisdiction of arbitrator. In view of
above pleadings, the plaintiffs have denied all other adverse contents of
the Notice of Motion.
6. Heard learned counsel of both the parties. In view of rival
contention of parties following points arise for determination of this
court and recorded findings thereon for the reasons stated as under.
Points Findings
1 Whether plaint is liable to be
returned/rejected under order 7 Rule 10
& 11 of CPC on the ground of arbitration
clause ?
...No.
2 What order ? ...As per final order.
REASONS
As to Point No.1.
7. Perused record. Claim of plaintiff is based on partnership
deed dtd.9/9/1966, registration certificate dtd.15/2/1967, partnership
deed dtd.23/10/1969, 4/9/1989 and 27/2/1990 etc. Defendant Nos.1
to 3, 5, 6 relied on term No.16 of partnership deed dtd.23/10/1969 for
rejection/return of plaint on the ground of arbitration clause. Learned
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counsel of defendant relied on case law of Hindustan Petroleum
Corpn. Ltd. V/s. Pinkcity Midway Petroleums (2003) 6 SCC 503
wherein observed and held, if in an agreement between the parties
before the civil court, there is a clause for arbitration, it is mandatory
for the civil court to refer the dispute to an arbitrator.
8. Learned counsel of plaintiffs relied on case law of Sukanya
Holding Pvt. Ltd. V/s. Jayesh H. Pandya and Ors.
MANU/SC/0310/2003 wherein Hon’ble Supreme Court observed and
held that the reliefs claimed are not only against defendant Nos.1 and 2
who are contracting parties but against remaining 23 parties who are
purchasers so called tenants of the disputed flats. There is no provision
in the Arbitration and Conciliation Act that when the subject matter of
the suit includes subject matter of the arbitration agreement as well as
other dispute, the matter is required to be referred to arbitration. There
is also no provision for splitting the cause or parties and referring the
subject matter of the suit to the arbitrators. There is no provision as to
what is required to be done in a case where some parties to the suit are
not parties to the arbitration agreement. As against this, under Section
24 of the Arbitration Act, 1940, some of the parties to a suit could apply
that the matters in difference between them be referred to arbitration
and the Court may refer the same to arbitration provided that the same
can be separated from the rest of the subject matter of the suit. Section
also provided that the suit would continue so far as it related to parties
who have not joined in such application. The bifurcation of the subject
matter of an action brought before a judicial authority is not allowed.
9. Learned counsel of plaintiff also relied on case law of
Vidya Drolia and Others V/s. Durga Trading Corporation (2021) 2
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SCC 1, wherein observed and held bifurcation of subject matter or
causes of action in the suit is not permissible and contemplated.
Similarly, in a case reference to arbitration is sought under Section 8 of
the A & C Act, the parties to the suit should be bound by the arbitration
agreement, as there is no provision in the Arbitration Act to compel
third persons who have not exercised the option to give up the right to
have access to courts and be bound by the arbitration clause. This
would violate party autonomy and consensual nature of arbitration.
Bifurcation in such cases would result in a suit being divided into two
parts, one being decided by the arbitral tribunal, and the other by the
court or judicial authorities. This would defeat the entire purpose and
inevitably delay the proceedings and increase cost of litigation, cause
harassment and on occasions give rise to conflicting judgments and
orders by two different fora.
10. In the present suit defendant no.1 & 2 relied on
partnership deed dt.23/10/1969 which came to be registered on
15/11/1969 wherein arbitration clause is mentioned. However, they
are not parties to the said Partnership Deed. Defendant No.7 is owner of
property and he is not party to the said Partnership Deed. The present
suit is for i] declaring that partnership firm – M/s. Krishna Ramchandra
Omase Magdum and Co. dissolved as on 25/12/2018, ii] appointing
court commissioner to finalize the accounts of partnership firm, iii]
declaring that defendant Nos.1 and 2 are not partners. iv] defendant
No.7 be directed to admit the plaintiff as member of association for and
stead of Shri Shantinath Bhausaheb Magdum, v] directing the
defendant Nos. 1 and 2 to handover vacant and peaceful possession of
shop No.F/10, vi] directing defendant Nos.1 and 2 to refund amount of
Rs.6,90,597/ to the partnership firm and for other relief. Thus, in view
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of above case laws relied upon by plaintiffs, in the present suit the cause
of action cannot be bifurcated. As the defendant Nos.1, 2 and 7 are not
parties to the said Partnership Deed, the terms mentioned in the said
deed is not binding on them. Therefore, the dispute is beyond the
jurisdiction of arbitrator. Hence, suit cannot be returned/rejected.
Therefore, I answer point No.1 in negative. Thus, following order.
ORDER
Notice of Motion No.1133 of 2020 is rejected
Date :18/4/2023
(N.P. Tribhuwan)
Judge, City Civil Court,
Mumbai. C.R.No.32.
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Direct dictated on : 18/4/2023
Checked on : 18/4/2023
Signed on : 18/4/2023
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
18/4/2023 Mrs. Rupali S. Bhor
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge(with CR No.) HHJ SHRI. N. P. TRIBHUVAN
(C.R.No.32)
Date of pronouncement of Order 18/4/2023
Order signed by P.O. on 18/4/2023
Order uploaded on 18/4/2023
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