Mukesh Sharma And Another vs Sanjeev Bhasin

1 This miscellaneous appeal filed under Section Jammu and Kashmir Arbitration and Conciliation Act 1997 (hereinafter referred to as the State Act of

1997) is directed against the order dated 25th August, 2017 passed by the 2nd Additional District Judge, Jammu (hereinafter referred to as the

‘Court below’) whereby the application moved by the appellants for interim relief under Section 9(ii)(a-e) of the State Act of 1997 has been

dismissed as ‘not maintainable’.

2 Facts, in brief, leading to the filing of this appeal are that a partnership deed came to be executed between the appellants and the respondent on

30.09.2014 for running partnership business i.e Restaurant, clause 10 whereof provided for resolution of any dispute that would have arisen between

the parties through arbitration to be conducted as per the provisions of Arbitration and Conciliation Act, 1996 ( for short ‘Central Act of 1996’)

or any statutory modification thereof. Owing to a dispute that had arisen qua the partnership, the appellants filed a civil suit for Dissolution of

Partnership before the Court of 3rd Additional Munisff, Jammu. The maintainability of the suit was opposed by the respondent by filing an application

under Section 8 of the Central Act of 1996. The said plea was accepted by the learned 3rd Additional Munisff, Jammu and vide order dated

21.02.2017, application filed by the respondent under Section 8 of the Central Act of 1996 was allowed and consequently, the plaint filed by the

appellants was rejected and the application filed for interim relief was dismissed.

3 Faced with the dismissal of his suit on account of availability of Arbitration clause in the partnership deed, the appellants filed an application under

Section 9(ii)(a-e) of the State Act of 1997 before the Court below. The maintainability of the application was opposed by the respondent taking, inter

alia, a plea that the parties were governed by the provisions of Arbitration and Conciliation Act 1996 (Central Act) and, therefore, the Courts in

Jammu and Kashmir had no jurisdiction to entertain the application for interim relief. The said plea in terms of the impugned order is accepted by the

Court below and the application of the appellants for interim relief filed in terms of Section 9(ii)(a-e) of the State Act of 1997 has been dismissed as

‘not maintainable’. It is against this order of the Court below, the appellants are before this Court.

4 The impugned order of the Court below is assailed, primarily, on the ground that the Court below has not appreciated the facts that the mention of

clause 10 of Arbitration and Conciliation Act 1996 was only a technical mistake and the parties all along intended to be governed by the State Act of

1997. In support thereof, it is contended that the parties reside and the subject matter of partnership i.e business of Restaurant is also located in the

then State of Jammu and Kashmir and, therefore, the parties could not have agreed to be governed by a law which was not applicable to them or to

the territories where the subject matter of partnership was situated. It is further the argument of the appellants that when the appellants filed a civil

suit before the Court of 3rd Additional Munisff Jammu, the respondent took shelter under Section 8 of the Act of 1996 and non suited the appellants

on the ground that the partnership deed executed between the parties contained an arbitration clause providing for resolution of the dispute under the

Central Act of 1996.

5 Learned counsel for the appellants submits that because of sheer machination and unfair stance taken by the respondent, the appellants have been

rendered remediless.

6 Per contra, it is contended on behalf of the respondent that since the parties were governed by the Central Act of 1996, as such, the application

under Section 9(ii)(a-e) of the State Act of 1997 was not maintainable. It is further brought to the notice of the Court that the appellants had also filed

an application under Section 11 of the State Act of 1997 for appointment of arbitrator, but the same was rejected by the nominated Judge on the

ground that the parties were governed by the Central Act of 1996 and, therefore, this Court had no jurisdiction to entertain the application and appoint

the arbitrator under the Central Act of 1996. Learned counsel for the respondent, therefore, supports the judgment of the trial Court on the aforesaid

reasoning.

7 Having heard learned counsel for the parties and perused the record, I am of the view that the issue, as to whether the parties are governed by the

Central Act of 1996 or by the State Act of 1997 in the instant case is no longer debatable in view of the judgment passed by this Court rejecting the

application of the appellants for appointment of arbitrator made under Section 11 of the State Act of 1997 (See: Mukesh Sharma and another vs.

Sanjeev Bhasin, decided on 19.02.2018 )

8 In that view of the matter, the trial Court was perfectly correct in coming to the conclusion that the application under Section 9 (ii)(a-e) of the State

Act of 1997 is not maintainable. However, I am in agreement with the learned counsel for the appellants that by sheer machination and unfair stand

taken by the respondent, the appellants cannot be non suited. It is true that the Central Act of 1996 was not applicable to the State of Jammu and

Kashmir prior to 30th October, 2019 when the J&K Reorganization Act 2019 came into operation. The application under Section 9 (ii)(a-e) of the

State Act of 1997 with which the parties had agreed to be governed was, thus, clearly not applicable. This exactly was held by the nominated Judge

while dismissing the application filed by the appellants for appointment of a Arbitrator in terms of Section 11 of the Act of 1997. However, the position

has now changed and with the coming into force of the J&K Reorganization Act 2019, the State Act of 1997 has been repealed and the Central Act

of 1996 has been made applicable to the Union Territory of J&K and Union Territory of Ladakh. In that view of the matter, the parties can now

invoke the provisions of Central Act of 1996 seeking redressal of their grievance.

9 For the foregoing reasons, I find no merit in this appeal and the same is, accordingly, dismissed. The order of the Court below, impugned in this

appeal, is upheld. However, it shall be open for the appellants to avail of the remedies which are now available under the Central Act of 1996. Nothing

said herein would come in the way of the appellants to invoke such remedies. The decisions by this Court whether it is on maintainability of application

u/s 11 or u/s 9 of the Central Act of 1996 are not rendered on merits and, therefore, there shall be no bar to invoke the remedies now available to

parties in view of change of legal landscape on the coming into force of J&K Reorganization Act, 2019 and applicability of Central Act of 1996 to the

Union Territory of Jammu and Kashmir and Ladakh.