LexRAHUL VERMA & ORS. versus RAMPAT LAL VERMA & ORS.
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[2025] 2 S.C.R. 1713 : 2025 INSC 296 Rahul Verma & Ors. v. Rampat Lal Verma & Ors. (Special Leave Petition (C) No. 4330 of 2025) 21 February 2025 [J.B. Pardiwala and R. Mahadevan, JJ.] Issue for Consideration Issue arose whether the legal heirs of a deceased partner in a partnership firm, being non-signatories to the partnership deed and in the absence of their explicit consent, can still be bound by the arbitration agreement; and whether the right to sue for the rendition of accounts survive to the legal heirs of the deceased partner, entitling them to invoke the arbitration clause in the partnership deed. Headnotes† Arbitration and Conciliation Act, 1996 – Arbitration agreement – Invocation of the arbitration clause in the partnership deed, by the legal heirs of a deceased partner in a partnership firm, being non-signatories to the partnership deed – Entitlement – Right to sue for the rendition of accounts to the legal heirs of the deceased partner – Availability: Held: Term ‘partners’ extends to and would include their legal heirs, representatives, assigns or legatees, etc – Persons claiming under the rights of a deceased person are the representatives of the deceased party, and thus, both the parties to the agreement and their legal heirs entitled to enforce an arbitral award and are bound by it – Existence of an arbitration agreement is not affected by the death of a party to the arbitration agreement – Thus, the right to sue for rendition of account also survives, ensuring that the legal representatives can assert or defend claims arising from the partnership agreement – On facts, since the legal heirs of the deceased partner, have stepped into the shoes of the deceased, the partnership agreement would operate to bind both the petitioners and the respondents – No error of law committed by High Court in passing the impugned judgment. [Paras 10-12] 1714 [2025] 2 S.C.R. Supreme Court Reports Case Law Cited Ravi Prakash Goel v. Chandra Prakash Goel & Anr. [2007] 4 SCR 295 : (2008) 13 SCC 667 – referred to. Jyoti Gupta v. Kewalsons & Ors., 2018 SCC OnLine Del 7942 – referred to. List of Acts Arbitration and Conciliation Act, 1996; Partnership Act, 1932. List of Keywords Legal heirs of a deceased partner in partnership firm; Non-signatories to partnership deed; Arbitration agreement; Right to sue for rendition of accounts; Invocation of arbitration clause in the partnership deed; Term ‘Partner’; Enforcement of arbitral award; Existence of arbitration agreement. Case Arising From EXTRAORDINARY CIVIL JURISDICTION: Petition for Special Leave to Appeal (Civil) No. 4330 of 2025 From the Judgment and Order dated 22.10.2024 of the High Court of Gauhati High Court in ARBA No. 6 of 2024 Appearances for Parties Adv. for the Petitioners: Ms. Shagufa Salim. Advs. for the Respondents: Pavan Kumar Chaturvedi, Nitish Kumar Since, Abhishek Raj, Amit Kumar Thakur, Pavan Kumar Chaturvedi. Judgment / Order of the Supreme Court Order 1. This petition arises from the judgment and order passed by the Gauhati High Court in Case No. Arb. A./6/2024 dated 22.10.2024 whereby the High Court allowed the appeal filed by the respondents herein under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (for short, “Act of 1996”) and thereby quashed and set aside [2025] 2 S.C.R. 1715 Rahul Verma & Ors. v. Rampat Lal Verma & Ors. the order dated 09.08.2024 passed by the Civil Judge (Sr. Div.), Dibrugarh in Misc. (J) Case No. 206/2024 arising out of Commercial Suit No. 02/2024 (“impugned judgment”). 2. We heard Ms. Shagufa Salim, learned counsel appearing for the petitioners and Mr. Pavan Kumar Chaturvedi, learned counsel appearing for the respondents. 3. This litigation originates from a dispute between a partner of a partnership firm consisting the legal heirs of another deceased partner. The partnership firm consisted of three partners. It so happened that two of them passed away on 24.12.2022 and 21.11.2023, respectively. It appears from the materials on record that the respondents herein (original defendants in Commercial Suit No. 02/2024) preferred a petition under Section 8 of the Act of 1996 as Misc. (J) Case No. 206/2024 in Commercial Suit No. 02/2024 before the Commercial Court, at Dibrugarh for dismissal of the suit and a reference to arbitration. The petition was filed on the basis of an arbitration clause in the partnership deed. The said petition was dismissed by
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