Calcutta High Court
Shreen Developers Private Limited vs Mohammad Arif on 11 August, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 2
ORDER SHEET
AP-COM/461/2025
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
SHREEN DEVELOPERS PRIVATE LIMITED
VS
MOHAMMAD ARIF
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 11th August, 2025.
Appearance:
Mr. Arik Banerjee, Adv.
Mr. Shaunak Ghosh, Adv.
Mr. Rajib Mullick, Adv.
Mr. Biswaroop Ghosh, Adv.
...for the petitioner
Mr. Farooque Ali, Adv.
...for the respondent
The Court:
1. This is an application under Section 9 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the ‘said Act’). The
petitioner claims to be a partner of the respondent. Allegedly, the
parties entered into the partnership agreement on 18th June, 2015. The
respondent was described as the first partner who was already carrying
on a business of construction, as a sole proprietor of the firm, Ibrahim
Constructions. The respondent, as the sole proprietor, had entered into
a joint venture/development agreement dated December 1, 2011, with
2the owners of the premises situated at premises no.108, 109 and 110
(Old) Bowbazar Street, presently known as Bipin Behari Ganguly Street.
The three premises have been amalgamated into premises no.108, B.B.
Ganguly Street, Police Station – Muchipara, Kolkata.
2. Pursuant to the development agreement dated December 1, 2011, the
firm Ibrahim Construction which was the sole proprietorship of the first
partner/respondent, obtained a sanction from the Kolkata Municipal
Corporation for the building.
3. The partnership deed provided that the respondent invested and
incurred expenses to the tune of Rs.27 lakhs. The petitioner was also
carrying on business of similar nature in its individual capacity and the
parties agreed to join hands to carry on the ongoing construction as per
the development agreement entered into between the respondent and
the owners of the land. It is contended that the petitioner has also
invested substantial amount. The parties reduced the terms and
conditions of the partnership in relation to the development agreement
into various terms and conditions. Some of which are quoted below:
“4. NATURE OF BUSINESS:
That the Business of the partnership firm shall be that of
Construction, promotion and development of lands and
Buildings and/or such other business as may be decided by the
partners from time to time. The said Development Agreement
dt.01-12-2011 & all other documents, arrangements,
agreements etc. for the said property at premises no.108, B.B.
Ganguly Street, P.S. Muchipara, Kolkata – 700012 shall be now
3deemed to be belonging to and in the name of the Partnership
firm.
5. MANAGEMENT AND CONDUCT OF BUSINESS:
The business of the partnership shall be wholly carried on,
managed and conducted by all the parties who shall at all times
during the partnership diligently and faithfully employ
themselves in and about the business of the partnership, and
carry on, manage and conduct the same for the greatest
advantage of the partnership. Each Partner shall be just and
faithful to the other partners and at all times give full
information and explanation of all matters relating to the affairs
of the partnership and forthwith pay all moneys, cheques and
negotiable instrument received on account of the firm into the
firm’s bank or to the Partnership account.
6. REMUNERATION TO PARTNERS :
The partners shall be entitled to remuneration in their profit
sharing ratio and the total remuneration payable will be
calculated at the end of every financial year as per the
provisions of Income Tax Act, 1961.
a) The distributable remuneration shall be credited to the
accounts of the parties hereto in their Profit and Loss sharing
ratio.
b) After deduction of the aforesaid distributable remuneration
and firm’s Income tax the balance shall be credited to the
account of partners in their profit and loss sharing ratio.
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7. CAPITAL :
That such contribution and investment towards the capital will
be arranged by the partners as and when required in their profit
sharing ratio for the smooth running of the business of the
partnership firm or as mutually agreed amongst the partners
from time to time. Out of total investment of Rs.27,00,000/- by
the First Partner for the said Property, Rs.24,00,000/- shall be
treated as Initial Capital of First Partner and Rs.3,00,000/-
shall be reimbursed to him by the Second Partner as his (Second
Partner’s) Initial Capital. However, all further investment for
Development of the said Property as well as eviction costs of the
three tenanted shops shall be arranged, contributed and
brought in by the Second Partner as and when required towards
his Capital.
8. …
9. PROFIT AND LOSS SHARING RATIO :
That at the end of each accounting year starting from 1st April
and ending on 21st day of March, the accounts shall be closed
and a Profit and Loss Account shall be drawn up after meeting
all the necessary costs, charges and expenses incurred in
partnership firm and the profit or loss as ascertained shall be
divided or borne by the partners in the equal sharing ratio i.e.
50% to the First Partner and 50% to the Second Partner.
10. …
11. …
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12. …
13. …
14. …
15. Any party hereto shall not, without the consent of the other-
a. submit any dispute with any other person to
arbitration or com-promise or relinquish the claim,
b. withdraw any suit or legal proceedings filed by the
Firm.
c. admit any liability of the Firm.
d. acquire or dispose of any immovable or moveable
property, except the stock, in trade in the ordinary
course of business of the Firm.
e. enter into partnership or other business unilaterally
with any other person.
f. assign or transfer his or its share or any interest in
the Firm.
g. admit any person as a partner of the firm,
h. borrow any moneys for or in the name of the firm, or
create any security or change on the assets of the firm
i. enter into any contracts except contracts in the
regular course of business of the Firm,
j. stand as a guarantor or security for any person in
the name of the firm or for and on behalf of the firm”
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4. It is pertinent to mention that the partnership agreement contains a
clause with regard to settlement of dispute by arbitration. Clause 18 is
quoted below:
“18. ARBITRATION :
That any dispute or differences that may arise between the
partners or their representatives of heirs with regard to the
construction of the instrument of regarding the accounts, profit
and losses of business of the rights and liabilities of the
partners or the dissolution or winding up of the business or any
other matter relating to firm, shall be referred to arbitration in
terms of the provisions of the Arbitration and Conciliation Act,
1996 or any statutory modification thereunder.”
5. The petitioner has approached this Court for interim protection on
various grounds. First of such ground is that the respondent was
denying the partnership agreement and alleged that the documents with
regard to the said agreement which were required to be filed before the
Registrar of Firms, has been forged. The respondent also allegedly
entered into another agreement with a third party, thereby, committing
breach of the terms of the subject partnership deed. Hence, the
petitioner apprehends that the respondent will alienate the petitioner’s
share in the developer share and also deprive the petitioner from
enjoying the profit.
6. Mr. Ali, learned advocate for the respondent submits that the land
owners are necessary parties as the development of the plot was the
subject matter of the dispute. He further submits that there are
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allegations of forgery and fraud which are to be decided in an
appropriate proceeding. The petitioner has not yet invoked arbitration.
The arbitration clause would not cover the dispute involved in the
instant case.
7. This Court has considered the rival contention and finds a strong,
prima facie, case for grant of an interim protection to the petitioner. The
clauses of the partnership deed which have been quoted herein, prima
facie, appear to have been violated by the respondent. Balance of
convenience and inconvenience require that the rights and liabilities of
both parties emanating from the partnership agreement should be
protected. The developer’s share is available from the development
agreement itself and the partnership deed reveals that the petitioner has
a share in the development agreement. There is no denial of the fact
that there was a partnership between the parties. There is no denial of
the fact that the petitioner and the respondent both have invested in the
project and have a share in the profit as also in the developer’s share.
Both parties allege that the other was alienating the developer’s share
without the knowledge and consent of the partner. The respondent has
attempted to enter into a partnership with a third party.
8. Under such circumstances, the construction work will continue.
However, status quo with regard to the developer’s share shall be
maintained to the extent that the said developer’s share shall not be
alienated or transferred to any third party for a period of three months.
If any bookings have been taken, those shall not be disturbed, but final
handover shall not take place for a period of three months. Within such
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period, the parties shall take steps for constitution of an arbitral
tribunal. Upon expiry of the aforementioned period, the parties will be
at liberty to approach the learned arbitrator for further interim orders, if
the situation demands.
9. These observations are all, prima facie, and the learned arbitrator shall
proceed independently.
10. This order shall not prevent the parties from availing of other legal
recourses as they deem fit and proper.
11. The other contention of Mr. Ali that, the land owner should have
been impleaded in this proceeding is not required to be answered, in
view of the fact that dispute herein is restricted to the disputes which
the partners have against each other with regard to the rights and
liabilities arising from the partnership agreement. This point is kept
open to be adjudicated at the appropriate stage.
12. The application is, accordingly, disposed of.
(SHAMPA SARKAR, J.)
B.Pal