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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 27th May, 2014 of vacation District Judge,

Mangalore in Original Suit No. 5 of 2014 filed by the

appellants/plaintiffs. In the Suit, I.A. No. IV was

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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  

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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  

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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,1st  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.

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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

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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

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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

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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

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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

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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.

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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

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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

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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.

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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.

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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.”

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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.

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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)