Rajasthan High Court – Jaipur
Urn: Arbap / 20U / 2025Ashok Kumar Gupta … vs Prakash Chandra Gupta S/O Late Dr. … on 2 May, 2026
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HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No. 17/2025
1. Ashok Kumar Gupta Son Of Late Shri Kalyan Prasad Gupta,
Resident Of M/s. Kota Service Station, In Front Of Bank Of
Baroda, Jhalawar Road, Kota-7 Other Address House No. D-37,
New Colony, Gumanpura, Kota-7.
2. Shambhu Dayal Maheshwari S/o Late Shri Prabhudayal
Maheshwari, Resident Of House No. 1-Cha-12, Dadabari Kota
District Kota Pin Code 324009.
----Petitioners
Versus
1. Prakash Chandra Gupta S/o Late Dr. Ramkumar Gupta, Aged
About 74 Years, Resident Of 2-Ma-16, In Front Of Bahubali
Medical, Government Hospital Choraha, Vigyan Nagar,kota-6.
2. Hindustan Petroleum Corporation Limited, 1st And 2nd Floor, Plot
No. 12, Near Gumanpura Police Station, Kota
----Respondents
For Petitioner(s) : Mr. Shailesh Prakash Sharma with
Mr. Avi Sharma,
Mr. Divakar Tehariya &
Mr. Manan Sharma
For Respondent(s) : Mr. Abhishek Bhardwaj with
Mr. Ayush Malik
HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA
Judgment
Date of conclusion of arguments : 13/04/2026
Date on which judgment was reserved : 13/04/2026
Whether the full judgment or only
the operative part is pronounced : Full judgment
Date of pronouncement : 2nd/05/2026
REPORTABLE
1. This is an application which has been filed seeking appointment of an
arbitrator under Section 11(6) of the Arbitration and Conciliation Act 1996
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(hereinafter referred to as the 'Act of 1996') and as per the arbitration
clauses enshrined in the partnership deeds.
2. The applicants are two partners of a registered partnership firm
operating under the name of M/s. Kota Service Station (hereinafter referred
to as 'firm') which is in the business of petrol, diesel and other petroleum
products in collaboration with M/s. Hindustan Petroleum Corporation
Limited (hereinafter referred to as 'HPCL').The brief facts giving rise to the
present dispute is that on account of the various allegations made, disputes
have arisen between the partners of the firm and non-applicant 1 which has
hindered the collaboration with HPCL and caused loss to the firm.
3. Learned counsel for the applicants submits that for efficient
functioning of the collaboration by the firm, the income earned was to be
deposited with various banks, for which current account was opened and
could be operated by any partner as per the partnership deed. Learned
counsel further submits that in 2023, when the collaboration with HPCL was
in force, a dispute arose when the son of non-applicant 1 (Shri Anil Gupta,
son of Shri Prakash Chandra Gupta) started to interfere with the business
operations carried out by the partners of the firm which violated the policy
of HPCL.
4. Learned counsel also submits that owing to such refusal, non-
applicant's son levelled various false allegations and also initiated multiple
proceedings aimed at restricting the applicant's bank operations, etc.
Learned counsel further submits that multiple letters were also written to
HPCL, causing loss. Learned counsel further submits that no third party was
authorised to enter the premises of the petrol pump and that no
interference by any third party could have been done which would also
violate the collaboration agreement. Learned counsel submitted that owing
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to the aforementioned, the applicants filed an application under Section 9
of the Act of 1996 before the learned Commercial Court, Kota, owing to
which, serious differences have arisen amongst the partners, affecting the
reputation and prestige of the firm.
5. Learned counsel further submitted that as a reply to the applicant's
Section 9 application, the non-applicant stated that there was no dispute.
However, the non-applicant had previously invoked the jurisdiction of the
learned Commercial Court, Kota by impleading the applicants as a party to
the Civil Misc. Arbitration Application No. 10/2023 filed on 25.07.2023
under Section 9 of the Act of 1996, wherein it was averred that disputes
have arisen amongst the firm's partners and that Shri Anil Gupta was not
allowed to carry out supervision work as the representative of Shri Prakash
Chandra Gupta. Learned counsel also submits that the application also
made a mention of a clause in the partnership deed, which stipulated
resolution of disputes by an Arbitrator as per the Act of 1996.
6. Learned counsel for the applicant also submits that from a bare
perusal of the aforesaid submissions, all ingredients for appointment of an
Arbitrator can be culled out as a valid arbitration clause in the partnership
deed exists and existence of a dispute can also be made out owing to the
Section 9 applications submitted by both parties separately for grant of
interim measure, which is pending adjudication.
7. Per contra, in their reply, learned counsel for the respondent submits
that the present application filed by the applicants is not maintainable
owing to non-service of a notice under Section 21 of the Act of 1996 prior
to filing the current application. Learned counsel further submits that a
perusal of Section 11(6) of the Act of 1996 would reveal that without
service of the notice under the said act, the party seeking reference of the
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disputes to arbitration would not be able to demonstrate the failure by one
party to adhere to the stipulated procedure and accede to the request for
appointment of an arbitrator. Learned counsel also submits that the trigger
for invoking the jurisdiction of this court under Section 11 of the said act is
failure by one party to respond.
8. Learned counsel for the respondent further submits that ex facie, no
dispute survives for reference to arbitration as the dealership agreement
upon which the partnership deed was executed has ended in July 2024 and
that, as per reply to an RTI request filed by the respondent, HPCL
mentioned that the outlet was now handed over to M/s Vinayak Petroleum
on an ad hoc basis for one year and therefore, the firm cannot operate the
said facility now. Learned counsel further submitted that the present
application is not maintainable as the agreement dated 13.10.2020 is not
registered and therefore is barred under Section 69 of the Indian
Partnership Act, 1932. Learned counsel also stated that not impleading a
necessary party, i.e., HPCL renders the present application non-
maintainable.
9. However, learned counsel for the applicants also relied on the decision
of the Apex Court in Umesh Goel vs Himachal Pradesh Cooperative
Group Housing Society Limited 1, Delhi High Court in Hari Om Sharma
vs Sauman Kumar Chatterjee and Another 2 and Calcutta High Court in
Md. Wasim and Another vs Bengal Refrigeration and Company and
Others3 to submit that the bar under Section 69 of the Act of 1932 is
inapplicable to arbitral proceedings and therefore the present application is
maintainable. The learned counsel for the applicants also submitted that
1 (2016) 11 SCC 313
2 2024 SCC OnLine Del 7494
3 2022 SCC OnLine Cal 3035
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HPCL was made a party in the applicant's Section 9 application for the
limited purpose of protecting the dealership from interference and to seek
directions and they are not a necessary party for appointment of arbitrator
and also that existence of a dispute is not affected by the status of the
collaboration.
10. I have considered the submissions.
11. At the outset, it would be appropriate to quote sub-sections 6 and 6A of
Section 11 and Section 21 of the Act of 1996:
"11. Appointment of arbitrators.-
......................
(6) Where, under an appointment procedure
agreed upon by the parties,-
(a) a party fails to act as required under
that procedure; or
(b) the parties, or the two appointed
arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails
to perform any function entrusted to him or
it under that procedure,
[the appointment shall be made, on an application
of the party, by the arbitral institution designated
by the Supreme Court, in case of international
commercial arbitration, or by the High Court, in
case of arbitrations other than international
commercial arbitration, as the case may be] to
take the necessary measure, unless the agreement
on the appointment procedure provides other
means for securing the appointment.
[(6A) The Supreme Court or, as the case may be,
the High Court, while considering any application
under sub-section (4) or sub-section (5) or sub-
section (6), shall, notwithstanding any judgement,
decree or order of any Court, confine to the
examination of the existence of an arbitration
agreement.]
………………………..
21. Commencement of arbitral proceedings.-
Unless otherwise agreed by the parties, the
arbitral proceedings in respect of a particular
dispute commence on the date on which a request
for that dispute to be referred to arbitration is
received by the respondent.”
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Furthermore, it would also be apposite to quote clause 14 of the
partnership deed dated 09.09.2013 (as the text of the arbitration clause is
stated to be common across the partnership deeds):
“14. That in case of any disputes among the partners as
regards the dealing of the firm and or interpretation of
the Clauses of this indenture, the matter shall be
decided according to the provisions of the Arbitration
and Conciliation Act, 1996“.
12. Prior to framing the issues for determination, regarding the scope of
inquiry to be undertaken at the stage of referral, a three-judge bench of
the Hon’ble Supreme Court in SBI General Insurance Company Limited
vs Krish Spinning4 held as under:
“(c) Judicial interference under the 1996 Act
……………….
113. The scope of examination under Section 11(6-
A) is confined to the existence of an arbitration
agreement on the basis of Section 7. The
examination of validity of the arbitration agreement
is also limited to the requirement of formal validity
such as the requirement that the agreement should
be in writing.
114. The use of the term “examination” under
Section 11(6-A) as distinguished from the use of the
term “rule” under Section 16 implies that the scope
of enquiry under Section 11(6-A) is limited to a
prima facie scrutiny of the existence of the
arbitration agreement, and does not include a
contested or laborious enquiry, which is left for the
Arbitral Tribunal to “rule” under Section 16. The
prima facie view on existence of the arbitration
agreement taken by the Referral Court does not bind
either the Arbitral Tribunal or the Court enforcing the
arbitral award.
115. The aforesaid approach serves a twofold
purpose — firstly, it allows the Referral Court to
weed out non-existent arbitration agreements, and
secondly, it protects the jurisdictional competence of
the Arbitral Tribunal to rule on the issue of existence
of the arbitration agreement in depth.
116. Referring to the Statement of Objects and
Reasons of the Arbitration and Conciliation
(Amendment) Act, 2015, it was observed in Interplay
Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re
4 (2024) 12 SCC 1
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[2026:RJ-JP:-DB] (7 of 11) [ARBAP-17/2025][Interplay Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re,
(2024) 6 SCC 1 : 2023 INSC 1066] that the High
Court and the Supreme Court at the stage of
appointment of arbitrator shall examine the
existence of a prima facie arbitration agreement and
not any other issues. The relevant observations are
extracted hereinbelow: (SCC p. 104, para 220)“220. The above extract indicates that the
Supreme Court or High Court at the stage of the
appointment of an arbitrator shall “examine the
existence of a prima facie arbitration agreement
and [Ed.: The words between two asterisks have
been emphasised in original as well.] not other
issues [Ed.: The words between two asterisks
have been emphasised in original as well.] “.
These other issues not only pertain to the
validity of the arbitration agreement, but also
include any other issues which are a
consequence of unnecessary judicial
interference in the arbitration proceedings.
Accordingly, the “other issues” also include
examination and impounding of an unstamped
instrument by the Referral Court at the Section
8 or Section 11 stage. The process of
examination, impounding, and dealing with an
unstamped instrument under the Stamp Act is
not a time-bound process, and therefore does
not align with the stated goal of the Arbitration
Act to ensure expeditious and time-bound
appointment of arbitrators.”
(emphasis supplied)
………………………….
120. By referring disputes to arbitration and
appointing an arbitrator by exercise of the powers
under Section 11, the Referral Court upholds and
gives effect to the original understanding of the
contracting parties that the specified disputes shall
be resolved by arbitration. Mere appointment of the
Arbitral Tribunal does not in any way mean that the
Referral Court is diluting the sanctity of “accord and
satisfaction” or is allowing the claimant to walk back
on its contractual undertaking. On the contrary, it
ensures that the principle of arbitral autonomy is
upheld and the legislative intent of minimum judicial
interference in arbitral proceedings is given full
effect. Once the Arbitral Tribunal is constituted, it is
always open for the defendant to raise the issue of
“accord and satisfaction” before it, and only after
such an objection is rejected by the Arbitral Tribunal,
that the claims raised by the claimant can be
adjudicated.
…………….
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126. The power available to the Referral Courts has
to be construed in the light of the fact that no right
to appeal is available against any order passed by
the Referral Court under Section 11 for either
appointing or refusing to appoint an arbitrator. Thus,
by delving into the domain of the Arbitral Tribunal at
the nascent stage of Section 11, the Referral Courts
also run the risk of leaving the claimant in a situation
wherein it does not have any forum to approach for
the adjudication of its claims, if its Section 11
application is rejected.”
13. While considering an application under Section 11 of the Act of 1996,
this Court would only examine whether there is any arbitration clause
existing between the parties and whether there is any dispute which has
arisen between the parties. In view of the above, basis the facts which are
noticed, we find that both the ingredients, namely, existence of a valid
arbitration clause in the partnership deed and the existence of a dispute
between the partners are present.
14. The question for examination before this Court now, would only be
limited to the objection raised by the respondent of the bar to exercise
powers under Section 11 of the Act of 1996, if notice under Section 21 of
the Act of 1996 has not been served.
15. With regard to the aforesaid, we find that both the parties have
resorted to filing applications under Section 9 of the Act of 1996, seeking
interim relief with the intention to initiate arbitration proceedings for
solving the dispute finally. Thus, knowledge of existence of a dispute was
there amongst the parties. Also, a perusal of the text of Section 21 would
show the absence of any explicit mention of the word ‘notice’ but rather
only refers to the time when a ”request” for arbitration is received,
indicating that issuance of a notice is not a statutory requirement under the
said provision. Therefore, non issuance of the same cannot be utilised as a
ground in this case to challenge the maintainability of the present
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application as the parties already have knowledge of the existence of an
arbitrable dispute. In this regard, the Apex Court in Adavya Projects
Private Limited vs Vishal Structurals Private Limited and Others 5
had held as under:
“17. A plain reading of the provision shows that in
the absence of an agreement between the parties,
arbitral proceedings are deemed to have commenced
when the respondent receives a request to refer
disputes to arbitration. It is clear that Section 21
does not expressly mandate the claimant to send a
notice invoking arbitration to the respondents.
However, the provision necessarily mandates such
notice as its receipt by the respondent is required to
commence arbitral proceedings, unless the parties
have mutually agreed on another date/event for
determining when the arbitral proceedings have
commenced.”
Furthermore, this court in Shekharchand Sacheti and Another vs
S.M.F.G. India Home Finance Company Limited and Another 6 while
adjudicating an application made for appointment of an arbitrator under
Section 11 of the Act of 1996, had held as under:
“The essence of the matter is that merely stating
that a dispute has arisen between the parties and
referring to a claim does not satisfy the requirements
of Section 21 of the Act of 1996 and a valid notice
must be served to the other party to initiate the
arbitration proceedings and in absence of notice
under Section 21, the arbitration application cannot
be entertained.
31. But in the instant case, the respondents were not
taken by surprise regarding invocation of the
arbitration clause by the applicants for the first time
before this Court inasmuch as the applicants
submitted a suit for partition of property against the
respondents before the Court of ADJ, where an
application was submitted by none other than the
respondents themselves under Sections 8 and 5 of
the Act of 1996 that Civil Suit is not maintainable
and an Arbitration Application under Section 11 of
the Act is maintainable, hence accepting their prayer,
the learned ADJ returned the plaint to the applicants
under Order 7 Rule 10 CPC for its presentation
before the competent court of law, and only
thereafter, the applicants have submitted the instant
5 (2025) 9 SCC 686
6 S.B. Arbitration Application No.81/2024, dated 30.05.2025
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[2026:RJ-JP:-DB] (10 of 11) [ARBAP-17/2025]application. Thus, it can safely be said that the
respondents were not taken by surprise by the filing
of this arbitration application, for the appointment of
an arbitrator before this Court, especially given that
no prior written notice was issued by the applicants.
It is inconceivable to suggest that the respondents
were unaware of the dispute concerning the partition
of the property in question. The applicants
approached the Civil Court for partition by way of
filing a Civil suit, but the same was returned by the
Civil Court under Order 7 Rule 10 CPC, at the
request/prayer of the respondents and even the
interim order under Section 9 of the Act of 1996 was
passed against the respondents under the provisions
of Act of 1996 by the concerned competent Court of
law. Hence, the respondents were well versed with
the entire dispute raised against them. Therefore,
under these peculiar circumstances, this application
under Section 11 of the Act of 1996 is maintainable
even without issuing a proper notice to the
respondent under Section 21 of the Act of 1996 by
the applicants.”
16. Therefore, in view of the above, this application for appointment of
Arbitrator deserves to be allowed. This court, therefore, appoints Hon’ble
Mr. Justice Banwari Lal Sharma (former Judge, Rajasthan High Court)
residing at 49-50, 4D, Campus, Theme Colony, Near Murlipura Police
Station, Jaipur, as the sole arbitrator to adjudicate the dispute between the
parties in compliance with the provisions of the Act of 1996. The
appointment of the sole arbitrator is subject to the declarations made under
Section 12 of the Act of 1996 regarding independence, impartiality and the
ability to devote sufficient time to ensure completion of the arbitration
within the prescribed period.
17. The fee payable to the sole arbitrator will be in accordance with the
provisions enshrined in the Manual of Procedure of Alternative Dispute
Resolution, 2009 (as amended by the Manual of Procedure for Alternative
Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017)
read with the 4th Schedule appended to the Act of 1996 or as determined
by the arbitrator with the consensus of the parties.
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18. The Registry is directed to intimate the Arbitrator for their approval
and declaration as per Section 11(18) read with Section 12(1) of the Act of
1996.
19. All issues raised by the parties shall be decided by the Arbitrator in
accordance with law.
20. Since Section 29A of the Act of 1996 stipulates completion of the
proceedings within its stipulated time period, the parties are expected to
appear before the Arbitrator on the date so informed by the Arbitrator
subject to agreement by the parties. Furthermore, the parties shall provide
their respective e-mail/ contact number/ mobile number and/or also of
their authorized representatives/ lawyers appearing on their behalf before
the Arbitrator, in order to facilitate the Arbitrator to send
information/communication to the parties, whenever required. The
information sent by the Arbitrator, on such address/ e-mail/ cellphone of
the parties or to their authorized representatives/ lawyers, shall be treated
as sufficient communication unless same is not changed.
21. The Arbitration Application stands disposed off accordingly.
(SANJEEV PRAKASH SHARMA), ACTING CJ
GOVIND SHARMA/RAHUL/–
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