LexBHARAT RASIKLAL ASHRA versus GAUTAM RASIKLAL ASHRA & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2011] 10 S.C.R. 685 BHARAT RASIKLAL ASHRA v. GAUTAM RASIKLAL ASHRA & ANR. (Civil Appeal No. 7334 of 2011) AUGUST 25, 2011 [R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.] A B Arbitration and Conciliation Act, 1996 - s. 11 - 4ppointment ·of arbitrator - Application uls. 1 i - Duty of the Chief Justice of the Supreme Court I High Court or his C designate - Partnership deed dated 12-6-1988 entered between the appellant, the first respondent and their grandfather contained an arbitration agreement - Dispute between appellant and first respondent pursuant to death of their grandfather - First respondent filed application uls. 11 D seeking appointment of arbitrator not with reference to the partnership deed dated 12-6-1998, but with reference to another partnership deed dated 19-5-2000 allegedly entered between the appellant and the first respondent - Appellant denied the existence of the deed dated 19-5-2000 contending E that the same was forged and fraudulent and therefore there was no question of appointment of arbitrator in terms of the arbitration clause contained therein - Designate of the Chief Justice of the High Court, however, allowed the application ul s. 11 and appointed an arbitrator - Whether the designate of F the Chief Justice, in exercise of power uls.11, could appoint an arbitrator without deciding the question whether there was an .arbitration agreement between the parties, leaving it open to be decided by the arbitrator - Held: The question whether there is arbitration agreement is a jurisdictional issue - Such G issue ought to have been decided by the designate of the Chief Justice and only if the finding was in the affirmative he could have proceeded to appoint the Arbitrator - Unless the first respondent was able to make out that there was a valid 685 H 686 SUPREME COURT REPORTS [2011] 10 S.C.R. A arbitration clause as per the deed dated 19-5-2000, there could be no appointment of arbitrator uls. 11 - Since serious a/legations of fraud and fabrication were made, the Court could not have proceeded to appoint an arbitrator without deciding the said issue which related to the very validity of B the arbitration agreement - Order of the High Court appointing an arbitrator accordingly set aside - Matter remitted to· High Court for deciding the questions whether the deed dated 19- 5-2000 was forged or fabricated and whether there was a valid and enforceable arbitration agreement between tf)e parties. c The appellant and the first respondent are brothers. A deed of partnership dated 12.6.1988 was entered amongst the appellant, the first respondent and their grandfather 'K' to carry on business, their shares being 30%, 30% and 40% respectively. The said partnership D deed provided that all disputes between the partners shall be referred to arbitration. It was the stand of the first respondent that immediately after the death of 'K', fresh partnership deeds E were executed between him and the appellant on 6.9.1991 and again on 19.5.2000; and consequently the share of the appellant was reduced to 10% while the share of the first respondent stood at 90%. The first respondent sent letter to the appellant stating that several issues relating F to the firm had arisen; and that it was necessary to sort out those disputes by arbitration. The first respondent therefore appointed his arbitrator and called upon the appellant to appoint his arbitrator. The appellant replied stating that he had not signed the partnership deeds G dated 6.9.1991 or 19.5.2010 and the said documents were forged documents and not binding and therefore the question of appointing an arbitrator in terms of the said documents did not arise. The first respondent thereafter filed application under H BHARAT RASIKLAL ASHRA v. GAUTAM RASIKLAL 687 ASHRA & ANR. section 11 of the Arbitration and Conciliation Act, 1996 A alleging that disputes had arisen between appellant and first respondent, who were the partners of the second respondent firm governed by partnership deed dated 19.5.2000; and that clause 12 thereof provided for settlement of disputes by arbitration. He therefore prayed s that a sole arbitrator be appointed in terms of the arbitration agreement contained in the partnership deed dated 19.5.2000. The designate of the Chief Justice allowed the application under section 11 of the Act and appointed a sole arbitrator and left open the question c whether the two su
Excerpt shown. Read the full judgment & AI analysis in Lexace.