Judgment Name: Hemlata Jain v. Padmavati Analkumar Mishra
Court: The High Court of Gujarat
Coram: Aravind Kumar, CJ.
Date: 7th October 2022
Keywords: Section 21, Section 11(6), Arbitration & Conciliation Act, 1996 (the “A&C Act”), Section 69, Indian Partnership Act, 1932
A single-judge bench comprising of Chief Justice Aravind Kumar adjudicated that an allegation of a notice to invoke arbitration under Section 21 of the A&C Act being vague or bereft of material particulars cannot be a ground to reject an application seeking appointment of an arbitrator under Section 11(6).
The parties entered into a partnership deed, after which certain disputes arose. Thereafter, an application was filed before the Gujarat High Court seeking the appointment of an arbitrator under Section 11(6) of the A&C Act. The Respondent argued against the said application and stated that an unregistered deed renders the application dismissed. Moreover, it was argued that the Petitioner’s notice under Section 11 lacked material particulars, making the application liable to be dismissed. The Petitioner, instead, argued that arbitration proceedings did not fall within Section 69(3) of the Partnership Act and thus were exempt from the bar mentioned therein.
Whether an application for the appointment of an arbitrator can be rejected due to a vague notice issued under Section 11(6) of the Act?
Analysis and Reasoning:
As per Section 69(1) of the Partnership Act, no suit can be instituted by a partner against his firm to enforce a right arising from a contract, unless the firm is a registered one. The Court referred to the Supreme Court’s decision in Umesh Goel v. HP CGHS Ltd., where it was held that arbitration proceedings do not come within the fold of “other proceedings” for the purposes of Section 69(3) of the Partnership Act. Further, the Court held that the “Nature of Dispute” need not be stated in the notice seeking the appointment of the arbitrator. Thus, the Petitioner’s contention of the notice being vague and bereft of material facts could not be a ground to reject the application.
Conclusion: The notice issued under Section 11(6), despite not enumerating the nature of the dispute, will be considered a valid notice seeking the appointment of the arbitrator. The appointment of the sole arbitrator was upheld.
[This case note has been authored by Mayannk Sharma, an Editor at Mapping ADR.]