ATUL SINGH & ORS. versus SUNIL KUMAR SINGH & ORS.

Citation: [2008] 1 S.C.R. 44 · Decided: 04-01-2008 · Supreme Court of India · Bench: G.P. MATHUR · Disposal: Case Allowed

Judgment (excerpt)

[2008] 1 S.C.R. 44 
A 
ATUL SINGH & ORS. 
II. 
SUNIL KUMAR SINGH & ORS. 
(C.A. No. 1 O of 2008) 
B 
JANUARY 4, 2008 
[G.P. MATHUR AND AFTAB ALAM, JJ.] 
Arbitration and Conciliation Act, 1996 - ss. 7 and 8 -
Application of s. 8 - Suit for declaration that partnership deed 
c void and illegal and other reliefs - Reference of dispute to 
arbitrator by High Court - Sustainability of - Held: On facts, 
no document to show that either plaintiffs or his ancestor parties 
to partm3rship deed providing for reference of dispute to 
arbitrator, thus s. 8 not applicable to any dispute regarding the 
D said partnership deed - Only civil court could grant relief for 
declaration in the suit and not an arbitrator - Moreso, 
applications for reference of dispute to arbitration not 
accompanied by original arbitration agreement or duly certified 
copy- Thus, reference of dispute to arbitrator not sustainable. 
E 
A partnership firm was formed and 'R' became partner 
of the firm with 21 % share. Thereafter, one of the partners 
died and his widow was inducted as a partner. On 
13.1.1989, fresh partnership deed was executed in which 
'R' continued to be partner having 21% share. However, 
F 'R' died on 5.9.1992 leaving behind plaintiff nos. 2, 3, 5 
and 7 as his heirs. Thereafter, plaintiffs alleged that 
~ 
defendants fraudulently executed another partnership 
deed dated 17.2.1992 in which 'R' was not shown as one 
of the partners, though he had not given any consent for 
G retiring from the partnership. The plaintiffs filed suit for 
declaration against defendants that the partnership deed 
dated 17.2.1992 was illegal, void and without jurisdiction; 
that the plaintiffs being heirs of 'R' be deemed to be 
continued as partners to the extent of his share; and that 
H a decree for rendition of accounts of the firm from 1.4.1992 
44 
ATUL SINGH & ORS. v. SUNIL KUMAR SINGH & ORS. 
45 
~ 
upto date and the share of the profits of the partnership A 
and also other reliefs be passed. All the defendants except 
defendant no.2 were proceeded ex parte. After 5 years, 
ex-parte order was set aside against the defendant no.3-
son of defendant no. 2. Defendant no.3 then filed an 
~ 
application under section 34 of the Arbitration Act, 1940 B 
that in view of the arbitration clause in the agreement, the 
proceedings in the suit may be stayed and the matter may 
be referred to arbitration. He also filed a supplementary 
petition contending that as the suit was of year 1998, his 
earlier petitions may be treated to have been filed under c 
section 8 of the Arbitration and Conciliation Act, 1996. Trial 
Court dismissed the petition holding that as 'R'-
predecessor-in-interest of the plaintiffs was not a party to 
the partnership deed dated 17.2.1992, and relief sought 
in the suit was to declare the said partnership deed as D 
void, which could only be decided by the civil court, tl')e 
dispute could not be referred to arbitrator. Defendant no.3 
r 
filed a revision petition. High Court allowed the same. 
Hence the present appeal. 
Appellants-plaintiff contended that having regard to E 
the facts of the case, the relief of declaration that the 
partnership deed dated 17.2.1992 was illegal or void and 
the plaintiffs being heirs of 'R'would be deemed to be 
continuing as partners to the extent of his share could 
only be granted by the Civil Court and not by an arbitrator; F 
.J 
that 'R' or the plaintiffs not being parties to the deed dated 
17.2.1992, section 8 of the 1996 Act was not applicable; 
that th.e other relief regarding rendering of accounts of all 
transactions from 1.4.1992 onwards was dependent upon 
the first relief inasmuch as 'R' or the plaintiffs were 
admittedly not shown as partners of the firm in the deed G 
dated 17.2.1992 and unless the said document was 
declared as void, they could not claim any rights on the 
basis of earlier deed dated 13.1.1989; and that there was 
non-compliance of sub-section (2) of section 8 of the 1996 
Act as the application moved by defendant no.3 was not H 
46 
SUPREME COURT REPORTS 
[2008] 1 S.C.R. 
A accompanied by the original arbitration agreement or a 
;.. 
duly certified copy thereof and, therefore, the same ought 
to have been rejected . 
. Respondent-defendants contended that the claim of 
B the plaintiffs for rendition of accounts and share in the 
partnership business was based on the partnership deed 
dated 13.1.1989 to which 'R' was a party and the said deed 
contains an arbitration clau

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