Partnership; Columbia Holdings Vs. SSP Developers [Delhi High Court, 11-08-2016]

Arbitration and Conciliation Act, 1996 – Section 11 – Partnership Act, 1932 – Section 69 (3) – Effect of non-registration – dissolution of partnership firm – Appointment of Arbitrators – It is only because there is an arbitration agreement between the parties, instead of filing a Suit for rendition of accounts and dissolution under Section 69(3) (a), a petition under Section 11 has been moved for appointment of an arbitration and under Section 9 for interim measures. The petitions under Section 9 and Section 11 (6) are liable to be tried on their merits as the bar under Section 69 (3) of the Partnership Act is not attracted in the present case.


IN THE HIGH COURT OF DELHI AT NEW DELHI

CORAM: HON’BLE MR. JUSTICE V.KAMESWAR RAO

Judgment delivered on August 11, 2016

+ ARB.P. 212/2016, IAs 6012-6013/2016 COLUMBIA HOLDINGS PRIVATE LIMITED ….. Petitioner Through: Mr. Harish Malhotra, Sr. Adv. with Mr. Anil Sharma, Mr. N.S. Bajwa, Mr. Pramod Saigal, Mr. Shikhar Sareen & Mr. Jaskaran, Advs. versus SSP DEVELOPERS PVT. LTD. ….. Respondent Through: Mr. Ravi Gupta, Sr. Adv. with Mrs. Shally Bhasin, Mr. Raghav Pandey, Ms. Bhoomija Verma, Mr. Yudhishthir Singh & Mr. Lakshmeesh Kamath, Advs. for R-1 to 3 AND + ARB.P. 213/2016, IAs 6014-6015/2016 COLUMBIA HOLDINGS PRIVATE LIMITED ….. Petitioner Through: Mr. Harish Malhotra, Sr. Adv. with Mr. Anil Sharma, Mr. N.S. Bajwa, Mr. Pramod Saigal, Mr. Shikhar Sareen & Mr. Jaskaran, Advs. Versus SSP DEVELOPERS PVT. LTD. ….. Respondent Through: Mr. Ravi Gupta, Sr. Adv. with Mrs. Shally Bhasin, Mr. Raghav Pandey, Ms. Bhoomija Verma, Mr. Yudhishthir Singh & Mr. Lakshmeesh Kamath, Advs. for R-1 to 3 AND + O.M.P.(I) (COMM.) 94/2016, IAs 5957-5958/2016 M/ S COLUMBIA HOLDINGS PRIVATE LIMITED ….. Petitioner Through: Mr. Sudhir Nandrajog, Sr. Adv. with Mr. Anil Sharma, Mr. N.S. Bajwa, Mr. Pramod Saigal, Mr. Shikhar Sareen & Mr. Jaskaran, Advs. versus M/ S SSP DEVELOPERS PVT. LTD. ….. Respondent Through: Mr. Ravi Gupta, Sr. Adv. with Mrs. Shally Bhasin, Mr. Raghav Pandey, Ms. Bhoomija Verma, Mr. Yudhishthir Singh & Mr. Lakshmeesh Kamath, Advs. for R-1 to 3 AND + O.M.P.(I) (COMM.) 96/2016, IAs 5959-5960/2016 COLUMBIA HOLDINGS PRIVATE LIMITED ….. Petitioner Through: Mr. Sudhir Nandrajog, Sr. Adv. with Mr. Anil Sharma, Mr. N.S. Bajwa, Mr. Pramod Saigal, Mr. Shikhar Sareen & Mr. Jaskaran, Advs. versus SSP DEVELOPERS PVT. LTD. ….. Respondent Through: Mr. Ravi Gupta, Sr. Adv. with Mrs. Shally Bhasin, Mr. Raghav Pandey, Ms. Bhoomija Verma, Mr. Yudhishthir Singh & Mr. Lakshmeesh Kamath, Advs. for R-1 to 3.

V.KAMESWAR RAO, J.

1. By this order, I shall decide a preliminary objection taken by the respondents on the maintainability of the four petitions which have been filed by the petitioner under

Section 11 (5) and 11 (6) of the Arbitration and Conciliation Act, 1996

(„Act of 1996‟ in short) being Arbitration Petitions No. 212/2016 and 213/2016 and Petition under Section 9 of the Act of 1996 being OMP (I) (COMM) Nos. 94/2016 and 96/2016 on the ground that the petitions are hit by

Section 69 (3) of the Partnership Act, 1932

(„Partnership Act‟ in short).

2. The Arbitration Petition 212/2016 and OMP (I) (COMM) 96/2016, the relevant facts are, a fresh partnership deed dated April 1, 2005 was signed between MGF Development Ltd. and Columbia Holdings Pvt. Ltd in the partnership firm of MGF Mall Management to share the profits and losses as under:-

M/s MGF Development Ltd- 50%

M/s Columbia Holdings Pvt. Ltd.- 50%

Thereafter, on 6th June, 2012 M/s SSP Developers Pvt Ltd. respondent No.1 through its Director Mr. Siddharth Gupta was introduced in the partnership firm and the profits and losses under new partnership were agreed to be shared as under with effect from October 1, 2009.

M/s MGF Development Ltd- 25%

M/s Columbia Holdings Pvt. Ltd.- 50%

M/s SSP Developers Pvt. Ltd.- 25%

Similar is the position in Arbitration Petition No.213/2016 and OMP (I) (COMM) No.94/2016. In the said cases, the partnership firm is MGF Event Management.

3. It is the case of the petitioner that, the petitioner sought disbursal of profits and the amount lying in the capital account vide legal notice dated 31st March, 2015 to the respondents. It is stated by the petitioner, a reply dated 14th April, 2015 was sent by the respondents through their lawyer. A counter-reply dated 28th April, 2015 was sent by the petitioner to the aforesaid reply of the respondents. A further counter-reply was given by the respondents dated 14th May, 2015 which also resulted in a further reply on behalf of the petitioner dated 2nd June, 2015. It is the case of the petitioner that the petitioner through its advocate got issued legal notice dated 26th October, 2015 called upon the respondents to make a reference to the disputes arising out of and in relation to the business of the partnership firm M/s MGF Event Management through anyone of the suggested persons named in the said notice. Identical are the facts in Arbitration Petition No.212/2016 and OMP (I) (COMM) No.96/2016. The firm being MGF Mall Management.

Submissions:-

4. Mr. Ravi Gupta, learned Sr. Counsel for the respondents would submit the following facts needs to be considered for appreciating the aforesaid issue:

31st March, 2015 – Notice given by the petitioner seeking rendition of accounts and return of his capital.

14th April, 2015 – Reply given by the petitioner inter alia denying the contention of the petitioner in the aforesaid notice.

28th April, 2015 – A rejoinder notice given by the petitioner inter alia reiterating its earlier stand.

14th May, 2015 – The facts again denied by the respondents.

2nd June, 2015 – Another notice issued by the petitioner.

26th October, 2015 – Again a notice issued by the petitioner inter alia seeking appointment of an Arbitrator.

5. It is his submission that the aforesaid correspondence/notices exchanged show that the petitioner has throughout been asking for rendition of accounts, its share of profits and return of its capital. The firm has never been dissolved nor any intention to dissolve the firm has ever been made. The petitioner cannot now claim that they were praying for the dissolution of the partnership firm. Such a contention is misconceived and merely an afterthought. Reference is made to