A.R. No. 66 of 2014 (Mandodi M. Ibrahim Haji & Others v. Hashim C.H. & Others)

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **MONDAY, THE 22ND DAY OF JANUARY 2018 / 2ND MAGHA, 1939** ## **AR.No. 66 of 2014** ## **PETITIONERS** - **1 MANDODI M. IBRAHIM HAJI,** **S/O.LATE ABDURAHIMAN HAJI, 'RIJAS HOUSE', POST CHOMBAL VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE-673 308.** **2 V.P. YOUSUF HAJI, S/O.MAYANKUTTY, NADUVILAKANDIYIL HOUSE, POST MADAPPALLY COLLEGE, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 012.** - **3 NADUVILAKANDIYIL MUHAMMED SADIQUE,** **S/O.YOUSUF HAJI, NADUVILAKANDIYIL HOUSE, POST MADAPPALLY COLLEGE, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 012. (FIRST PETITIONER HIS OWN RIGHT AND AS AGENT OF PETITIONERS 2 & 3 UNDER DEED OF POWER OF ATTORNEY DATED 12TH JUNE 2012)** ## **BY ADVS.SRI.B.KRISHNAN** ## **RESPONDENTS** **1. HASHIM.C.H. S/O.MOIDU HAJI, RESIDING AT 'CHAITHANYA', POST MANDARATHOOR, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 105.** ## **2. KUNHAMMED N.K.** **S/O.THAYYIL MOIDU HAJI, RESIDING AT NADUKANDIYIL, POST VILLIAPPALLY, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 542.** **3. NOUSHAD THAYYIL, S/O.THAYYIL KUNHABDULLA, RESIDING AT THAYYIL, POST VILLIAPPALLY, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 542.** **4. RINAS THAYYIL, S/O.THAYYIL KUNHABDULLA, RESIDING AT THAYYIL, POSTVILLIAPPALLY, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 542.** **CONT...2** **AR.No. 66 of 2014** **5. M/S.NEW LIFE MEDICALS,** **(A FIRM UNDER THE INDIAN PARTNERSHIP ACT BY DEED OF PARTNERSHIP DATED 9-6-2012) BY MANAGING PARTNER KUNHAMMED N.K, S/O.THAYYIL MOIDU HAJI, RESIDING AT NADUKANDIYIL POST VILLIAPPALLY, VATAKARA TALUK, KOZHIKODE DISTRICT, KERALA STATE 673 542.** **R1,R2 & R5 BY ADV. SRI.C.P.MOHAMMED NIAS** **THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 22-01-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **Hr....** **AR.No. 66 of 2014** ## **APPENDIX** ## **PETITIONER(S)' ANNEXURES** - **ANNEXURE A TRUE COPY OF THE ARBITRATION AGREEMENT DATED 9TH JUNE 2012.** - **ANNEXURE B TRUE COPY OF THE NOTICE DATED 18TH JULY 2014. ANNEXURE C TRUE COPY OF THE DEED OF POWER OF ATTORNEY BY 2ND AND 3RD PETITIONERS IN FAVOUR OF THE FIRST PETITIONER.** - **ANNEXURE D TRUE COPY OF ACKNOWLEDGEMENT OF THE NOTICE BY THE FIRST RESPONDENT DATED 22-07-2014.** - **ANNEXURE E TRUE COPY OF THE POSTAL COVER WITH ENDORSEMENT OF INTIMATION.** - **ANNEXURE F TRUE COPY OF THE POSTAL COVER WITH ENDORSEMENT OF INTIMATION ON THE 3RD RESPONDENT.** - **ANNEXURE G TRUE COPY OF THE POSTAL ACKNOWLEDGEMENT OF THE NOTICE BY 4TH RESPONDENT DATED 21-07-2014.** - **ANNEXURE H TRUE COPY OF THE NOTICE OF REPLY BY RESPONDENTS 1,2 & 4 DATED 05-08-2014.** ## **RESPONDENT(S)' ANNEXURES** **ANNEXURE R1 A A TRUE COPY OF KACHEET DATED 08-06-2012 EXECUTED BY THE RESPONDENTS IN FAVOUR OF THE PETITIONERS/ RESPONDENTS.** **// TRUE COPY//** **P.S TO JUDGE.** **Hr....** ## **SHAJI P. CHALY, J.** ----------------------------------------------- ## **A.R. No.66 of 2014** ## **----------------------------------------------Dated this the 22[nd] day of January, 2018** ## **O R D E R** This arbitration request is made by the partners of a firm constituted as per Annexure A Partnership deed to resolve the alleged disputes arisen by and between the petitioners, and the respondents, who are also partners of the very same firm. The partnership was constituted for the purpose of conducting retail business in medicines with liberty to the partners by mutual consent to alter, expand or modify the above business or enter into any other business or businesses which can be carried out profitably. The duration of the partnership is agreed to be a Partnership at Will. The principal place and office of the firm was agreed to be situated at Door No.20/539, 540, Main Road, Opposite Bus Stand, Vadakara, Kozhikode – 673 101. All other terms and conditions with respect to capital, interest on capital, A.R. No.66 of 2014 2 profit and loss sharing, management, etc. etc. are recited to in Annexure A partnership deed. 2. Among other covenants, parties have agreed as per clause 18(1)(d), to resolve any dispute by resorting to the provisions of the Arbitration and Conciliation Act, 1996 in respect of interpretation or application of the provisions of Annexure A deed by an Arbitrator appointed mutually by the partners. According to the petitioners, dispute arose by and between the parties and thereupon, petitioners have issued Annexure B notice dated 18/7/2014 requesting to the respondents to accept the Arbitrator appointed by the petitioners and if the respondents do not agree, requesting to appoint any Arbitrator from the list provided in Annexure B viz., Advocates practising at Vadkara and Kozhikode. 3. Respondents 1, 2 and 4 issued a reply notice disputing the claims raised by the petitioners in respect of the alleged dispute that are arisen by and between the parties and also contending that, the issues raised in the A.R. No.66 of 2014 3 notice issued by the petitioners are questions of law to be decided by a civil court in a suit properly instituted relating to the title of the tenancy rights of the rooms. It is also stated thereunder that, tenancy right over the premises in which the business is being conducted exclusively belongs to respondents 1, 2 and 4 as per agreement dated 8.6.2012 and further that, the tenancy in respect of the premises do not form part of the assets of the firm. Yet another dispute raised is that, the partnership relates only to the business carried on in the premises, and necessary proceedings will have to be initiated by the landlord for eviction of rooms before the Rent Control Court if they want eviction of the premises held by the said respondents under the aforementioned agreement. 4. It is also disputed that, there is a dispute existing by and between the parties in order to appoint an arbitrator and conveyed that, the petitioners are not entitled to invoke the arbitration clause contained under Annexure A A.R. No.66 of 2014 4 partnership deed. It is in this background facts, petitioners have approached this court seeking to appoint an Arbitrator to resolve the dispute. 5. Respondents 1, 2 and 4 entered appearance through counsel. Even though notice is served on respondents 3 & 5, there is no appearance for and on behalf of the said respondents. Respondents 1, 2 and 4 have produced the rent agreement executed by and between the petitioners and them as Annexure R1(a) along with I.A. No.32/2017. 6. I have heard learned counsel for petitioners, learned counsel appearing for the aforesaid respondents and perused the pleadings and documents on record. 7. The subject issue to be considered in this request is whether the tenancy right is a subject matter of Annexure A partnership deed executed by and between the petitioners and the respondents, and if so, whether the issue in respect of the tenancy right can be decided by an Arbitrator. So also, whether any dispute is surviving by and between the A.R. No.66 of 2014 5 parties in order to appoint an Arbitrator to resolve the disputes. It is an admitted fact that, Annexure A partnership deed deals with carrying on business by and between the parties. Even though, the building in which the business is to be carried on is mentioned under Annexure A partnership deed, the tenancy right is not a subject matter of dispute by and between the petitioners and respondents. Clause 18(1) (d) of Annexure A read thus: “In the case of any dispute regards to the interpretation or application of the provisions of this deed the same shall be determined by an arbitrator appointed by the partners on mutual consent, in accordance with the provisions of the ARBITRATION AND CONCILIATION ACT 1996.” 8. Therefore, it is explicit and crystal clear that, the invocation of the arbitration clause arises when there is any dispute with respect to the interpretation or application of the provisions of the deed. Even though, the tenanted premises is shown in Annexure A partnership deed, the same cannot be termed as a clause liable to be interpreted with A.R. No.66 of 2014 6 respect to the business carried on by the partnership firm viz., the 5[th] respondent. 9. It is true, Annexure R1(a) agreement is executed by the petitioners who are apparently the owners of the building in question with respondents 1, 2 and 4 on 8.6.2012. Even though partnership deed is executed on 9.6.2012, i.e., the day after the execution of rent deed, it is not mentioned in Annexure A partnership deed that, the tenancy right vests with the partnership firm. Moreover, the Kerala Building (Lease and Rent Control) Act is a self contained statute received the assent of the President of India and the provisions of the said Act excludes the provisions contained in any other Act. The dispute with respect to a tenancy right can only be decided by the Rent Control Court in accordance with the provisions of the aforesaid Act. 10. In that view of the matter, I am of the considered opinion that, the subject matter of dispute in respect of the A.R. No.66 of 2014 7 tenancy right is not entitled to be considered by an Arbitrator. Even though learned counsel for petitioners have invited my attention to sub-section 6(A) of Section 11 of Arbitration and Conciliation Act, 1996, I am of the considered opinion that, sub-section 6(A) has come into force on and w.e.f. 23.10.2015 only by virtue of the Arbitration and Conciliation (Amendment) Act, 2015 and therefore, subsection 6(A) has only prospective operation. Sub-section 6(A) read thus: “The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or subsection (6), shall , notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.” 11. So also, Section 26 of Amendment Act, 2015 deals with the manner in which the provisions of the Amendment Act are to be dealt with, which read thus: “Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance A.R. No.66 of 2014 8 with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act.” 12. So far as the facts of the case on hand is concerned, Annexure B notice in accordance with section 21 of the Act, 1996 is issued as early as on 18.7.2014 i.e., much before the introduction of sub-section 6(A) of Section 11 of Act, 1996. Therefore, I have no hesitation to hold that, sub-section 6(A) of Section 11 of Act, 1996 will not apply to the case on hand. That apart I bear in mind the principles of law laid down by the Apex Court in **SBP and Co. v. Patel Engineering Ltd.** [(2005) 8 SCC 618] and **National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd.** [(2005) 8 SCC 618], wherein it is held that the preliminary issues that may arise for consideration in an application under section 11 of the Act can be divided into three categories, that is (I) issues which the Chief Justice or his designate is bound to decide (ii) issues which he can also decide, i.e., issues which he may choose to A.R. No.66 of 2014 9 decide; and (iii) issues which should be left to the arbitral tribunal to decide. Having evaluated the fact situation in the case on hand, with the principles of law so laid down, I am of the definite opinion that, the tenancy right is not a subject matter that can be left to be decided by the arbitrator. 13. However, from the tenor and terms of the contentions raised by the parties and the dispute raised in the notices it is clear that, there is a dispute manifestly pending by and between the petitioner and the respondents in respect of the interpretation or application of the terms by and between the parties as per Annexure A1 deed. Even though respondents have a case that the partnership is not dissolved, and therefore, there is no dispute subsisting by and between the parties for invocation of clause 18(1)(d) of Annexure A partnership deed, in my view the dispute raised with respect to the non-dissolution of the partnership by the respondents itself is a dispute liable to be resolved by an Arbitrator as agreed upon by and between the parties. A.R. No.66 of 2014 10 14. Therefore, I appoint Sri. Asokan.K., Retired District Judge, Asoka Gardens, Thuvacode Post, Chemanchery, Kozhikode – 673 304 as Arbitrator to resolve the dispute by and between the parties except the dispute in respect of the tenancy rights sought to be resolved by the petitioners. The Arbitrator may enter on reference and proceed in accordance with law. Arbitration request is disposed of accordingly. Sd/- **SHAJI P. CHALY** **JUDGE** smv 16.1.2018