2019 (4) TMI 458 - SC - Indian Laws

Appointment of arbitrator for resolving the Dissolution dispute between the partners - unregistered partnership - petition dismissed on account of bar contained under Section 69 (3) of the Partnership Act - Held that - The need to remand the case has occasioned because we find that the High Court did not decide the issue, which was the subject matter of the writ petition, keeping in view the law laid down by this Court in the case of Krishna Motor Service by its Partners vs. H.B. Vittala Kamath, 1996 (4) TMI 518 - SUPREME COURT . The High Court should have noticed the aforementioned decision and decided the question accordingly in the light of law laid down therein. The High Court unfortunately did not take note of the said decision and has thus committed an error requiring interference of this Court. The matter should be remitted to the High Court for deciding the writ petition afresh on merits keeping in view the law laid down by this Court in the case of Krishna Motor Service.

Summary

Issues:
1. Application under Section 20 of the Arbitration Act, 1940 based on a partnership deed.
2. Objection raised regarding the maintainability of the application due to unregistered partnership.
3. High Court's dismissal of the writ petition under Article 227 of the Constitution of India.
4. Consideration of the law laid down by the Supreme Court in Krishna Motor Service case.
5. Remand of the case to the High Court for fresh consideration.

Analysis:
The case involved an appeal against the High Court's judgment dismissing a writ petition filed by the appellants and upholding the order passed by the Civil Judge. The respondent had filed an application under Section 20 of the Arbitration Act, 1940, based on a partnership deed alleging disputes between the partners of "Gupta Bus Service." The appellants contended that since the partnership was unregistered, the application was not maintainable under Section 69(3) of the Partnership Act.

The Civil Judge overruled the objection and held the application maintainable, leading to the writ petition in the High Court. The Supreme Court, after hearing both parties, found that the High Court failed to consider the issue properly in light of the law laid down in the Krishna Motor Service case. As a result, the Supreme Court decided to remand the case to the High Court for a fresh decision on the writ petition based on the observations made.

The Supreme Court emphasized the importance of the High Court considering the law laid down by the Supreme Court in the Krishna Motor Service case while deciding the writ petition. The Court refrained from deciding the issue on merits itself and requested the High Court to dispose of the matter expeditiously within six months. The appeal was allowed, the impugned order was set aside, and the case was remanded to the High Court for a fresh decision on the writ petition in accordance with the law laid down by the Supreme Court.