IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD 917 ARBITRATION APPLICATION NO. 3 OF 2025 GOPAL GANGABISAN MANIYAR AND OTHERS VERSUS RAHUL RAMESHWAR MANIYAR AND ANOTHER ... Mr. A. P. Bhandari, Advocate for Applicants Mr. S. V. Lohiya, Advocate for Respondent Nos. 1 and 2. CORAM : R. M. JOSHI, J. DATE : 24th SEPTEMBER, 2025 P.C. :- 1. This Application is for appointment of Arbitrator invoking clause 6 of Section 11 of the Arbitration and Conciliation Act (for short ‘the Act’). 2. The facts which needs re-production for the purpose of deciding the Application read thus:- (i) There is a deed of partnership entered into between the Applicant and Respondent on 01/09/2004. The factum of execution of the deed of partnership and correctness of the clauses therein is not in dispute. Clause No. 19 of the deed provides for arbitration for settlement of the disputes between parties. Applicants issued notice dated 01/12/2023 for dissolution of the partnership firm. This notice was responded by the Respondent on 05/12/2023 opposing contentions of the Applicants. There was exchange of rejoinder and reply between 917 ARB 3.2025.odt 1 of 9 2025:BHC-AUG:26717 parties thereafter. Since the applicants have proposed the name of Arbitrator or to be appointed as Arbitral Tribunal and there was no response from the Respondent No.1 in this regard, present Application came to be filed. 3. Learned Counsel for the Applicants submits that the Court while deciding the Application under Section 11 of the Act is prima facie required to consider as to whether there exits an arbitration agreement between the parties and the dispute is arbitrable. It is his contention that this Court is not expected to get into the adjudication of the dispute between the parties with regard to the arbitrability of the dispute and same needs to be considered and adjudicated upon the by the arbitral Tribunal. It is his submission that since there is invocation of clause No. 19 by notice dated 05/12/2023 and there being no response thereto by the Respondent No.1 and as prima facie this is a case involving dispute which is arbitrable nature, Application be allowed. 4. Learned Counsel for the Respondents vehemently opposed the Application firstly on the ground that the Application sought to be made is barred by limitation. In this regard it is sought to be contended by relying upon the statements made in the notice dated 01/12/2023 that there was a cancellation of power of attorney issued in favour of the Respondent in the year 2017. Thus, it is contended that the period of limitation for raising any dispute in that regard would come to an end 917 ARB 3.2025.odt 2 of 9 after three years. It is his submission that rather than considering the title of the notice, Court is required to consider the breaking point between the parties and it shall be treated as the date of cause of action. In order to support his submission, he placed reliance on the judgment of the Hon’ble Supreme Court in case of Geo Miller and Company Private Limited Versus Chairman, Rajasthan Vidyut Utpadan Nigam Limited1. A reference is made with observations made by the Hon’ble Supreme Court in paragraph Nos.28 and 34 of the said judgment, which reads thus; “28. Having perused through the relevant precedents, we agree that on a certain set of facts and circumstances, the period during which the parties were bona fide negotiating towards an amicable settlement may be excluded for the purpose of computing the period of limitation for reference to arbitration under the 1996 Act. However, in such cases the entire negotiation history between the parties must be specifically pleaded and placed on the record. The Court upon careful consideration of such history must find out what was the ‘breaking point’ at which any reasonable party would have abandoned efforts at arriving at a settlement and contemplated referral of the dispute for arbitration. This ‘breaking point’ would then be treated as the date on which the cause of action arises, for the purpose of limitation. The threshold for determining when such a point arises will be lower in the case of commercial disputes, where the party’s primary interest is in securing the payment due to them, than in family disputes where it may be said that the parties have a greater stake in settling the dispute amicably, and therefore delaying formal adjudication of the claim. …. 34. We also find it pertinent to add that the appellant’s own default in sleeping over his right for 14 1 (2020) 14 SCC 643 917 ARB 3.2025.odt 3 of 9 years will not constitute a case of ‘undue hardship’ justifying extension of time under Section 43(3) of the 1996 Act or show ‘sufficient cause’ for condonation of delay under Section 5 of the Limitation Act. The appellant should have approached the Court for appointment of an arbitrator under Section 8(2) of the 1940 Act within the appropriate limitation period. We agree with the High Court’s observation that the entire dispute seems concocted so as to pursue a monetary claim against the respondents, taking advantage of the provisions of the 1996 Act.” 5. The next contention sought to be canvassed on behalf of the Respondents is with regard to the arbitrability of the dispute sought to be raised. In this regard reference is made to the Arbitration Clause No.19 of agreement dated 01/09/2004 in order to argue that there is no specific mention in respect of dispute pertaining to the dissolution of partnership to be arbitrable dispute. It is his further submission that the Court is required to take into account the filing of the suit being Spl.C.S. No. 291/2024, wherein the partnership firm in the instant case is one of the defendant. It is his submission that there are about 22 partnership firms as the defendant in the said suit and therefore the appointment of the Arbitrator would affect the right of these firms who are the third parties. To support his submission reference is made to the judgment of the Hon’ble Supreme Court in case of Gujarat Composite Limited Versus A infrastructure Limited and Others2 and the judgment of the Madras High Court in case of V.V.P. Thangaraju Vs. K. V. Perumal Chettiar and Ors.3 Finally it is argued that this Court while exercising of power under 2 (2023) 7 SCC 193 3 MANU/TN/0525/1978 917 ARB 3.2025.odt 4 of 9 Section 11 of the Act is not expected to pass order mechanically and it is required to be considered that there is arbitrable dispute between the parties and there is arbitration agreement between them. 6. There cannot be any dispute made with regard to the proposition sought to be canvassed by the learned Counsel for the Respondents that while exercising the powers under Section 11(6) of the Act, the Court is not expected to act mechanically and to allow Application without prima facie being satisfied of the fact that there exists of valid agreement containing arbitration clause therein. In this regard reference can be made to the judgment of the Hon’ble Supreme Court in case of NTPC Limited Versus SPMLl Infra Limited4 has held in paragraph No.28; “28. The limited scrutiny, through the eye of the needle, is necessary and compelling. It is intertwined with the duty of the referral court to protect the parties from being forced to arbitrate when the matter is demonstrably non-arbitrable. It has been termed as a legitimate interference by courts to refuse reference in order to prevent wastage of public and private resources. Further, as noted in Vidya Drolia, if this duty within the limited compass is not exercised, and the Court becomes too reluctant to intervene, it may undermine the effectiveness of both, arbitration and the Court. Therefore, this Court or a High Court, as the case may be, while exercising jurisdiction under Section 11(6) of the Act, is not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen arbitrator, as expl;ained in DLF Home Developers Ltd. V. Rajapura Homes (P) Ltd.” 4 (2023) 9 SCC 385 917 ARB 3.2025.odt 5 of 9 7. This as well as the other judgment clearly indicate that the High Court while exercising the powers under Section 11(6) of the Act is required to prima facie satisfy itself about the existence of the arbitration clause, arbitrability of dispute including issue of limitation. In the light of these observations, this Court for a limited purpose of satisfying itself with regard to the existence of the agreement and arbitrability of the dispute refers the facts herein below. 8. Admittedly, there is a deed of partnership dated 01/09/2004 duly executed by the Applicants and Respondents. The Clause No.19 which reads thus; ^^19½ Hkkxhnkjkae/khy okn %& lnj Hkkxhnkjh O;olk;kps ckcrhr Hkkxhnkj fdaok R;kaps izfrfu/kh ;kapse/;s Hkkxhnkjh O;olk;kP;k vVh] 'krhZ] dyes] rjrqnh ;kckcr vFkok Hkkxhnkjhps O;ogkj] ekyeRrk] Bsoh] dtsZ] ns.ks] fg'kksc ;k ckcrhr dks.krkgh okn mn~HkoY;kl vFkok erHksn fuekZ.k >kY;kl rks okn ,[kk|k =;Lfk O;Drhaph yokn Eg.kwu use.kwd d:u v’kk yoknkP;k eaMGkdMs lksifoyk tkbZy o yokn vl.kk&;k ,dk blekph yokn Eg.kwu dke igk.kkjs ble vkilkr Bjowu v/;{kkaph fuoM djrhy- yokn eaMGkus ?ksrysyk fu.kZ; gk okn vFkok erHksn vl.kk&;k loZ Hkkxhnkjkaoj ca/kudkjd jkghy-** 9. Apparent reading of the above clause indicates that it is couched with words which are wide enough to cover the disputes of all nature in respect of partnership including dissolution thereof. 10. There is further no dispute about the fact that on 01/12/2023 a notice of dissolution of the firm was issued by the Applicants. Though, in the said notice though there is a reference of the cancellation of power of attorney in the year 2017, for all practical 917 ARB 3.2025.odt 6 of 9 purposes the dispute sought to be referred to the arbitration is in respect of the dissolution of the partnership firm which has been effected by notice dated 01/12/2023. Had it been a case that the dispute was sought to be raised in respect of the dissolution of power attorney to the Arbitrator which has been done in the year 2019, there could have been some substance in the contention of the learned Counsel for the Respondents with regard to the of limitation is applicable to the case. 11. Prima facie perusal of the record indicates that the issue sought to be referred to the arbitration is in respect of the dissolution of the partnership firm. Admittedly, the partnership firm was never sought to be dissolved before 01/12/2023. In the light of this fact, it can certainly be said that on the face of it the dispute sought to be raised is well within limitation. 12. Though it is contended on behalf of the Respondents that the suit being Spl.C.S. No. 291/2024 came to be filed on 05/12/2024 and the present Application is filed thereafter on 28/12/2024, for all practical purposes the filing of the Application during the pendency of the suit does not preclude the parties for making a request for appointment of Arbitrator. Herein this case, though judgments are relied upon which deal with the issue with regard to the interest of the third party being likely to be affected by the appointment of Arbitrator, there 917 ARB 3.2025.odt 7 of 9 is absolutely no prima facie material on record to indicate that any third party is liable to be affected by the appointment of Arbitrator. Mere pendency of the suit between the members of the family, cannot become a ground for rejecting the Application for appointment of Arbitrator. 13. It is clarified that these observations are prima facie in nature and it would be for the Arbitral Tribunal to decide all issues including arbitrability of the dispute. 14. Learned Counsel for the Applicants submits that since the Respondents have failed to appoint Arbitrator within 30 days fo the receipt of the request, it would be for this Court to make an appointment in this regard. He placed reliance on the judgment to support his contention in case of Datar Switchgears ltd Vs. Tata Finance Ltd. And Another5. 15. Having regard to the arbitration clause requiring appointment of the Arbitrator by Respondent, after filing of the Application the right to appoint Arbitrator stood forfeited. Hence, this Court finds it appropriate to appoint Mr. Nikhil S. Jaju as Arbitrator on behalf of the Respondent in view of the arbitration clause. The Arbitrator appointed by the Applicant and by this Court to appoint third Arbitrator. 5 2000 AIR SCW 3925 917 ARB 3.2025.odt 8 of 9 16. At this stage learned Counsel for the Respondents seeks stay of the order for a period of eight weeks to take exception to the same before the Hon’ble Supreme Court. Learned Counsel for the Applicants opposes the said request. 17. To enable the Respondents to stay the order passed by this order by this Court, this order stands stayed for a period of six weeks from today. 18. In view of the above, Application stands allowed. (R. M. JOSHI, J.) ssp 917 ARB 3.2025.odt 9 of 9