LI Network
Published on: February 15, 2024 at 15:30 IST
The Madhya Pradesh High Court, under the jurisdiction of Justice Achal Kumar Paliwal, rejected a revision petition that sought to invoke Section 8 of the Arbitration and Conciliation Act, 1996.
The case centered around a dispute related to the transfer of cheques under a partnership deed. The High Court emphasized the need for prima facie evidence to interpret Section 8 invocation and ultimately dismissed the revision petition due to the lack of proof.
Mr. J.K. Sthapak (“Petitioner”) had entered into a partnership deed with Mr. Satish Kumar Saxena and Mr. Manish Saxena (“Respondents”).
Clause 22 of the partnership deed contained an arbitration clause concerning disputes arising from the firm’s business or the interpretation of subsequent provisions related to the firm and its business.
The Petitioner claimed that the Respondents issued three cheques totaling Rs. 22 Lakh, connected to the business of the firm and governed by Clause 9 of the partnership deed.
Allegedly, this amount represented the Petitioner’s share in the capital invested in the partnership firm.
Facing a dispute over this transaction, the Petitioner invoked Section 8 of the Arbitration and Conciliation Act in a Civil Court in Bhopal.
The application was dismissed, leading to an appeal in the District Court, which was also rejected. Dissatisfied, the Petitioner filed a revision petition in the Madhya Pradesh High Court under Section 115 of the CPC.
Respondents argued that there was no evidence demonstrating that the Rs. 22 Lakh transaction was related to the partnership’s business.
They contended that there was no prima facie proof indicating the amount was given in connection with any firm-related business.
The High Court noted that two cheques originated from the firm’s account, and one was issued from the Respondents’ account. Prima facie, the Court found no evidence indicating that Rs. 22 Lakh was transferred to the Petitioner from the firm’s account, thereby lacking proof of a connection to the partnership’s business.
Consequently, the High Court concluded that Clause 22 of the partnership deed, which allowed for arbitration in business-related disputes, did not apply in this instance.
Furthermore, the High Court scrutinized the Appellate Court’s order and determined that it considered the petitioner’s submissions and available documents.
Concluding that there were no grounds to interfere with the trial court’s order, the Appellate Court’s decision was deemed well-reasoned and thorough in assessing the facts and documents on record.
After a thorough review of the lower courts’ observations and decisions, the High Court found no illegality or perversity committed by them.
Consequently, the revision petition, seeking Section 8 invocation under the Arbitration Act, was dismissed.
Case Title: J.K. Sthapak vs. Satish Kumar Saxena and Anr.