TMI Blog2008 (1) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... e plaintiff appellants to have the partnership deed dated 17.2.1992 declared as illegal, void and inoperative. The relief for such a declaration could only be granted by the civil Court and not by an arbitrator as they or Shri Rajendra Prasad Singh through whom the plaintiffs derive title, are not party to the said deed. The trial Court had, therefore, rightly held that the matter could not be referred to arbitration and the view to the contrary taken by the High Court is clearly illegal. There is no whisper in the petition dated 28.2.2005 that the original arbitration agreement or a duly certified copy thereof is being filed along with the application. Therefore, there was a clear non- compliance of sub-section (2) of Section 8 of 1996 Act which is a mandatory provision and the dispute could not have been referred to arbitration. Learned counsel for the respondent has submitted that a copy of the partnership deed was on the record of the case. However, in order to satisfy the requirement of sub-section (2) of Section 8 of the Act, defendant no.3 should have filed the original arbitration agreement or a duly certified copy thereof along with the petition filed by him on 28.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame and style of M/s Veena Theatres Pvt. Ltd. was formed by a deed of partnership on 25.12.1959 and the business of the firm was to book pictures with film distributors at various places and to get them screened or exhibited in the picture hall owned by M/s Veena Theatres Pvt. Ltd. The capital in the firm was invested by the members of the family of Shri Shatrughan Prasad Singh. Shri Rajendra Prasad Singh also subsequently became a partner of the firm by making investments and a deed of partnership was executed on 20.12.1972. The partnership was reconstituted on 21.5.1976, in which the share of Shri Rajendra Prasad Singh was 21% and on the death of Brij Mohan Prasad Singh, his widow Smt. Sona Devi was inducted as a partner and a fresh deed was executed on 13.1.1989 in which Shri Rajendra Prasad Singh continued to be a partner having 21% share. Shri Rajendra Prasad Singh died on 5.9.1992 leaving behind plaintiff nos.2, 3, 5 and 7, who are his grandsons, as his heirs. The wife and two sons of Shri Rajendra Prasad Singh had predeceased him. The case of the plaintiffs further is that the defendants fraudulently executed another partnership deed on 17.2.1992, in which Shri Rajendra Pras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition to the petitions dated 25.11.2004 and 16.12.2004, wherein it was averred that as the suit is of the year 1998, to avoid any chances of confusion, his earlier petitions may be treated to have been filed under Section 8 of the Arbitration and Conciliation Act, 1996. This petition was opposed by the plaintiff appellants. The trial Court dismissed the petition by the order dated 17.3.2005 mainly on the ground that as Shri Rajendra Prasad Singh (predecessor-in- interest of the plaintiffs) was not a party to the partnership deed which was executed on 17.2.1992, and as the main relief sought in the suit was that the said partnership deed dated 17.2.1992 was illegal and void, which question could only be decided by the civil Court, the dispute could not be referred to arbitration. The defendant No. 3 challenged the aforesaid order by filing a Civil Revision Petition which was allowed by the High Court by the impugned order dated 4.8.2005. The operative portion of the order passed by the High Court only says that the Court below has committed error in passing the impugned order. Accordingly, the impugned order is set aside and this civil revision is allowed. No specific order making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Mad 528(531), Rel. on; AIR 1952 SC 119, Ref. (Para 4). Accordingly, a dispute that the contract of which the arbitration clause forms an integral part is illegal and void is not one which the arbitrators are competent to decide under the arbitration clause although it is of sufficient amplitude to take in a dispute as to the validity of the agreement and in consequence a party to the contract is entitled to maintain an application under S. 33 for a declaration that the contract is illegal and that in consequence the proceedings taken thereunder before the arbitrators and the award in which they resulted were all void : AIR 1959 SC 1357, Rel. on. (para 13) Learned counsel has also submitted that the suit was filed on 1.8.1998 and defendant No. 2 having failed in his attempt to get the matter referred to arbitration, his son Sunil Kumar Singh (defendant No. 3) who was set ex-parte on 28.6.1999 moved the application for staying the suit under Section 34 of Arbitration Act, 1940 on 5.11.2004 and then moved the application giving rise to the order under challenge on 28.2.2005 and such an application having been moved after an inordinate delay, it was wholly improper on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the substance of the dispute, refer the parties to arbitration. (2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub- section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Sub-section (1) of Section 8 of the 1996 Act says that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. Therefore, for application of Section 8, it is absolutely essential that there should be an arbitration agreement between the parties. It is an admitted fact that neither Shri Rajendra Prasad Singh nor the plaintiffs are parties to the partnership deed dated 17.2.1992. There is no document as defined in Section 7 of 1996 Act which may contain the signature of either Shri Rajendra Prasad Singh or the plaintiffs. Similarly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says that the application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. As already stated in the earlier part of the judgment, defendant No. 3 had moved an application on 25.11.2004 under Section 34 of the Arbitration Act, 1940 for staying the proceedings of the title suit and for referring the matter to arbitration. He filed a supplementary petition to the aforesaid application on 16.12.2004. Herein also reference was made to Section 34 of Arbitration Act, 1940. Thereafter, he filed an application on 28.2.2005 praying that as the Arbitration Act, 1940 had been repealed and the suit is of 1998, to avoid any confusion, his earlier petitions may be treated to have been filed under Section 8 of the Arbitration Act, 1996. None of these petitions were accompanied by the original arbitration agreement dated 17.2.1992 or a duly certified copy thereof. In fact, there is no requirement of filing the original arbitration agreement or a duly certified copy thereof under Section 34 of Arbitration Act, 1940 and as such there was no occasion for defendant No. 3 to file the aforesaid documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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