Second appeal challenging rejection of Section 8 application referring dispute to arbitration. Bench held arbitration clause in partnership. Deed did not bind plaintiffs 2 and 3 or defendant 5 who lent money individually. Appeal dismissed.
Appeal dismissed as being devoid of merit. Section 8 application rejection stands affirmed.
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NC: 2026:KHC:9953-DB MFA No. 587 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF FEBRUARY, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND
THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO. 587 OF 2026 (AA)
BETWEEN:
Digitally signed by NIRMALA DEVI Location: HIGH COURT OF KARNATAKA
…APPELLANTS
(BY SRI. RAVINDRANATH K, ADVOCATE)
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AND:
SL.NO.1 TO 3 ARE RESIDING AT NO.224/12, 6TH MAIN, 8TH CROSS, BEML 5TH STAGE, RAJARAJESWHARI NAGAR, BENGALURU-560098.
…RESPONDENTS
(BY SRI. ROOPESHA B, ADVOCATE FOR R1 TO R3)
HC-KAR
THIS MFA IS FILED U/S.37(1)(a) OF THE ARBITRATION AND CONCILIATION ACT, 1996, AGAINST THE ORDER DT.21.11.2025 PASSED ON IA.NO.1 IN OS.NO. 8344/2023 ON THE FILE OF THE XXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, REJECTING THE IA.NO.1 FILED U/S 8(1) OF THE ARBITRATION AND CONCILIATION ACT, 1996.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE C.M. POONACHA)
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Nos. 4 and 5] for recovery of a sum of `46,77,436/- together with 24% p.a.
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proprietorship concern of defendant No.5 on the instructions of defendant No.1.
33,52,690/-. Hence, they filed the suit for recovery of the said amount together with interest. The suit was filed for recovery of the said sum together with interest up to the date of the suit. Hence, the suit was filed claiming a sum of 46,77,436/- together with future interest at 24% pa.HC-KAR
contained an arbitration clause, where the said parties had agreed to resolve the disputes by arbitration. The said defendants contend that the amounts paid by the plaintiffs were in the course of business carried out by the partnership firm.
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agreed to be shared between defendant Nos.1 to 4 and the plaintiff No.1 in the ratio of 34.56%:13.392%:24.048%:18.00%:10.00% respectively. Clause 20 of the Partnership Deed dated 05.05.2021 stipulated that "all disputes arising out of this partnership shall be subject to arbitration and shall be decided in accordance with Arbitration and Conciliation Act, 1996". Both the Partnership Deed dated 05.05.2021 and the Deed of Admission dated 23.08.2021 were not registered.
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the said plaintiffs have been joined in the suit to overcome the arbitration agreement. The appellants have failed to demonstrate that the findings of the Commercial Court are in any manner erroneous and liable to be interfered with by this Court in the present appeal. Accordingly, the present appeal is dismissed as being devoid of merit.
Sd/(VIBHU BAKHRU) CHIEF JUSTICE
Sd/(C.M. POONACHA) JUDGE
nd/List No.: 2 Sl No.: 16
3 issues framed by the court
Whether the Special Infused Commercial Court commination rejection of Section 8 application can be challenged.
Whether the plaintiffs specifically transferred the amounts to the partners of the partnership or whether it is for the business of the firm.
Whether the arbitration clause in the partnership deed binds all parties including the plaintiff and defendant number 2 and 5 who are not partners of the firm.
2 provisions across 1 enactments
DR. SRINIVAS BOJANAPU
SMT. PRATHIMA K.N
SMT. DEEPALI N.V
Dr. KRISHNA
DR. LALITHA.J
SMT. SWARNALATHA
VIBHU BAKHRU
C.M. POONACHA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court