1 2025:CGHC:49650 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 17 of 2025 1. Ashish Gupta S/o Anant Kumar Gupta, Aged About 44 Years, R/o 26, Kila Ward, In Front of Library, Juna Bilaspur, Tehsil and District - Bilaspur, Chhattisgarh 2. Arvind Kumar Gupta S/o J. R. Bani Aged About 50 Years R/o Near Shiv Hanuman Temple, Tilak Nagar, Bilaspur, Tehsil and District - Bilaspur (C.G.) ... Applicants versus Amit Kumar Mishra S/o Ramashankar Mishra R/o Bhandari Plot, Near Satbahiniya Temple, Bandhwapara, Bilaspur, Tehsil and District Bilaspur, Chhattisgarh ... Respondent For Applicants : Mr. Chandresh Shrivastava, Advocate. For Respondent : Mr. Hemant Kumar Agrawal, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 06.10.2025 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The applicants have prayed for the following relief(s): a. Appoint any independent and qualified person as the sole Arbitrator as per the provisions of Arbitration and PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.10.08 18:33:20 +0530 2 Conciliation Act, 1966 in light of clause 24 of Partnership Deed dated 22.12.2017 (Annexure A-1); b. Pass any such other order as the Hon’ble Court may deem fit and proper in the facts and circumstances of the instant case.” 3. The facts, in brief, as projected by the applicant are that the applicants entered in a partnership deed with respondent on 22.12.17 under the business arrangement for running of "Loknath Medical Store". As per the terms of the agreement the respondent will have to commence the Business Operation of Hospital and Nursing in the month of January 2018 and as the same requires pharmacy services in accordance with applicable laws and regulations the partnership deed dated 22.12.2017 was entered between the applicants and respondent. It is submitted that as per the said deed the applicants individually and collectively were referred as "the Pharmacy" and the respondent was alternatively referred as "the Facility and for Loknath Hospital" and the business arrangement amongst them was referred as "Loknath Medical Store". The agreement was entered making the provision of Pharmacy Services available for the respondent. It is submitted that the profit and losses of the partnership firm were as agreed in the ratio of 30:30:40 amongst the applicant No.1, applicant No.2 and the respondent respectively. It was agreed that since the Facility/Non-applicant was granting exclusive rights of providing medicinal aid to the Pharmacy/Applicants an amount of Rs 33,07,000/- was to be deposited by the applicants which shall be refundable on 31.03.2020 or at the time of termination of agreement whichever is earlier. It is relevant to mention that the said amount of Rs.33,07,000/- was already 3 given to the non-applicant as per the Annexure-1 attached with the said agreement and signed by the parties. 4. It is further submitted that apart from the said amount of deposit as per the direction of the respondent, the applicants have also made payment towards the earnest money deposit for an amount of Rs.16,93,000/- and for which also a receipt in form of affidavit was also sworn by the respondent. In the aforesaid background where the applicants have deposited huge amount of Rs.50,00,000/- for providing the Pharmaceutical services and have also made all the arrangements establishing the same however the respondent despite receiving the entire amount have not initiated the management of Hospital. Whenever the applicants made request to the non-applicant in this regard only false assurance was made for starting of the Hospital however neither as per the assurance the Hospital started running nor the amount paid by the applicants was refunded. 5. In the aforesaid background though the notice of arbitration was received by the respondent, however, instead of getting the matter settled, the respondent sent reply to the legal notice denying all the contentions of the applicants and suggesting another new name as Arbitrator vide reply dated 12.02.2025. It is submitted that since the parties in terms of the agreement could not mutually agree for the appointment of arbitrator with their consent and thus the applicants are before this Court for its kind indulgence seeking appointment of an independent and impartial arbitrator for settlement of disputes between the parties. The applicants have not filed any other petition for appointment of arbitrator under the agreement nor the claim of the 4 Applicants is barred by law of limitation and the present application is bonafide which requires appointment of arbitrator in the interest of justice. 6. The applicants having left with no other option since the dispute has arisen, issued legal notice in terms of the agreement invoking arbitration for settlement of disputes as per Clause 24 of the partnership deed. It is relevant at this juncture to quote Clause 24 of the agreement which is as follows:- “24. Applicable Law/s and Settlement of Disputes: a) This agreement and the rights and obligations of the parties hereunder shall be construed and interpreted in accordance with Indian Substantive and Procedural law, applicable to agreements made and to be performed entirely therein. The parties shall attempt in good faith to resolve any dispute, difference or claim arising out of or in relation to this agreement through mutual discussion. In case it is not resolved within thirty (30) days from receipt of the written notice (setting out the dispute or claim) by the other party, the complaining party may issue a notice of reference, invoking settlement of such dispute through Arbitration. All disputes between parties shall be subject to exclusive jurisdiction of the Bilaspur, Chhattisgarh only. Arbitration: Any and all disputes ("Disputes") arising out of or in relation to or in connection with this Agreement between the Parties or relating to the performance or non-performance of the rights and obligations set forth herein or the breach, termination, invalidity or interpretation thereof shall be referred for arbitration in Bilaspur, India in accordance with the terms of Indian Arbitration and Conciliation Act, 1996 or any amendments thereof. The language used in the arbitral proceedings shall be in English. Arbitration shall be conducted by a sole arbitrator, who shall be appointed by the Company only." 7. Mr. Chandresh Shrivastava, learned counsel for the applicants submits that the parties under the agreement has failed to mutually settle the 5 dispute and further not been able to appoint an arbitrator as per agreement. Even after due notice to appoint the sole Arbitrator to adjudicate upon the matters of disputes and difference arise out of agreement respondent had not made payment as claimed as such the applicants are left with no other remedy except to approach this Court under Section 11(6) of the Arbitration and Conciliation Act, 1966. He has also relied upon the judgment passed by the Hon’ble Supreme Court in Office for Alternative Architecture v. Ircon Infrastructure and Services Ltd. in SLP(C) No. 28104/2023, decided on 13.05.2025. 8. Mr. Hemant Kumar Agrawal, learned counsel appearing for the respondent relying on the return filed on behalf of respondents, opposes this arbitration request application and submits that the partnership deed (AnnexureA/1) is related to regarding an unregistered firm namely "The Pharmacy". Hon'ble Supreme Court held in the many cases that the arbitral proceedings would not be maintainable at the instance of an unregistered firm having regard to the mandatory provisions contained in section 69 of the Indian Partnership Act 1932. The applicants did not submit any document regarding registration of the firm, therefore petition is not maintainable. At this juncture the respondent is mentioning Section 69 of the Indian Partnership Act 1932- “Section 69. Effect of non-registration- (1) No suit to enforce a right arising from a contract or conferred by this Act shall be institutes in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is 6 or has been shown in the Register of Firms as a partner in the firm. (2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm. (3)The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect,- (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909 (2 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realise the property of an insolvent partner. (4) This section shall not apply- (a) to firms or to partners in firms which have no place of business in 1 [the territories to which this Act extends), or whose places of business in 2[the said territories), are situated in areas to which, by notification under 3[section 56], this Chapter does not apply, or (b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882 (15 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceedings in execution or other proceedings incidental to or arising from any such suit or claim. 9. Mr. Agrawal further submits that it is crystal clear from the legal notice (Annexure A/3) of the applicants, they demanded Rs. 50,00,000/-from the respondent, and as per page 31 of the petition it is also clear that the so-called deposit dates are between 28.11.2016 to 14.10.2017. As per the Limitation Act, 1963 recovery of the money is attracted from Article 24, and limitation period is 3 years, it accrues from the period 7 when begins to run then the money was paid, therefore as per limitation act 1963, cause of action arose on 14.10.2017, and instant petition is filed on more than 7 years 4 months on 20.03.2025. Therefore present petition is barred by the limitation act 1963. As per clause 12 of the unregistered deed, financial liability of the facility is as under: “(b) The facility agrees to refund to the pharmacy a sum of Rs. 33,07,000/- up to 31 March 2020 or at the time of termination of the this agreement whichever is earlier. At this juncture mention here that as per article 54 the limitation act 1963, limitation period is 3 years, therefore as per also article 54 the limitation act 1963 present petition is barred by the limitation.” 10. Mr. Agrawal submits that the respondent was unemployed, by luring him and coaxing him to open Loknath Hospital, the applicants got a forged partnership. The applicants took the responsibility of all the expenses, management, building, arrangement etc., and a forged partnership deed made regarding in the name of the respondent. Whereas the respondent was appointed as salaried employed in Loknath Hospital. The respondent is not responsible for any clause or conditions of the so-called partnership deed dated 22.12.2017, and for any liability of any kind. He also submits that the respondent never took Rs. 33,07,000/-from the applicants, rather the respondent has become aware that the applicants were paying rent to the land lord of the building namely Mohit Kerketta. The respondent neither received any amounts through cheque nor in the form of cash, therefore he is not liable to pay any amount/money to the applicants. It is denied by the respondent that he neither received Rs. 33,07,000/- from the applicants or nor he directed to the applicants to pay Rs. 16,93,000/-. It is also denied by the respondent that the applicants had given Rs. 50,00,000/- 8 to the respondent in the name of firm. The present petition lacks merit and is filed by the applicants only with the intention to harass the respondent, as such, prays for dismissal of this arbitration request application. 11. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 12. Though the respondent has vehemently opposed the arbitration request petition, however, it is evident from bare perusal of the agreement dated 22.12.2017 (Annexure A/1) that the same has been signed by the respondent herein and clause 24 of the agreement provides for a mechanism of resolving the dispute through arbitration. As such, this Court is of the opinion that the dispute between the parties may be referred to the Sole Arbitration of any retired Judge of this High Court. 13. Accordingly, this Court appoints Hon’ble Mr. Justice N.K Agrawal, a retired Judge of this High Court, to act as the Sole Arbitrator for resolving the dispute between the parties before whom the respondent may raise all his objections, as has been raised herein. 14. The Registry is directed to communicate this order to Hon’ble Mr. Justice N.K. Agrawal in the proper address. 15. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 16. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) Chief Justice Preeti