Allowed

Mr. Basant Goel v. Mr. Yogesh Kumar. C

Karnataka HC24 Sept 2024CMP/185/2024

Case brief

AI extract

What is this about?

Civil Miscellaneous petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator for a partnership dispute. The court allowed the petition and appointed a retired High Court judge as the arbitrator after parties failed to agree.

What did the court decide?

Civil Miscellaneous petition allowed. Hon'ble Sri. Justice Subhash B Adi, Former Judge, High Court of Karnataka appointed as sole arbitrator.

Mr. Basant Goel Vs Mr. Yogesh Kumar. C — Company and Corporate | Karnataka HC (2024)

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 24^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE ASHOK S.KINAGI

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CIVIL MISC. PETITION NO. 185 OF 2024

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BETWEEN:

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MR. BASANT GOEL AGED ABOUT 37 YEARS, SON OF RAKESH KUMAR GOEL

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SMT SEEMA GOEL AGED ABOUT 34 YEARS, WIFE OF MR. BASANT GOEL

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BOTH ARE R/AT NO. 3061 ONE BANGALORE WEST APARTMENT, NO. 1, DR. RAJKUMAR ROAD, RAJAJINAGAR, BENGALURU-560010.

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Digitally signed by R DEEPA Location: HIGH COURT OF KARNATAKA

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…PETITIONERS (BY SRI. MAHESH ARKALGUD SRIKANTH VAMSHI KRISHNA, ADVOCATE)

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AND:

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MR. YOGESH KUMAR. C AGED 41 YEARS, SON OF LATE CHANDRASHEKAR C PRESENTLY R/AT D1 NITHIN HEIGHTS APARTMENTS, 2^ND A CROSS ROAD, DATTATREYA NAGAR, HOSAKEREHALLI, BENGALURU-560085.

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…RESPONDENT

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(BY SRI. ASHIK G SWAMY, ADVOCATE)

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT HON'BLE (RETD.) JUSTICE K.N.KESHVANARAYANA FORMER JUDGE OF THE HON'BLE HIGH COURT OF KARNATAKA (OR) ANY ARBITRATOR FROM THE PANEL OF ARBITRATORS, ARBITRATION AND CONCILIATION CENTRE, KHANIJA BHAVANA, BENGALURU AS A SOLE ARBITRATOR IN TERMS OF CLAUSE 20 OF THE RECONSTITUTION DEED DATED 1.4.2021 (ANNEXURE-D) TO RESOLVE THE DISPUTES THAT HAVE ARISEN.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI

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ORAL ORDER

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This Civil Miscellaneous petition is filed under Section 11(6) of Arbitration and Conciliation Act, 1996 (for short 'the Act, 1996'), for appointment of an Arbitrator to resolve the dispute arisen between the petitioners and the respondent in terms of Clause 20 of the Deed of Reconstitution of partnership dated 01.04.2021 vide Annexure-C.

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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Brief facts leading rise to filing of this petition are as follows:

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The petitioners are entrepreneurs and engaged in the business of manufacturing casual and industrial footwear. In the year 2017, the petitioners started a firm by the name Decima Industries for the purpose of carrying on business. In due course of time, in the year 2021, they restructured the said firm. The respondent was inducted as a partner. The partnership was further restructured only with regard to the equity holding of the petitioners and the respondent in 2022. Petitioner No.1 was in charge of the manufacturing and production of the footwear. The respondent was in charge of marketing and business generation. In due course of time, disputes and differences arose between the petitioners and the respondent with regard to the functioning of the firm. As the disputes arose between the parties, several cases were filed against each other before various Courts with regard to the prevailing disputes. Despite best efforts in the mediation, the disputes did not resolve and the mediation was declared

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4 - NC: 2024:KHC:39594 CMP No. 185 of 2024

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as failure. As the disputes were not resolved between the parties, the petitioners issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996 explaining the disputes between the parties and had sought for reference of the disputes to the sole arbitrator in terms of Clause 20 of the agreement dated 01.04.2021. The respondent issued a reply to the notice nominating an arbitrator. As the parties could not arrive at a common consent in appointment of an arbitrator to resolve the disputes that has arisen between the parties, filed this petition.

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Heard the learned counsel for the petitioners

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and also learned counsel for the respondent.

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Learned counsel for the petitioners submits that the petitioners and the respondent restructured the partnership firm and the respondent was in charge of marketing and business generation. As disputes and difference arose between the petitioners and the respondent with regard to functioning of the firm. He submits that if any dispute arose between the parties the

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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matter has to be resolved through an arbitrator as per the partnership deed dated 01.04.2021. She submits that a notice was issued to the respondent nominating the name of the arbitrator, but the respondent replied to the arbitration notice agreeing to appoint an arbitrator but both of them did not arrive at a common consent in appointment of an arbitrator. Hence, on these grounds, he prays to allow the petition.

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Learned counsel for the respondent submits no objection to appoint an arbitrator to resolve the dispute arose between the petitioners and the respondent.

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Perused the records and considered the

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submissions of the learned counsel for the parties.

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The point that arise for consideration is as

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follows:

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i) Whether the petitioner has made out a ground to refer the matter to the arbitration in terms of clause 20 of the Partnership Deed dated 01.04.2021 to resolve the dispute arose between the petitioner and the respondent as per the

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6 - NC: 2024:KHC:39594 CMP No. 185 of 2024

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provisions of Arbitration and Conciliation act, 1996?

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It is not in dispute that, the petitioners and the

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respondent reconstructed the firm and the respondent was inducted as a partner into the said firm vide partnership deed dated 01.04.2021. The petitioners are in charge of manufacturing and production of footwear and the respondent was in charge of marketing and business generation. The disputes and differences arisen between the petitioners and the respondent with regard to the functioning of the firm.

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As per Clause 20 of the Partnership Deed dated

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01.04.2020, which reads as under:

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"20. If during the continuance of the partnership or at any time there after, any dispute, difference or question shall arise between the partners, then every such dispute, difference or question shall be referred to ARBITRATORS to be appointed by each party or their umpire pursuant to the Indian Arbitrations Act, 1940 or any statutory modification thereof for the time being in force."

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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After perusal of Clause 20 of the deed dated 01.04.2020 is discloses that, every dispute, differences or question shall be referred to the sole arbitrator to be appointed by each party pursuant to the Indian Arbitrations Act, 1940 or any statutory modification thereof for the time being in force.

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Admittedly, several cases are pending between the petitioners and the respondent before the various courts with regard to the prevailing disputes. The petitioners got issued an arbitration notice vide AnnexureD dated 09.10.2023 proposing the name of an arbitrator. The respondent replied to the arbitration notice vide Annexure-E dated 22.11.2023, wherein the respondent did not consent to the nomination made by the petitioners and the respondent has suggested the name of Sri Justice John Michael Cunha, Retired Former Judge, High Court of Karnataka for which, the petitioners did not confirm to the nomination of an arbitrator proposed by the respondent. Admittedly, there exist a partnership deed between the

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NC: 2024:KHC:39594 CMP No. 185 of 2024

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petitioners and the respondent and also there exist an arbitration clause and disputes arisen between the petitioners and the respondent and the same has to be resolved by an arbitrator. In view of the above discussion, the petitioner has made out a ground to refer the matter to the arbitrator.

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In view of the above discussion, I proceed to pass the following:

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ORDER

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i. The Civil Miscellaneous petition is allowed .

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ii. Hon'ble Sri. Justice Subhash B Adi, Former Judge, High Court of Karnataka is appointed as an Arbitrator to resolve the dispute between the parties.

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iii. Office is directed to forward the copy of this order to Hon'ble Sri. Justice Subhash B Adi, Former Judge High Court of Karnataka and to the Arbitration Center, Bengaluru.

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Sd/(ASHOK S.KINAGI) JUDGE

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SSB

Mr. Basant Goel v. Mr. Yogesh Kumar. C

Case brief

What is this about?

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Mr. Basant Goel v. Mr. Yogesh Kumar. C

Case brief

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