Delhi High Court – Orders
Preeti Jain And Ors vs Sunita Jain And Anr on 23 March, 2026
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 1790/2024
PREETI JAIN AND ORS .....Petitioners
Through: Ms. Aishna Jain, Mr. Aditya
Maheshwari and Ms. Kravti Kawdia, Advocates.
versus
SUNITA JAIN AND ANR .....Respondents
Through: Ms. Niyati Kohli, Ms. Aayushi S.
Khazanchi and Ms. Aditi Kukreja, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIKAS MAHAJAN
ORDER
% 23.03.2026
1. The present petition has been filed by the petitioners under Section 11
of the Arbitration and Conciliation Act, 1996 (hereinafter, „Act of 1996‟) for
appointment of an Arbitrator to adjudicate the disputes which have arisen
between the parties under the partnership deed dated 10.02.1998.
2. Clause 16 of the Partnership Deed provides for resorting to arbitration
in case disputes arise between the parties. The said clause reads thus:
“That all the disputes or differences arising between the parties
whatsoever touching the affairs in the partnership or the intents
of these presents or their construction or application or division
of assets and all other matters connected with the same shall be
referred to the Arbitration, in accordance with the provisions of
the Arbitration Act 1940 and any other statutory modification
therein for the time being in force, whose decision shall be final
and binding on all parties and their legal representatives.”
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3. The disputes having arisen between the parties, a legal notice dated
17.02.2024 was given by the petitioners which did not elicit any response.
The petitioners had, therefore, approached this court under Section 11 of the
Act of 1996.
4. Notice in the petition was issued by this Court vide order dated
19.11.2024.
5. Ms. Niyati Kohli, learned counsel appears on behalf of the
respondents submits that reply to the petition has been filed. She contends
that partnership deed dated 10.02.1998 was between Sh. Prabhash Jain and
his mother Smt. Sunita Jain (respondent no.1). She contends that the
petitioners are wife and children of Late Sh. Prabhash Jain, who passed
away on 27.04.2021. After the death of Late Sh. Prabhash Jain, the
partnership deed ceased to exist. She further contends that the petitioners are
not party to the partnership deed or the arbitration agreement. Therefore,
they cannot invoke the arbitration clause.
6. She further contends that by way of the present petition, petitioners
are seeking reference not only against petitioner no.1, who was partner in
the partnership deed dated 10.02.1998, but also against Sh. Suresh Jain, the
father of the Late Sh. Prabhash Jain, who was not a partner in the firm that
was constituted vide partnership deed dated 10.02.1998.
7. She further contends that oral family settlement was arrived at
between the petitioners and the respondents in terms of which the petitioners
have already received amounts under the partnership firm.
8. She submits that the respondents have filed a suit for declaration and
partition with regard to the estate left behind by Late Sh. Prabhash Jain
being CS (OS) No. 1023/2024 and in the said suit; the petitioners have not
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filed any application under Section 8 of the Act of 1996. Therefore, they
have submitted to the jurisdiction of the Civil Court, therefore, they are
estopped from invoking the arbitration clause.
9. On the other hand, Ms. Aishna Jain learned counsel appearing on
behalf of the petitioners submits that after the death of a partner, the legal
representatives of the deceased partner are entitled to invoke the arbitration
clause. In support of her submission, she has placed reliance on the decision
of the Hon‟ble Supreme Court in Rahul Verma and Others v. Rampat Lal
Verma and Ors., 2025 SCC OnLine SC 578.
10. As regards the submission that in the suit filed by the respondents, the
petitioners have not filed an application under Section 8 of the Act of 1996,
she submits that at the time of filing the written statement, the petitioners
have taken a categorical objection to the effect that there is an arbitration
clause in terms of Section 8 of the Act of 1996. Further, in the written
statement, it has also been averred that present petition under Section 11 of
the Act of 1996 has been filed by the petitioners and the same is pending.
11. As regards petitioners‟ submission that respondent no.2 is not a party
to the partnership deed dated 10.02.1998, she places reliance on the decision
of the Coordinate Bench of this Court Paradise Plastic Enterprises Limited
v. JRG Automative Industries India Pvt. Ltd. and Ors., [Arb.P. 655/2025;
DOD 27.05.2025] to contend that the Court under Section 11 of the Act of
1996 will not enter into exercise of determining whether the respondents as
non-signatories are bound by the arbitration agreement or not.
12. I have heard the learned counsel for the parties.
13. At the stage of deciding a petition under Section 11 of the Act of
1996, the Court is only required to satisfy itself, prima facie, as to the
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existence of the arbitration clause. All other questions are to be left open for
the determination of the learned Arbitrator.
14. The partnership deed dated 10.02.1998 demonstrates, prima facie, that
an arbitration agreement exists in the said partnership deed.
15. Insofar as submission of learned counsel for the petitioners, that
present petitioners are not entitled to invoke the arbitration clause, suffice it
to observe that the Hon‟ble Supreme Court in Rahul Verma (supra) has
clearly laid down that arbitration agreement does not cease to exist on the
death of any party and the arbitration agreement can be enforced by or
against the legal representatives of the deceased. The relevant extracts from
the said decision reads thus:
“8. The decision in the case of Ravi Prakash Goel v. Chandra
Prakash Goel, (2008) 13 SCC 667, squarely covers the facts of
the present case. This Court held that an arbitration
agreement does not cease to exist on the death of any party
and the arbitration agreement can be enforced by or against
the legal representatives of the deceased. The Court
emphasized on the definition of a „legal representative‟ under
Section 2(1)(g) of the Act of 1996 to hold that an arbitral
agreement and the award is enforceable by or against the
legal representatives of the deceased. The relevant
observations are reproduced hereinbelow:–
„18. It is clear from Section 40 of the Arbitration Act that an
arbitration agreement is not discharged by the death of any
party thereto and on such death it is enforceable by or
against the legal representatives of the deceased, nor is the
authority of the arbitrator revoked by the death of the party
appointing him, subject to the operation of any law by virtue
of which the death of a person extinguishes the right of
action of that person.
19. Section 2(1)(g) defines “legal representative” which
reads thus:
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“2. (1)(g) „legal representative‟ means a person who in
law represents the estate of a deceased person, and
includes any person who intermeddles with the estate of
the deceased, and, where a party acts in a
representative character, the person on whom the estate
devolves on the death of the party so acting;”
20. The definition of “legal representative” became
necessary because such representatives are bound by and
also entitled to enforce an arbitration agreement. Section
40 clearly says that an arbitration agreement is not
discharged by the death of a party. The agreement remains
enforceable by or against the legal representatives of the
deceased. In our opinion, a person who has the right to
represent the estate of the deceased person occupies the
status of a legal person (sic representative). Section 35 of
the 1996 Act which imparts the touch of finality to an
arbitral award says that the award shall have binding
effect on the “parties and persons claiming under them”.
Persons claiming under the rights of a deceased person are
the personal representatives of the deceased party and they
have the right to enforce the award and are also bound by
it. The arbitration agreement is enforceable by or against
the legal representative of a deceased party provided the
right to sue in respect of the cause of action survives.
xxx xxx xxx xxx
27. We are of the opinion that in view of the provisions of
Section 46 read with Section 48 of the Partnership Act as
well as Section 40 of the Arbitration and Conciliation Act,
1996, the application for appointment of an arbitrator
under the arbitration clause of the partnership deed was
liable to be allowed and the learned Chief Justice has erred
in overlooking the said provisions. While right to sue for
rendition of accounts of partnership firm survives on the
legal representative of a deceased partner, he is also
entitled to invoke the arbitration clause contained in the
partnership deed.
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xxx xxx xxx xxx
29. As already stated, it was not legally essential to
specifically make a mention that the partners included their
legal heirs, representatives, assigns or legatees, etc. and the
arbitration clause could be invoked by the appellant as the
legatee as well as the legal heir/legal representative of the
deceased Dulari Devi particularly where the dispute had
arisen during her lifetime. The appellant’s claim in the
instant case is based on the will as well as being a legal heir
of the deceased Dulari Devi. The appellant, in our opinion,
possessed a legal and enforceable right to invoke
arbitration clause and move application under Section 11 of
the Arbitration Act before the High Court for appointment
of arbitrator. The word “party” as used in the partnership
deed does not exclude inclusion of legal heirs, legal
representatives, etc. as being canvassed by the respondents.
Thus, in our opinion, in view of the provisions of Sections
40 and 46 of the Partnership Act read with Section 40 of
the Arbitration Act, the appellant has a legal right to
commence arbitration by moving an application under
Section 11 of the Arbitration Act in the High Court as in
our view, the right to sue survives on him as legal
representative of the deceased Dulari Devi and he is
entitled to invoke Clause 13 of the partnership deed.
Moreover, the dispute referable to arbitration had already
arisen during the lifetime of Dulari Devi which is also well
settled that where a dispute is referable to arbitration, the
parties cannot be compelled to take recourse to in the civil
courts.”
(Emphasis supplied)
**** **** ****
10. It is a well-established position of law that the term
„partners‟ extends to and would include their legal heirs,
representatives, assigns or legatees, etc. Persons claiming
under the rights of a deceased person are the representatives
of the deceased party, and therefore, both the parties to the
agreement and their legal heirs are entitled to enforce an
arbitral award and are bound by it. In light of Section 40 of the
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Act of 1996 the existence of an arbitration agreement is not
affected by the death of a party to the arbitration agreement. As
a consequence, the right to sue for rendition of account also
survives, ensuring that the legal representatives can assert or
defend claims arising from the partnership agreement.”
(emphasis supplied)
16. Insofar as the contention of the learned counsel for the respondents
that respondent no.2 is not a signatory to the partnership deed dated
10.02.1998, this Court notes that a Coordinate Bench of this Court relying
upon the decision of the Hon‟ble Supreme Court in ASF Buildtech Private
Limited v. Shapoorji Pallonji and Company Private Limited, (2025) SCC
OnLine SC 1016, has laid down that the Court under Section 11 must not
enter into the exercise of determining whether the respondents as non-
signatories are bound by the arbitration agreement or not. Such an exercise
is to be left to the arbitral tribunal for decision in the first instance.
17. As regards the objection that the petitioners have submitted to the
jurisdiction of civil court in a suit filed by the respondents, in as much as no
application under section 8 of the Act was filed by the petitioner, it is to be
noted that the learned counsel for the petitioners has articulated that an
objection in terms of section 8 was taken by the petitioners on the first
instance at the time of filing of their written statement, which fact has not
been disputed by the respondents. It is trite law that objection taken in
written statement relating to existence of arbitration clause, is sufficient
compliance of section 8 of the Act. Therefore, this Court is of the view that
the petitioners have not waived their right to object nor have they submitted
to the jurisdiction of a civil court.
18. In view of the above, this Court finds no merit in the objections raised
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by the learned counsel for the respondents.
19. The petition is therefore allowed. Accordingly, the dispute between
the parties is referred to arbitration of Mr. Shiven Khurana, Advocate [Mob.
9958981505].
20. The arbitration will be held under the aegis of Delhi International
Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi – 110003
[“DIAC”] and shall be governed by the Rules of DIAC including as to the
remuneration of the learned Arbitrator.
21. The learned Arbitrator is requested to furnish a declaration under
Section 12 of the Act prior to entering upon the reference.
22. It is made clear that all rights and contentions of the parties are left
open for adjudication by the learned Arbitrator.
23. Petition stands disposed of in above terms.
VIKAS MAHAJAN, J
MARCH 23, 2026/jg
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