Kerala High Court
Unnimoidu vs Muhammad Iqbal on 20 December, 2024
AR NO.23/2024 1
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 20TH DAY OF DECEMBER 2024 / 29TH AGRAHAYANA, 1946
AR NO. 23 OF 2024
PETITIONERS:
UNNIMOIDU
AGED 52 YEARS
KARUTHEDATHU, S/O MUHAMMAD, BUSINESSMAN,
KARUTHEDATHU HOUSE, VELLOOR, POOKKOTTUR AMSHAM,
POOKKOTTUR P.O, ERANADU TALUK,
MALAPPURAM DISTRICT, PIN - 676517
BY ADVS. R.SURAJ KUMAR
SUNIL J.CHAKKALACKAL
N.G.SINDHU
SUNITHA G.
ANJANA R.S.
FARZA N.
RESPONDENTS:
MUHAMMAD IQBAL
AGED 48 YEARS
KIZHAKINIYAKATH, S/O MUHAMMAD NAHA KAZHAKKINIYATH
THEKKEPPADU HOUSE, PARAPPANAGADI AMSHAM
PARAPPANAGADI P.O, MALAPPURAM DISTRICT,
PIN - 676319
BY ADVS. Premjith Menon S K
BINU V V VEETTIL VALAPPIL(K/439/2004)
P.J.STEPHEN(K/474/2004)
MANEKSHA D.(K/000478/2005)
THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON
20.12.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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ORDER
Dated this the 20th day of December, 2024
Petitioner filed this Arbitration Request, invoking Section 11 of the
Arbitration and Conciliation Act, 1996 (for short “the Act of 1996”) seeking
to appoint a sole Arbitrator to adjudicate the disputes and differences
between the petitioner and the respondent arising out of a partnership
agreement.
2. Petitioner and the respondent are partners of a firm by name
‘Orchard Builders and Developers’. The partnership agreement dated
04.10.2012 is produced as Annexure A1. The object of the partnership is
inter alia stated in the deed as acquiring, constructing and selling property.
The deed contained an arbitration clause at Clause 21 which reads as
follows:
“21. That in case any dispute arises thereafter among the partners
or representatives of the deceased partner relating to any term or
condition or with regard to the partnership assets/ liabilities, the
same shall be referred to arbitration and the provisions of the India
Arbitration Act shall apply thereto.”
3. The partnership firm was registered with the Registrar of Firms
and a copy of the acknowledgment of registration of firms issued by the
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Office of the Registrar of Firms is produced as Annexure A1 (a). A parcel
of land situated in Coonoor in Nilagiri District, Tamil Nadu, was
purchased and construction was commenced thereon. Subsequently,
disputes cropped up between the petitioner and the respondent on various
counts regarding the working of the partnership. It is the contention of the
petitioner that while the respondent was abroad and showed little interest
in the conduct of the partnership, the petitioner had met all expenses and
also had put in personal efforts to further the construction work. Later on,
when the petitioner developed a reasonable apprehension that the
respondent was taking steps to alienate the said property in Coonoor to
strangers, he moved Annexure A2 petition under Section 9 of the Act of
1996 before the District Court, Manjeri, seeking an injunction against
alienation of the subject property. The respondent entered appearance
before the District Court, Manjeri and filed a detailed counter in Section 9
Petition (Annexure A3). The District Court, after being convinced of the
partnership deed and the arbitration agreement therein, granted a
temporary injunction as revealed by Annexure A4. It is the contention of
the petitioner that in the meanwhile the arbitration clause was invoked and
an Arbitrator was nominated and the same was concurred by the
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respondent. The said Arbitrator entered on reference and issued notice to
the parties as revealed by Annexure A5. The petitioner filed Annexure A6
claim petition before the Arbitrator on 16.03.2020 and the respondent filed
a statement in counter (Annexure A7). Subsequently, the respondent filed
Annexure A8 petition before the Arbitrator raising doubts regarding his
impartiality/independence and this led the Arbitrator to withdraw from the
proceedings by issuing Annexure A9 notice of withdrawal dated
04.05.2023 to both sides. In the meanwhile, at the instance of the
respondent, the temporary injunction granted earlier was vacated by the
District Court inter alia pointing out that the mandate to commence
arbitration within 90 days had lapsed. Pursuant to such lifting of the interim
injunction by the Addl. District Court, the respondent hastily alienated the
subject property to third parties. The petitioner has filed a Review Petition
(Annexure A10) before the District Court, Manjeri, seeking to set aside the
said order of vacating the temporary injunction which is stated to be
pending. Towards further pursuing the arbitration proceedings which had
been left midway due to the withdrawal of the earlier Arbitrator, petitioner
issued Annexure A11 notice to the respondent nominating another
Arbitrator and calling upon him to duly respond. The respondent replied to
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the said notice vide Annexure A12 inter alia denying the existence of the
partnership arrangement. It has also been stated therein that “Though not
in acquiescence to the jurisdiction of the Tribunal, my client had filed an
application before the then sole Arbitrator who was appointed by you
unilaterally to appoint an authority for the purpose of scientific
investigation pertaining to that of the aspect of forgery as the partnership
deed which you rely upon is illegal.” Thus arbitration proceedings in which
the respondent had also chosen to appear and seek an investigation into
the alleged forgery, remain in limbo. It is at such juncture that the petitioner
has filed this application under Section 11 of the Act of 1996, seeking
appointment of an Arbitrator by this Court.
4. The respondent entered appearance and filed a counter affidavit.
It is contended therein that the partnership agreement is a forged
document created by the petitioner utilising signed blank papers. He had
participated in the arbitration procedure under protest and the petitioner
has not issued any notice under Section 21 of the Act of 1996 for the
commencement of a valid arbitral process. The injunction order granted by
the District Court, Manjeri, had lapsed since the arbitration proceedings
had not been commenced within 90 days of the date of the order. The
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claim petition before the Arbitrator had been filed only on 16.03.2020
which is much later than the stipulated period of 90 days. The respondent
had not consented or agreed to the appointment of any Arbitrator since the
partnership agreement itself is a fabricated one. It is also contended that
the Arbitration Request is barred by limitation since more than 3 years
have elapsed from the date of the cause of action. Reliance is placed on
the dictum laid down in B and T AG v. Ministry of Defence (2023 KLT
OnLine 1473 (SC)).
5. Heard Sri.Suraj Kumar R.,the learned counsel appearing for the
petitioner and Sri.S.K.Premjith Menon, the learned counsel appearing for
the respondent.
6. Annexure A1 partnership agreement stated to have been
executed between the petitioner and respondent contains an arbitration
clause as reproduced above. The respondent has denied executing such
a partnership agreement and claimed not to be bound by any arbitration
clause. The Additional District Court, Majeri, has in Annexure A4 order
dated 19.10.2019 concluded that the partnership deed and the certificate
of registration of partnership are genuine. Be that as it may, the same are
not matters that could be looked into by this Court in a referral jurisdiction
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under Section 11 of the Act of 1996. The Hon’ble Supreme Court has
clearly circumscribed and laid down the contours of the exercise of the
referral powers under Section 11 (6) recently in SBI General Insurance
Co. Ltd V. Krish Spinning [2024 SCC OnLine SC 1754]. It has been held
therein that the referral court should limit its enquiry to examining whether
a Section 11(6) application has been filed within the three-year period of
limitation and that while at the stage of deciding an application for
appointment of an Arbitrator, the court must not conduct an intricate
evidentiary enquiry into whether the claims raised by the applicant are
time-barred and should leave that question for the Arbitrator to determine.
Regarding the question of whether an Arbitration Request is barred by
limitation, Hon’ble Supreme Court has in Krish Spinning’s case (supra)
referred to the dictum in Arif Azim Company Ltd. v. Aptech Ltd. [(2024)
5 SCC 313], which had succinctly laid down the principles to be followed
as below:
“Thus, from an exhaustive analysis of the position of
law on the issues, we are of the view that while considering
the issue of limitation in relation to a petition under Section
11(6) of the Act, 1996, the courts should satisfy themselves
on two aspects by employing a two-pronged test – first,
whether the petition under Section 11(6) of the Act, 1996 is
barred by limitation; and secondly, whether the claims
sought to be arbitrated are ex-facie dead claims and are thus
barred by limitation on the date of commencement of
arbitration proceedings. If either of these issues are
answered against the party seeking referral of disputes to
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arbitration, the court may refuse to appoint an arbitral
tribunal.” (emphasis added)
7. The respondent in this case has a contention that the
Arbitration Request is barred by limitation. In view of the above dictum in
Krish Spinning’s case (supra), this contention assumes importance and
is the only contention in this reference that requires to be examined. If the
question is answered in the negative and the matter is found fit to be
arbitrated by appointing an Arbitrator, then all other contentions like
arbitrability, jurisdiction, maintainability etc will have to be left open to be
decided in the arbitration.
8. For considering the question of whether the Arbitration
Request is hit by the three year bar of limitation, certain dates assume
relevance. The relevant dates are discernible from the annexures
produced. The partnership agreement said to have been entered into
between the petitioner and respondent is dated 04.10.2012. Disputes
between the parties arose in the year 2018, as evidenced by the filing of
Section 9 petition dated 09.07.2018 before the District Court, Manjeri. The
respondent had filed a counter dated 01.02.2019 before the District Court
and an order of temporary injunction was issued on 19.10.2019.
Thereafter an Arbitrator was appointed and a notice of arbitration was
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issued to the parties on 07.01.2020. The claim petition was filed before the
Arbitrator on 16.03.2020 and the respondent entered appearance before
the Arbitrator and filed vakalathnama. He further filed a counter statement
dated 06.06.2020 before the Arbitrator. Thereafter based on the objection
of the respondent, the Arbitrator withdrew from the Arbitration on
04.05.2023. On 06.11.2023 the District Court, vacated the temporary
injunction. To revive the stalled arbitration proceedings, the petitioner
issued to the respondent a notice of appointing an Arbitrator on
04.09.2023. The respondent replied to the same vide Annexure A12 notice
which mentions only the date and year of its issuance as 22nd day of 2023.
9. It is trite that the period of limitation to seek appointment of an
Arbitrator under Section 11 of the Act of 1996 shall be three years from the
date when the right to apply accrues. The dates mentioned above reveal
that the parties had been arbitrating the matter by filing their respective
pleadings till the Arbitrator withdrew from arbitration on 04.05.2023.
Thereafter, the petitioner had issued a notice/request dated 06.11.2023
inter alia seeking to continue the arbitration proceedings by appointing
another Arbitrator. The said letter satisfies the mandates of Section 21 of
the Act. In view of the above transactions between the parties, petition
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filed under Section 11(6) of the Act of 1996 cannot be termed as barred by
limitation. Parties had invoked Section 9 interim measures from the
competent court and the arbitration proceedings had duly commenced. It
was being pursued by the parties till the Arbitrator withdrew from the
proceedings. Hence the claims sought to be arbitrated cannot be termed
as ex-facie dead claims and or as barred by limitation.
10. Reliance had been placed by the respondent on the dictum of
the Hon’ble Supreme Court in B and T AG‘s case (supra) to contend that
AR is hit by limitation. It was inter alia held by the Hon’ble Supreme Court
in B and T AG (supra) that if an infringement of a right happens at a
particular time, the whole cause of action will be said to have arisen then
and there. In such a case, it is not open to a party to sit tight and not to file
an application for settlement of dispute of his right, which had been
infringed, within the time provided by the Limitation Act, and, allow his right
to be extinguished by lapse of time, and thereafter, to wait for another
cause of action and then file an application under Section 11 of the Act
1996 for establishment of his right which was not then alive, and, which
had been long extinguished because, in such a case, such an application
would mean an application for revival of a right, which had long been
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extinguished under the Limitation Act of 1963 and is, therefore, dead for all
purposes. Such proceedings would not be maintainable and would
obviously be met by the plea of limitation under Article 137 of the
Limitation Act,1963. The dictum in B and T AG‘s case (supra) does not
apply to the facts of this case. As noted above, in the case at hand the
petitioner has not caused extinguishment of his right by delay or by lapse
of time. Section 11 application has been filed within time and the same
cannot be termed as barred by limitation.
11. In view of the above, I find that this Arbitration Request is fit to
be allowed and that a lawyer from the panel of Arbitrators maintained by
this Court can be appointed as the Arbitrator.
12. Accordingly, this Arbitration Request stands allowed and it is
ordered as follows :
(i) Sri. Anil Thomas K., Advocate, Room No. 213, Victory Tower,
Kacheripadi, Manjeri P.O., Ernad Taluk, Malappuram- 676 121, is
nominated as the sole Arbitrator to resolve the disputes that have
arisen between the petitioner and the respondent under Annexure-A1
agreement.
(ii) The learned Arbitrator may entertain all disputes/issues between
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the parties in connection with the said agreement, including questions
of jurisdiction, maintainability, arbitrability and limitation, if any, raised
by the parties.
(iii) The Registry shall communicate a copy of this order to the
learned Arbitrator within ten days from today and obtain a Statement of
Disclosure from the learned Arbitrator as stipulated under Section 11(8)
read with Section 12(1) of the Act of 1996.
(iv) Upon receipt of the Disclosure Statement, the Registry shall
issue to the learned Arbitrator a certified copy of this order with a copy
of the Disclosure Statement appended. The Original of the Disclosure
Statement shall be retained in Court.
(v) The fees of the learned Arbitrator shall be governed by the
Fourth Schedule of the Act of 1996.
Sd/-
SYAM KUMAR V. M.
JUDGE
csl
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APPENDIX OF AR 23/2024
PETITIONER’S ANNEXURES
Annexure A1 TRUE COPY OF THE PARTNERSHIP DEED
NO.3668/2012 DATED 21/12/2012
Annexure A1(a) TRUE COPY OF THE ACKNOWLEDGMENT OF
REGISTRATION OF FIRMS DATED 21.12.2012
ISSUED BY THE REGISTRAR OF FIRMS,
THIRUVANANTHAPURAM
Annexure A2 TRUE COPY OF THE O.P(ARB) NO. 119/2018 ON
THE FILE OF THE DISTRICT COURT, MANJERI
Annexure A3 TRUE COPY OF THE OBJECTION DATED 01.02.2019
IN O.P (ARBITRATION) NO.119/2018 ON THE
FILE OF THE DISTRICT JUDGE, MANJERI
Annexure A4 TRUE COPY OF THE ORDER DATED 19.10.2019 IN
O.P (ARB.) NO.119/2018 ON THE FILE OF THE
ADDITIONAL DISTRICT JUDGE, MANJERI
Annexure A5 TRUE COPY OF THE NOTICE DATED 07.01.2020
ISSUED BY THE SOLE ARBITRATOR TO THE
PETITIONER
Annexure A6 TRUE COPY OF THE CLAIM PETITION DARED
16.03.2020 SUBMITTED BY THE PETITIONER
BEFORE THE SOLE ARBITRATOR
Annexure A7 TRUE COPY OF THE COUNTER CLAIM STATEMENT
DATED 06.06.2020 ON FILE OF THE SOLE
ARBITRATOR
Annexure A8 TRUE COPY OF THE PETITION ALONG WITH THE
AFFIDAVIT SWORN BY THE RESPONDENT DATED
30.01.2023
Annexure A9 TRUE COPY OF THE LETTER DATED 14.05.2023
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Annexure A10 TRUE COPY OF THE REVIEW PETITION, I.A.NO.
2/2023 DATED 15.11.2023 ON THE FILE OF THE
DISTRICT COURT, MANJERI
Annexure A11 TRUE COPY OF THE NOTICE DATED 04.09.2023
Annexure A12 TRUE COPY OF THE REPLY NOTICE DATED NIL