- 1 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MRS JUSTICE M.G.UMA CIVIL MISC PETITION NO. 100010 OF 2024 (-) BETWEEN: SHRI. RATNAKAR S/O. RAMAYYA SHETTY, AGE: 59 YEARS OCC: BUSINESS, R/O: WARD NO. 2 MAHANTESH NAGAR, IN YARAGATTI TQ. DIST. BELAGAVI – 591129. …PETITIONER (BY SRI. SHREEVATSA HEGDE, ADVOCATE) AND: PRASHANT S/O. SUBBANNA SHETTY, AGE: 54 YEARS, OCC: BUSINESS, R/O: SOMWAR PETH, BAILHONGAL, BELAGAVI - 591102. …RESPONDENT (BY SRI. SHIVARAJ P. MUDHOL, ADVOCATE) THIS CMP IS FILED UNDER SECTION 11(5) & (6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO, APPOINT A ARBITRATOR UNDER SECTION 11(5) & (6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 AS PER THE DEED OF PARTNERSHIP DEED DATED 12.06.2008. THIS PETITION COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: CORAM: THE HON'BLE MRS JUSTICE M.G.UMA Digitally signed by V N BADIGER Location: HIGH COURT OF KARNATAKA, DHARWAD BENCH, DHARWAD - 2 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 ORAL ORDER 1. The petitioner has filed this petition under Section 11 (5) and (6) of the Arbitration and Conciliation Act, 1996 (for short the Act) seeking appointment of the Arbitrator as per the deed of partnership, dated 12.06.2008 to decide the dispute between the petitioner and the respondent. 2. Heard Sri. Shreevtsa Hegde, learned counsel for the petitioner and Sri.Shivaraj P Mudhol, learned counsel for the respondent. 3. It is the contention of the petitioner that the petitioner and respondent are partners of the registered firm by name M/s. V.S.Hosalli and Company, carrying on liquor business at Yaragatti. The petitioner was inducted as partner in the partnership firm as per the reconstitution of deed of partnership dated 12.06.2008. Recently, the petitioner came to know that, the respondent, behind the back of petitioner, forged the signature of the petitioner, - 3 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 and concocted the documents styled as reconstitution of deed of partnership, by inducting his wife as partner. It is stated that under the re-constitution of partnership dated 12.06.2008 in which the petitioner was inducted as a partner provides for reference of dispute to arbitration as per Clause 17. 4. On the other hand, the respondent contends that there was re-constitution of partnership on 16.10.2023, whereunder the petitioner has left the firm, and the wife of the respondent was inducted as a partner. However, this document dated 16.10.2023 is seriously disputed by the petitioner, on the ground that his signatures were forged by the respondent and he was never a party to the said deed. It is stated that the petitioner has filed criminal complaint against the respondent alleging forgery of his signatures. In the meanwhile, the petitioner has approached this Court seeking appointment of Arbitrator to decide the dispute between the parties. He prays for appointing a Charted - 4 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 Account practicing in Belgaum as an arbitrator, as the dispute involves consideration of accounts of the firm. 5. Learned counsel for the petitioner places reliance on the decisions of the Hon’ble Apex Court in Rashid Raza V/s. Sadaf Akhtar 1 and Avitel post Studioz Limited and Others V/s. HSBC PI Holdings (Mauritius) Limited 2 in support of his contention that, when there is a dispute between the partners on serious allegations of forgery, the Hon’ble Apex Court has laid down two tests to be conducted i.e. (i) does this plea permeate the entire contract and above all, the agreement of arbitration, rendering it void, or (ii) whether the allegations of fraud touch upon the internal affairs of the parties inter se having no implication in the public domain. 6. Placing reliance of these decisions, learned counsel for the petitioner contends that admittedly, there is a clause for referring the dispute to the arbitration in 1 (2019) 8 SCC 710 2 (2021) 4 SCC 713 - 5 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 both the deeds and therefore, the Arbitrator is competent to decide the dispute between the parties. 7. However, it is the contention of the respondent that the partnership firm is not a party to the petition and that the other partner, i.e., the respondent’s wife, is also not been arrayed as a party. Therefore, the petition is not maintainable. It is also contended that since the reconstitution of the partnership firm took place and the petitioner has already gone out of the firm, he has no locus standi to file the petition. 8. It is pertinent to note that the petitioner is not seeking any relief against the partnership firm. The allegation regarding forgery of signatures is against the respondent herein. Regarding the claim that the other partner is not made as a party, it must be noted that she is none other than the wife of the respondent, who was inducted as a partner under the disputed reconstitution of deed of partnership firm. Admittedly, re-constitution deed of partnership provides for settlement of dispute through - 6 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 Arbitration. If the test as suggested by the Hon’ble Apex Court in the decisions relied on by the learned counsel for the petitioner is applied to the facts of the present case. I do not find any hesitation to say that an arbitrator could go into the disputed question raised by the parties in the present case. The Apex Court in Avitel post Studioz Limited (supra) categorically re-iterated the position of law while deciding the issue that the scope of reference under Sections 8 and 9 is limited. It was also held that while Section 8 refers the referral court to look into the terms for prima facie existence of valid arbitration proceedings, Section 11 confirms the Court’s jurisdiction. 9. If the contention taken by the petitioner is considered in the light of these judgments, I am of the opinion that the petition is liable to be allowed for appointment of the Arbitrator to decide the dispute between the parties. It is made clear that the arbitrator appointed in the case is free to get implead any necessary - 7 - NC: 2025:KHC-D:5213 CMP No. 100010 of 2024 parties in the proceedings for the purpose of resolving the dispute. Accordingly, I proceed to pass the following: ORDER i. The *writ petition is allowed. ii. Sri. Nitin Nimbalkar, the Charted Accountant, Belagum is appointed as the Arbitrator to adjudicate the dispute between the parties. iii. Office is directed to communicate this Order to Sri. Nitin Nimbalkar, Prop. CA. M/s. Nitin Nimbalkar and Company, CTS.5697/A2#7/8, 2nd floor Amar Empire Goaves, Khanapur Road, Belagavi-590001, (Mobile No.9880100257) for proceeding further in the matter. iv. Registry is directed to return the original documents if any, produced by the parties after obtaining Photo copies of the same for the file. Sd/- (M.G.UMA) JUDGE VB List No.: 2 Sl No.: 3 Corrected vide chamber order dated 24.04.2025 Sd/- (MGUJ)