Delhi High Court – Orders
Indu Dawar vs Praveen Kumar And Ors on 9 June, 2025
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 228/2025
INDU DAWAR .....Petitioner
Through: Mr. Bharat Chugh, Ms. Latika Arora,
Ms. Anuna Tiwari and Ms. Kavya
Dhankar, Advocates.
versus
PRAVEEN KUMAR AND ORS. .....Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE TEJAS KARIA
ORDER
% 09.06.2025
I.A. 14730/2025 (Exemption from advance service of the accompanying
petition)
1. For the reasons stated in the application, exemption allowed.
2. The application stands disposed of.
I.A. 14731/2025 (Exemption)
3. Exemption allowed, subject to all just exceptions.
4. The application stands disposed of.
O.M.P.(I) (COMM.) 228/2025
5. By this petition under Section 9 of the Arbitration and Conciliation
Act, 1996 („Act’), the Petitioner seeks ex-parte interim measures inter alia
for appointment of the Court Commissioner, disclosure of accounts,
preserving the assets and subject-matter of arbitration invoked vide notice
dated 04.06.2025.
O.M.P.(I) (COMM.) 228/2025 Page 1 of 9
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6. Brief factual background relevant for this petition is that the Petitioner
is one of the co-owners and is in joint possession of the property being Shop
No. 33, situated in Village Sheikh Sarai (Savitri Nagar), Post Office Malviya
Nagar, New Delhi- 110017 („property‟) by way of inheritance, following
the death of her husband, Late Sh. Dina Nath Dawar and, subsequently, her
son, Late Sh. Jatin Dawar. Respondent No.1 is brother of Late Sh. Dina
Nath Dawar and the remaining partner of the partnership firm, namely, M/s
Gurunanak Building Material Store.
7. In the year 1977, Late Sh. Dina Nath Dawar started a sole
proprietorship under the name and style of M/s Gurunanak Building
Material Store at the property. On 23.05.1984, Late Sh. Dina Nath Dawar
executed a Partnership Deed with Respondent No. 1, thereby forming a
partnership firm under the same name. Late Sh. Dina Nath Dawar granted
the property on license to the partnership firm to carry on business
therefrom. Under the terms of the partnership, Late Sh. Dina Nath Dawar
held 60% of the profits and losses, while Respondent No. 1 held 40%.
8. Thereafter, on 05.09.2018, a fresh Partnership Deed was executed to
induct the Petitioner‟s son, Late Sh. Jatin Dawar, as a partner in the
partnership firm. The partnership was reconstituted, with Respondent No. 1
retaining a 40% profit-sharing ratio, while Late Sh. Dina Nath Dawar and
Late Sh. Jatin Dawar holding 50% and 10% respectively.
9. After the death of Late Sh. Dina Nath Dawar on 19.08.2022, a new
Partnership Deed was executed in November 2022 between Late Sh. Jatin
Dawar and Respondent No. 1. Late Sh. Jatin Dawar passed away in May
2024. Upon the demise of Sh. Jatin Dawar, the partnership firm stood
automatically dissolved by operation of law, and since the property was
O.M.P.(I) (COMM.) 228/2025 Page 2 of 9
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given to the partnership firm on license, the said license also stood
automatically revoked upon the dissolution of the firm.
10. It is alleged that Respondent No. 1 has been conducting substantial
transactions of the partnership firm without maintaining proper records or
issuing invoices, while suppressing actual profits and misappropriating the
income of the partnership firm.
11. Despite the dissolution of the partnership firm and the revocation of
the license, Respondent No.1 has not vacated the property and is also not
rendering accounts of the partnership firm from the date of death of Late Sh.
Dina Nath Dawar, thereby failing to settle the share. Respondent No.1
continues to operate the business of the partnership firm from the property
unauthorizedly, under the name and style of M/s Guru Nanak Building
Material Store.
12. The Petitioner claims that despite being the legal heir to the share of
the dissolved partnership firm and owner of the property, Respondent No.1
is preventing the Petitioner from monitoring or overseeing the business
operations of the dissolved partnership firm, and is further denying the
Petitioner access to the books of accounts and other financial records
pertaining to the partnership firm.
13. Recently the Petitioner has become aware through CCTV installed in
the property that Respondent No. 1 has obtained a new GST registration as a
proprietorship concern with effect from 01.04.2025, under the name and
style of Gurunanak Paints and Hardware (New). The Petitioner states that
the said name is deceptively similar to that of the dissolved firm and has
been adopted with the intent to unlawfully benefit from its goodwill.
14. It is further alleged that Respondent No. 1 had affixed a new QR code
O.M.P.(I) (COMM.) 228/2025 Page 3 of 9
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linked to the said alleged proprietorship concern and circulated the said new
QR code among the old customers, through which Respondent No. 1 is
allegedly accepting payments directly into his personal bank account. On
this basis, it is alleged that Respondent No. 1 is attempting to exploit the
assets, goodwill, and reputation of the erstwhile firm for his personal gain.
15. The learned counsel for the Petitioner has relied upon Section 16 of
the Indian Partnership Act, 1932 („Partnership Act‟), which provides as
under:
“16. Personal profits earned by partners.–Subject to contract
between the partners,–
(a) if a partner derives any profit for himself from any transaction of
the firm, or from the use of the property or business connection of
the firm or the firm name, he shall account for that profit and pay it
to the firm;
(b) if a partner carries on any business of the same nature as and
competing with that of the firm, he shall account for and pay to the
firm all profits made by him in that business.”
16. Accordingly, Respondent No. 1 is not entitled to derive any profit for
himself by using the property of the dissolved partnership firm and is liable
to account for the same. As Respondent No. 1 is carrying on the business of
the same nature from the property which was being used by the partnership
firm in the deceptively similar name by diverting the business of the
partnership firm, Respondent No. 1 is liable to pay all profits made by him
from that business to the partnership firm.
17. The learned counsel for the Petitioner further submits that there is an
apprehension that Respondent No. 1 would transfer the entire stock of the
firm to his sole proprietorship concern without the consent or knowledge of
the Petitioner. It is further submitted that the conduct of Respondent No. 1 in
O.M.P.(I) (COMM.) 228/2025 Page 4 of 9
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adopting a deceptively similar business name, use of the property and
continuing trade with the dissolved partnership firm‟s clientele is unlawful
and prejudicial to the rights and interests of the Petitioner.
18. Clause 15 of the Partnership Deed executed between Late Sh. Jatin
Dawar and Respondent No. 1 provides that any disputes or differences
arising in connection with the partnership firm or the Partnership Deed shall
be referred to a Sole Arbitrator, who shall be appointed mutually by the
parties. Clause 15 of the said Partnership Deed state as follows:
“15. Any disputes or differences in connection with the partnership
or this deed shall be referred to the sole arbitrator to be appointed
by the parties mutually, and the said arbitrator shall adjudicate
upon the dispute/reference at Delhi. The said arbitration shall be
governed by the provisions of the Arbitration and Conciliation Act,
1996, or any statutory modification or re-enactment thereof for the
time being.”
19. The Petitioner has invoked the said Clause 15 vide arbitration notice
dated 04.06.2025. However, there is an apprehension that Respondent No. 1
would either dispose of the entire stock and assets of the firm or transfer the
same to his sole proprietorship, which is presently being utilised unilaterally
by Respondent No.1.
20. Although arbitration has been invoked by the Petitioner, the process
of appointing an Arbitrator and subsequently initiating the arbitral
proceedings, including the adjudication of an application under Section 17
of the Act, is likely to take time. In this background, the reliefs under
Section 9 of the Act are crucial to preserve the subject matter of the
arbitration.
21. In the case of Adhunik Steels Ltd. v. Orissa Manganese & Minerals
P. Ltd., (2007) 7 SCC 125, the Supreme Court had observed that the order of
O.M.P.(I) (COMM.) 228/2025 Page 5 of 9
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grant of interim relief under Section 9 of the Act being an injunctive relief is
required to be considered upon the principles enunciated in Order 39 Rule 1
and 2 of the Code of Civil Procedure, 1908. In the present case, the reliefs
sought are set out as the reliefs of injunction, appointment of Court
Commissioner and preservation of the subject matter of arbitration.
22. Thus, at the stage of examination of evidence under Section 9 of the
Act, a detailed inquiry or evaluation of evidence is neither envisaged nor
required. A prima facie satisfaction by the Court for preservation of subject
matter of the arbitration is all that is to be seen. Therefore, on a prima facie
consideration of the material placed on record, the Petitioner has made out a
case for grant of an ex-parte interim measure to protect the subject matter of
the arbitration.
23. Further, the balance of convenience is also in favour of the Petitioner
and against Respondent No. 1 as despite being the legal heir of the deceased
partner and owner of the property, she has no access to the books of
accounts and the property. The Petitioner will suffer irreparable injury as it
is apprehended that Respondent No. 1 is diverting the funds receivable to the
account of his sole proprietorship firm without finally settling the accounts
with the Petitioner.
24. The learned counsel for the Petitioner has relied on Section 37 of the
Partnership Act, which provides as under:
“37. Right of outgoing partner in certain cases to share subsequent
profits.–Where any member of a firm has died or otherwise ceased
to be a partner, and the surviving or continuing partners carry on
the business of the firm with the property of the firm without any
final settlement of accounts as between them and the outgoing
partner or his estate, then, in the absence of a contract to the
contrary, the outgoing partner or his estate is entitled at the optionO.M.P.(I) (COMM.) 228/2025 Page 6 of 9
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of himself or his representatives to such share of the profits made
since he ceased to be a partner as may be attributable to the use of
his share of the property of the firm or to interest at the rate of six
per cent per annum on the amount of his share in the property of the
firm:
Provided that where by contract between the partners an option is
given to surviving or continuing partners to purchase the interest of
a deceased or outgoing partner, and that option is duly exercised,
the estate of the deceased partner, or the outgoing partner or his
estate, as the case may be, is not entitled to any further or other
share of profits; but if any partner assuming to act in exercise of the
option does not in all material respects comply with the terms
thereof, he is liable to account under the foregoing provisions of this
section.”
25. Accordingly, the Petitioner is prima facie entitled to share of profit
attributable to the share of her deceased husband and son. However, the
Petitioner is excluded from the business of the partnership firm being carried
on from the property of the firm without any final settlement of the accounts
by Respondent No. 1.
26. Issue Notice returnable on 04.07.2025 to be served to the Respondents
through all permissible modes including dasti.
27. Considering the facts and circumstances of this case and prima facie
evaluation of the documentary evidence annexed to the Petition containing
images of CCTV camera installed in the property, the Petitioner is entitled to
an ad-interim ex-parte interim measure till the next date of hearing as under:
27.1 Respondent No. 1, his agents, servants, or any other person
claiming through him are restrained from alienating, transferring,
encumbering, dealing or parting with possession of any of the dissolved
partnership firm‟s assets, including the assets, stocks, inventory,
machinery and financial records of the dissolved partnership firm orO.M.P.(I) (COMM.) 228/2025 Page 7 of 9
This is a digitally signed order.
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from transferring the assets, stocks, inventory, machinery and financial
records of the dissolved partnership firm into his proprietorship concern.
27.2 Respondent No. 1, his agents, nominees, assignees, legal
representatives or other person claiming any legal rights under him to
operate his proprietorship firm in the name of “Gurunanak Paints and
Hardware (New)” or any other business from Shop No. 33, Village
Sheikh Sarai (Savitri Nagar), Post Office, Malviya Nagar, New Delhi –
110017 totally admeasuring 58 square yards.
27.3 Accordingly, Mr. Samarth Luthra, Advocate [Mobile No.
+919953998888] is appointed as the Court Commissioner, who shall
visit the premises of Shop No. 33, Village Sheikh Sarai (Savitri Nagar),
Post Office, Malviya Nagar, New Delhi – 110017 totally admeasuring
58 square yards on 13.06.2025 and shall prepare an Inspection Report
regarding the assets and properties of the dissolved partnership firm in
the name and style of “M/s. Guru Nanak Building Material Store” and
Respondent No. 1‟s proprietorship firm in the name and style of
“Gurunanak Paints and Hardware (New)”, including but not limited to
their stock-in-trade, inventory, business records, bank accounts, ledger
books, balance sheets, cash receipts, UPI QR Codes, movable and
immovable assets available at the property. The concerned SHO shall
provide the necessary police assistance to the Court Commissioner. The
Inspection Report shall be filed one week prior to the next date of
hearing, with an advance copy to the learned counsel for the Petitioner.
The fee of the Court Commissioner is fixed at ₹1,50,000/- excluding any
expenses that may be required to be reimbursed. The fee and expenses
shall be paid from the bank account of the dissolved partnership firm.
O.M.P.(I) (COMM.) 228/2025 Page 8 of 9
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28. Respondent No. 1 shall file his reply within a period of three
weeks from service. Rejoinder, if any, shall be filed before the next date of
hearing.
29. List before the Roster Bench on 04.07.2025.
TEJAS KARIA, J
(VACATION JUDGE)
JUNE 9, 2025/ „HK‟
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O.M.P.(I) (COMM.) 228/2025 Page 9 of 9
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
The Order is downloaded from the DHC Server on 24/06/2025 at 12:22:31