Barnali Mukherjee vs Rajia Begum

The appeal arises out of a final order passed on a petition for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996. The

disputes between the parties pertain to a jewellery shop in Suri. According to the respondent herein, who was the petitioner before the first court, she

was inducted as a partner of firm “R ddhi Gold†by a document dated April 17, 2007. The appellant herein completely disowned such document.

The appellant not only challenged the document of April 17, 2007 relied upon by the appellant in the first court as to its existence, but also relied on

several other documents from which it would be evident that the purported deed of April 17, 2007 could not have been in existence or, at any rate, had

not been acted upon at any point of time or within any reasonable time of its alleged execution.

The admitted position is that the appellant along with one Raihan Ikbal and another Sk Aftabuddin set up a partnership business on December 1, 2005

by the name of “R ddhi Goldâ€. The respondent herein is the wife of Sk Aftabuddin. The case run by her in the first court was that by the deed of

April 17, 2007, the mother-in-law of the appellant herein along with the respondent herein were inducted into the partnership firm originally started on

December 1, 2005 while Raihan Ikbal and Sk Aftabuddin resigned or retired therefrom. It was the further case of the respondent herein before the

first court that despite the execution of the questioned document of April 17, 2007, the respondent had not been allowed to participate in the business

or be privy to its accounts or obtain any profits or benefits therefrom. An initial order was passed ex parte on December 15, 2017 whereupon

affidavits were filed.

In the affidavit used by the appellant before the first court, several virtually unimpeachable documents were relied upon, primarily correspondence

between the firm and its bankers or between the partners of the firm and the bankers. In several of the letters addressed to the bank and received

from the bank, including those which bear the names or signatures of both the respondent herein and her husband Sk Aftabuddin, the respondent

herein is referred to as a mere guarantor though the original partners of firm “R ddhi Goldâ€, including Sk Aftabuddin, are referred to as partners

of the firm. Some of these letters are of the year 2010 or even thereafter. If the letters addressed by the bank to the said firm or its partners or the

letters addressed by the firm or its partners to the bank were to be given credence, the purported deed set up by the respondent could not have been

accepted.

However, despite the court of the first instance referring to the documents relied upon by the appellant herein (indeed, the page numbers of the

documents are specifically referred to in the order), the judge did not refer to the nature of the documents or the purpose for which the documents

were cited. More alarmingly, the judge recorded that no decision could be pronounced on the merits or even the existence of the questioned document,

but proceeded immediately thereafter to accept the validity of the purported deed of April 17, 2007. The court of the first instance failed to discharge

its duty of referring to the documents relied upon by the appellant herein to ascertain the genuineness of the purported deed set up by the respondent.

It is the common case on either side that when the very existence of an arbitration agreement or the very existence of a document containing an

arbitration agreement is in question, that must be decided in court. Usually, such a dispute arises upon a request being made by a party under Section

11 of the Act to the Chief Justice or his designate and the other party denying the existence of the document. By virtue of the dictum in the judgment

reported at (2005) 8 SCC 618 (SBP & Co. vs Patel Engg. Ltd.), such issue has to be decided conclusively by the Chief Justice or his designate. The

parties have relied upon the judgments reported at (2012) 2 SCC 144 and (2016) 14 SCC 126 for the same proposition.

The difficulty, really, is when a petition for interim measures under Section 9 of the said Act is carried to a court and the respondent to the

proceedings denies the existence of the arbitration agreement which is relied upon by the petitioner. The power of a court under Section 9 of the said

Act is limited. The proceedings are in aid of the reference and primarily to preserve the subject-matter of the dispute between the parties. In such a

scenario, it may not be possible for any conclusive opinion as to the physical existence of a document to be pronounced upon by such court. However,

this does not absolve the court of its obligation to render a prima facie view on the existence of the arbitration agreement or the document containing

the arbitration agreement upon giving cogent reasons in support thereof.

It would not do, as was done in this case by the court of the first instance, for the judge to make a sweeping unreasoned statement that the arbitration

agreement was valid and the relevant document had been executed by the parties. When the very existence of the arbitration agreement is questioned

by relying on cogent evidence, it is the duty of the court to sift through the evidence and give a reasoned decision, if only prima facie, as to the

existence or validity of the arbitration agreement. It is a jurisdictional fact which has to precede the exercise of the substantial jurisdiction by the court

in the matter.

In the present case, the many other documents which were relied upon by the appellant herein went to demonstrate that the purported deed of April

17, 2007 may either not have been in existence or may not have been given effect to. In either case, the arbitration agreement did not really become

effective. Even without considering such aspect of the matter, the order impugned cannot be sustained on the simple ground that it was the admitted

case of the respondent herein that for a period of more than ten years after the purported execution of the document of April 17, 2007 she had not

been allowed any access to the partnership business or its books of accounts or given a share of its profits. If a party had not been diligent enough to

protect her interest for a period of ten years, the party could not have come to court and expected any positive order by way of interim measure.

Since it is evident that the court of the first instance in the present case failed to take relevant considerations into account while coming to an

unreasoned tentative finding that the purported deed of April 17, 2007 had been executed by the parties, such order cannot be sustained. However, it

is made clear that the views expressed herein are tentative and should not prejudice the respondent herein in other proceedings that the respondent

may institute or may already have instituted. The opinion expressed herein is confined to the impugned order.

Accordingly, FMAT 169 of 2018 and CAN 1735 of 2018 are allowed and the judgment and the order impugned dated February 3, 2018 are set aside.

The interim protection granted to the respondent in course of the present appeal stands vacated. It is submitted on behalf of the appellant that

subsequent orders have been passed by the court of the first instance in aid of the order dated February 3, 2018. Such subsequent orders will be of no

effect and the court of the first instance should refrain from passing any further directions in the matter. The original of the document dated April 17,

2007 may be obtained by Advocate for the petitioner in the first court upon leaving behind a photocopy thereof duly countersigned. There will be no

order as to costs.