TMI Blog2009 (10) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... GMENT Tarun Chatterjee, J. Leave granted. 2. This appeal is directed against the final judgment and order dated 8 January, 2007, of the High court of Judicature at Madras in CRP No. 1246 of 2006, whereby the High Court had dismissed the civil revision petition filed by the appellant against the order dated 7 June, 2006, passed in IA No. 494 of 2006 (in OS No. 526 of 2006) by the 1st Addl. District Munsif at Coimbatore, wherein the appellant had prayed for appointment of an arbitrator. 3. The facts leading to the filing of this appeal which could be derived from the case made out by the appellants are summarized in a nutshell for the better understanding of the dispute at hand: 3.1 The appellant had entered into a partnership with the respondents on 7 April, 2003, to constitute a partnership firm for the purpose of carrying on the business of engineering works under the name and style of 'Maestro Engineers'. The abovementioned firm had initially commenced its functioning from the premises situated at 41, KPR Lay Out 5th Street, Nanda Nagar Singanallur, Coimbatore-5, (in short the 'suit premises'), which belonged to the father of the appellant. The appellant took a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to refer the matter to arbitration. The respondents subsequently filed a suit being OS No. 526 of 2006, under order 7, rule 1, of CPC, before the Court of the District Munsif of Coimbatore for a declaration that the appellant is not a partner of the respondent No. 1 (the firm herein) after 18 November, 2005, and to prevent him from causing any disturbance to the respondent No. 1 for its peaceful running by way of a permanent injunction. The appellant thereafter filed an application under section 8 of the Arbitration Act 1996, (hereinafter referred to as the 'Act') being 1A No.494 of 2006 in the Court of the District Munsif at Coimbatore on 12 March 2006, which was rejected by his order dated 7 June, 2006. Feeling aggrieved by the aforesaid order, the appellant filed a civil revision case being CRP (PD) No. 1246 of 2006 along with a petition for stay being MP No. 1 of 2006 in the High Court of Judicature at Madras. The High Court, by its order dated 8 January, 2007, affirmed the aforesaid order of the District Munsif at Coimbatore and dismissed the civil revision petition and also the petition for stay filed by the appellant. It is against this order of the High Court in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act had been complied with to the satisfaction of the court. 5. The learned counsel for the respondents further argued that the subject matter of the suit being OS No. 526 of 2006 was a different one and it was not within the ambit of the arbitration clause of the partnership deed dated 7 April, 2003, and that the partnership deed had ceased to exist after the firm was reconstituted due to the alleged retirement of the appellant. Therefore, the trial court was justified in not referring the matter to the arbitrator. The appellant had, on the other hand, contended that the subject matter of the suit was within the ambit of the arbitration clause since, according to him, the dispute related to his retirement and the settlement of his dues after he was deemed to have retired according to the respondents. Further, it was his contention that the partnership deed dated 6 December, 2005, was not a valid one as it was not framed in compliance with the requirements under the Partnership Act. Therefore, the argument of the respondents that the subject matter of the suit did not fall within the ambit of the arbitration clause of the original partnership deed dated 7 April, 2003, cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llegations pertaining to fraud and malpractices were raised, then the matter must be tried in court and the arbitrator could not be competent to deal with such matters which involved an elaborate production of evidence to establish the claims relating to fraud and criminal misappropriation. 7. In our opinion, the contention of the respondents relating to the jurisdiction of the arbitrator to decide a dispute pertaining to a matter of this proportion should be upheld, in view of the facts and circumstances of the case. The High Court, in its impugned judgment, has rightly held mat since the case relates to allegations of fraud and serious malpractices on the part of the respondents, such a situation can only be settled in court through furtherance of detailed evidence by either of the parties and such a situation cannot be properly gone into by the arbitrator. 8. Reliance was placed by the learned counsel for the appellant on a decision of this court in the case of Hindustan Petroleum Corpn. Ltd. v Pinkcity Midway Petroleums (2003) 4 Comp Lj 311 (SC): (2003) 6 SCC 503, wherein this court in paragraph 14 observed: "If in an agreement between the parties before the civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 provides that where the judicial authority before whom an action is brought in a matter, will refer the parties to arbitration the said matter in accordance with the arbitration agreement. This, however, postulates, in our opinion, that what can be referred to the arbitrator is only that dispute or matter which the arbitrator is competent or empowered to decide." 12. The learned counsel for the respondent further elaborated his contention citing the decision of the High Court of Judicature at Madras in the case of Oomor Sail HG v Asiam Sait (2001) 3 CTC 269 (Mad), wherein it was held: "Power of civil court to refuse to stay of suit in view of arbitration clause on existence of certain grounds available under 1940 Act continues to be available under 1996 Act as well and the civil court is not prevented from proceeding with the suit despite an arbitration clause if dispute involves serious questions of law or complicated questions of fact adjudication of which would depend upon detailed oral and documentary evidence. ..Civil court can refuse to refer matter to arbitration if complicated question of fact or law is involved or where allegation of fraud is made Allegations reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot absolve himself from the mandatory requirement of filing an original copy of the deed. The learned counsel for the appellant, however, argued that since the notarized copy of the deed was already filed by the respondents before the 1st Addl. District Munsif Court at Coimbatore, there was no need for the appellant to produce the same. Learned counsel for the appellant cited various decisions to substantiate his I claim. But from a careful perusal of the order of the 1st Addl. District Munsif Court at Coimbatore, in IA No. 494 of 2006 (in OS No. 526 of 2006) it would be evident that the learned Munsif had noted that the appellant had filed a Xerox copy of the partnership deed dated 7 April, 2003 and had not filed the original copy thereof. Further, Ex-P23 is the notarized copy of the partnership deed dated 6 December, 2005, which was the reconstituted deed formed after the alleged retirement of the appellant from the firm. The learned counsel for the appellant pointed out to this deed and argued that since the original copy of this deed was filed by the respondents, there was no need for him to file the original copy thereof under section 8(2) of the Act. But it is to be noted h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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