Delhi High Court
Smt. Prem Lata Surekha vs Sh. Chakradhari Surekha & Ors on 21 April, 2026
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~J1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 12th February, 2026
Date of decision: 21st April, 2026
Uploaded on: 21st April, 2026
+ FAO(OS) (COMM) 70/2025 & CM APPL. 24573/2025
SMT. PREM LATA SUREKHA .....Appellant
Through: Mr. Rajshekhar Rao, Senior Advocate,
Ms. Sangeeta Vazirani, Mr. Sachin
Yadav, Mr. Ajay Sabharwal & Mr.
Pradip Kumar, Advs. (M:
8882122726)
versus
SH. CHAKRADHARI SUREKHA & ORS. .....Respondents
Through: Mr. Kunal Kalra, Adv. for R-1 with R-
1 in person.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE MADHU JAIN
JUDGMENT
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. This is an appeal filed by the Appellant- Smt. Prem Lata Surekha under
Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter, ‘the
Act’), challenging the order dated 21st February, 2025 (hereinafter, ‘the
impugned order’) passed by ld. Single Judge of this Court in O.M.P.
(COMM) 140/2023 titled Prem Lata Surekha versus Sh. Chakradhari
Surekha & Ors.
3. Vide the impugned order, the ld. Single Judge dismissed the application
filed by Smt. Prem Lata Surekha under Section 34 of the Act, seeking setting
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aside of the arbitral award dated 2nd January, 2023 (hereinafter, ‘the arbitral
award’). Hence, the present appeal.
Factual Background
4. M/s Sri Narayan Rajkumar (hereinafter, ‘the partnership firm’), a
family run partnership firm is at the core of the present dispute. The said
partnership firm was initially constituted in April, 1973, and was engaged in
the business of trading, manufacturing, import exports, financing, dealerships.
The partnership firm at its inception consisted of the following persons as
partners:
i. Shri. Nityanand Yadav, son of Shri Lalji Singh
ii. Smt. Prem Lata Surekha, wife of Shri Vishnu Kumar Surekha
iii. Shri. Chakradhari Surekha, son of Shri Sita Ram Surekha.
5. The said three partners had started carrying on business from 2nd April
1973. In addition to the said partners, the following three minors had been
admitted to be the beneficiaries of the partnership firm:
i. Master Sudhir Kumar, son of Shri K.K. Surekha;
ii. Master Sandip Kumar, son of Shri K.K. Surekha;
iii. Kumari Rachna, minor daughter of Shri. Raj Kumar Surekha.
6. Thereafter, the partnership firm was re-constituted vide a partnership
deed dated 22nd July, 1974 and it was agreed that the partnership would
continue with all the three partners, however, it was decided that out of the
three minors, only Kumari Rachna was to be retained as the beneficiary in the
partnership firm.
7. In addition, the said partnership deed dated 22 nd July, 1974, had an
arbitration clause which reads as under:
“15. Any dispute arising out of this partnership or as to
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the interpretations, operations or enforcement of terms
of this partnership between parties or their legal
representatives shall be referred for adjudication to the
arbitrators.”
8. One property namely ‘Plot No. Y-10, Naraina, New Delhi,
admeasuring 450 Sq. Yards (hereinafter, ‘the subject property’) was acquired
by the partnership firm by way of a perpetual lease deed dated 24th January,
1980.
9. In terms of the partnership deed dated 22nd July, 1974, the profit and
loss of the partnership firm was to be shared in the following manner:
Sr. No. Name Profit Loss
1. Shri. Nitya Nand Yadav 25% 30%
2. Smt. Premlata Sureka 30% 40%
3. Shri. Chakradhari Sureka 25% 30%
4. Ms. Rachna Sureka 20%
PROCEEDINGS BEFORE THE LD. SOLE ARBITRATOR-
10. As per the Statement of Claim filed by Shri Chakradhari Surekha before
the ld. Arbitrator, Shri. Nityanand Yadav had expired in June, 2003 and none
of his legal heirs were inducted as partners in the partnership firm.
11. Before the ld. Arbitrator, the case of Shri. Chakradhari Surekha was
that Smt. Prem Lata Surekha was not involving him in the business activities
of the partnership firm during the lifetime of his father- Shri Sita Ram
Surekha, as they were having cordial relationships – however, the father died
in 2003.
12. Amongst the various allegations raised in the claim petition, Shri
Chakradhari Surekha had alleged that Smt. Prem Lata Surekha and her
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husband had got various documents executed with the intention to usurp all
the properties of the partnership firm.
13. It was also the case of Shri Chakradhari Surekha before the ld.
Arbitrator that he had suffered from cancer in 2007 and was not keeping good
health. Taking advantage of his ill-health, he was never provided the proper
accounts of the partnership firm by his brother and the sister-in-law-Shri.
Vishnu Kumar Surekha and Smt. Prem Lata Surekha, respectively.
14. According to Shri. Chakradhari Surekha, the subsequent documents
including certain lease deeds, which have all been created by Shri. Vishnu
Kumar Surekha and Smt. Prem Lata Surekha showing Shri. Vishnu Kumar
Surekha as one of the partners of the partnership firm are all fabricated, as he
i.e. Shri. Chakradhari Surekha had neither ever resigned from the partnership
firm, nor was the firm ever re-constituted according to him.
15. The status of Shri. Vishnu Kumar Surekha, according to Shri.
Chakradhari Surekha, is merely that of the husband of the partner i.e., Smt.
Prem Lata Surekha.
16. Shri. Chakradhari Surekha claimed that on the basis of forged and
fabricated documents, Shri. Vishnu Kumar Surekha had applied for mutation
of the subject property in his own name.
17. The various partnership deeds which are alleged to have been
fabricated are dated 7th February, 1985, 1st November, 1988, 24th March, 1993
and 1st April, 1999.
18. Shri Chakradhari Surekha also claims that he came to know that Shri.
Vishnu Kumar Surekha had entered into an ‘agreement to sell’, with a third
party and had accepted Rs.30 lakhs for selling 1/3rd portion of the subject
property in respect of which, an FIR had also been registered by Shri
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Chakradhari Surekha.
19. Various documents are relied upon by Shri Chakradhari Surekha before
the ld. Arbitrator to argue how there was a plan made to deprive him of the right
in the subject property. According to Shri. Chakradhari Surekha, the business of
the firm was never disclosed to him and was being run by Shri. Vishnu Kumar
Surekha on his own. It was, further, learned by him that Shri Vishnu Kumar
Surekha had sold 155 sq. yds. of the subject property to one Smt. Lata Gupta
illegally and without any authority.
20. Due to the said acts of Shri Vishnu Kumar Surekha and Smt. Prem Lata
Surekha, a notice was sent by Shri Chakradhari Surekha on 23rd March, 2015, in
which it was alleged that since various disputes and differences have arisen, he
wishes to dissolve the partnership, and he further invoked the arbitration clause
in terms of the partnership deed dated 22nd July, 1974. In the said notice dated
23rd March, 2015, Mr. Puneet Budhiraja was nominated as an Arbitrator.
21. In response thereto, on behalf of Smt. Prem Lata Surekha, a reply was sent
that she has no concern with the alleged partnership deed of 22 nd July, 1974. It
was also alleged that Shri. Nitya Nand Yadav was maintaining all the records of
the partnership firm and since he had retired, she was not aware as to who was
looking after the records.
22. According to Smt. Prem Lata Surekha, the partnership deed dated 22nd
July, 1974 had come to an end and hence, even the arbitration clause was no
longer valid. It was also claimed that Shri Chakradhari Surekha had himself
retired from the partnership about 30 years back. Hence, the nomination of the
Arbitrator was opposed by Smt. Prem Lata Surekha.
23. According to Shri. Chakradhari Surekha, Smt. Prem Lata Surekha and her
husband Shri. Vishnu Kumar Surekha had connived with each other with an
intention to take exclusive ownership of the subject property. They had
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applied for mutation and conversion of the subject property from leasehold to
freehold.
24. Thus, as a follow up to the notice dated 23rd March, 2015, another
notice dated 12th July, 2016 was issued by Shri Chakradhari Surekha. In the
said notice, the stand taken by Shri Chakradhari Surekha was that in view of
Shri Nityanand Yadav having expired and his legal heirs not having been
inducted into the partnership firm, the only surviving partner of the firm,
besides him, was Smt. Prem Lata Surekha.
25. Accordingly, Mr. Justice Fakhruddin, Retired Judge from the High
Court of Chhattisgarh was nominated as the Arbitrator in notice dated 12th
July, 2016 for the proceedings arising from the disputes amongst the parties.
26. However, since Prem Lata Surekha did not consent to the appointment
of the Arbitrator who had been nominated by Shri Chakradhari Surekha, a
petition under Section 11 of the Act, being Arbitration Petition No. 457/2017
titled Sh. Chakradhari Surekha &Anr. v.Smt. Prem Lata Surekha& Ors.
came to be filed before this Court. A petition under Section 9 of the Act was
also filed by Shri Chakradhari Surekha.
27. Vide order dated 1st August, 2018, in Arbitration Petition No.
457/2017, Ms. Rekha Sharma, Former Judge of Delhi High Court was
appointed as the Sole Arbitrator for disputes arising between the parties.
28. In addition, a restraint order was also passed, restraining Smt. Prem
Lata Surekha and Shsri. Vishnu Kumar Surekha from creating any third party
interest in the subject property. Relevant paras of the order dated 1st August,
2018, passed in Arbitration Petition No. 457/2017, are as under:
“20. The record shows that petitioner no. 1 had issued two
notices for appointment of an arbitrator. These notices areSignature Not Verified
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dated 23.03.2015 and 12.07.2016.
20.1 Respondent no. 1 resisted appointment of an arbitrator
in the matter.
20.2 Clause 15 of the partnership deed dated 22.07.1974
reads as follows:-
“15. Any dispute arising out of this partnership
or as to it interpretation, operations or
enforcements of terms of this partnership
between parties or their legal representatives
shall be referred for adjudication to the
arbitrators.”
20.3 As it would be evident upon perusal of the said clause,
no one party has the right to appoint an Arbitrator.
20.4 In any case, respondent no. 1 has lost its right to have
a say in the matter.
21. Accordingly, Ms. Rekha Sharma, Former Judge, Delhi
High Court is appointed as an Arbitrator in the matter.
22. At this stage, counsel for the parties agree that
arbitration proceedings be governed by rules and fee
structure prescribed by the Delhi International Arbitration
Centre.
22.1 It is ordered accordingly.
23. Needless to say, it will be open to the respondents to take
up all defences as may be available to them in law.
24. Insofar as the petition filed under Section 9 of the
Arbitration and Conciliation Act, 1996 (Act)is concerned,
Mr. Kalra says that this petition can be placed before the
learned Arbitrator for passing appropriate orders in
exercise of her power under Section 17 of the Act.
24.1 Mr. Kalra, however, says that pending disposal of the
petition Mr. Vishnu Kumar Surekha (who, as noted above,
is the husband of respondent no. 1/Ms.Prem Lata Surekha)
should be restrained from creating third party interest in the
subject property.
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25. I tend to agree with Mr. Kalra, Accordingly, till the
time, the learned Arbitrator deals with the captioned
petition filed under Section 9 of the Act, Mr. Vishnu
Kumar Surekha, his agents, employees etc are restrained
form creating third party interest in the subject property.
26. Needless to say, the learned arbitrator will give full
opportunity to the respondents to have their say in respect
of the said petition.
27. Furthermore, the learned Arbitrator, after hearing
parties will be free to either affirm or vacate or even vary
the interim order passed by this Court.
28. Consequently, the aforementioned petitions are
disposed of in the aforementioned terms.”
The claim of Shri. Chakradhari Surekha was that he and Smt. Prem Lata
Surekha being the two remaining partners of the firm – the property is liable
to be partitioned in equal shares between them. The prayers before the ld.
Arbitrator were as under:
“a) pass an award of declaration in favour of claimant
no. l and against the respondents no.1 and 2, thereby
declaring the alleged fake partnership deeds dated
07/02/1985, 01/11/1988, 24/03/1993 & 01/04/1999
executed by respondent no.1 and 2 and by Late Shri
Nitya Nand Yadav or any other documents based upon
the said alleged partnership deeds regarding sale with
respect to Property no. Y-10, Naraina, New Delhi as
null and void being forged, fabricated, sham and having
no value in eyes of law and confer no right, title, interest
or locus-standi upon respondents qua suit property.
b) pass an award of permanent injunction in favour of
claimant no. 1 and against the respondents thereby
restraining them, their heir, agents, representatives,
assignees and/or anybody else on his behalf create anySignature Not Verified
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third-party interest or part with the possession in the
suit property on the basis of forged and fabricated
documents.
c) pass an award of partition ofthe property no. Y-
10,Naraina, New Delhi in two equal share of claimant
no. l and respondent no. l herein by metes and bound,
the possession of 50% of property no. Y-10, Naraina,
New Delhi may also be handed over to the claimant no.1
by dividing the property no. Y-10 Naraina, New Delhi in
equal share i.e. 50% each.
d) pass an award for rendition of account in favour of
the claimant no.1 and against respondent no.1 and 2
thereby directing them to render the true and correct
accounts of the business activity run under the name and
style of the claimant no.2.
e) any other order which this Hon’ble tribunal may pass
in the facts and circumstances of the present case.”
29. Pursuant to the said order, arbitration proceedings were commenced
before the ld. Arbitrator and the arbitral award was passed on 2nd January,
2022. The ld. Arbitrator, after examining all the documents and the pleadings
filed by all parties, arrived at the following conclusions:
I. Both sides have relied upon various partnership deeds dated 1 st April,
1981, 7th February, 1985, 1st November, 1988, 24th March, 1993 and 1st
April, 1999. The case of the Claimant is that these deeds are forged
and fabricated, whereas, the Respondent- Smt. Prem Lata Surekha and
her husband alleged that the partnership was reconstituted on several
occasions, hence the subsequent partnership deeds.
I(A) On this aspect, the ld. Arbitrator held that only photocopies of the said
partnership deeds were filed by the parties and since in the order of the
High Court dated 1st August, 2018, the partnership deed dated 27th July,
1974, which contains the arbitration clause, was the dispute referred toSignature Not Verified
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her, the Arbitrator cannot assume jurisdiction in respect of any other
partnership deeds which did not have the said clause.
I(B) In any event, since neither of the parties had placed the original
partnership deeds on record and only secondary evidence was laid by
Smt. Prem Lata Surekha to prove the existence of the said deeds, the
same could not be held to be proven.
I(C) Smt. Prem Lata Surekha also did not file her affidavit-in-evidence
before the ld. Arbitrator, nor did she enter the witness box. Only her
husband- Shri Vishnu Kumar Surekha filed an affidavit-in-evidence on
the basis of a Power of Attorney issued by his wife.
I(D) Thus, the ld. Arbitrator came to the conclusion that Smt. Prem Lata
Surekha was only a partner on paper. The ld. Arbitrator then scrutinised
in detail as to whether the other partnership deeds came into existence
or not. The differences in the various forms which were relied upon by
Shri. Vishnu Kumar Surekha was noted by the ld. Arbitrator and the
same were contrasted from the ones which were finally produced by
the official witness.
I(E) The ld. Arbitrator also referred to the oral evidence which was adduced
by Shri Vishnu Kumar Surekha and held that the discrepancies were
not acceptable. She also observed that the following testimony of Shri.
Vishnu Kumar Surekha was evasive:
“Q.7. Is it a fact that you have not placed on record any
dissolution deed that Prem lata Surekha had resigned
from the firm?
Ans. I do not remember. Volt. This fact is evident from
the registration of partnership firm reconstituted bySignature Not Verified
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C.D. Surekha and Nityanand Yadav, and filed with the
Registrar of Firms under their own signatures.
Q.8. Is it a fact that you have not placed on record any
dissolution deed showing that Nityanand Yadav had
resigned from the firm?
Ans. It is a matter of record. The same can be verified
from the records of Registrar of Firms. The record used
to be monitored by late Shri Sitaram Surekha during his
Lifetime. It is correct that document filedby me with the
written statement i.e., Form no.I is a differentdocument
to the document mark-X are fabricated.”
II. The ld. Arbitrator held that Shri Vishnu Kumar Surekha was unable to
produce any partnership deed executed between Shri Chakradhari
Surekha and Shri Nityanand Yadav, as also the proof of any resignation
of Smt. Prem Lata Surekha, Shri Chakradhari Surekha or of Shri
Nityanand Yadav.
II(A) The ld. Arbitrator thus held that ‘Document R-2’ dated 19th October,
1981, i.e. the proof of resignation of Smt. Prem Lata Surekha from the
partnership firm was, therefore, not proven.
III. Coming to the partnership deed of 1st April, 1981, again, ld. Arbitrator
observed that only a photocopy thereof was placed on record and this
document was also held to have not been proved.
III(A) Insofar as ‘Form C’ was concerned, the same was sought to be proved
through an official from the Registrar of Firms. This ‘Form C’ was
relied upon by the Respondent as evidence before the ld. Arbitrator for
the following facts:
“23.Lastly, the respondent placed reliance on Form-C
filed with her statement of defence as annexure R-3.
Needless to say that the claimant denied the same. It is
a communication from the Registrar of firms to the firmSignature Not Verified
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M/S Narain Rajkumar acknowledging the receipt of
documents mentioned therein which are being
reproduced hereinbelow in verbatim:
1) Mr. Chakradhari Surekha has stand retired from the
firm and Mr. Vishnu Kumar Surekha have joined the
firm vide partnership deed dated 7/2/1985.
2) Mr. Nityanand Yadav has stand retired from the firm
and Smt. Parmeshwari Devi Surekha have joined the
firm partnership deed 1/11/1988 vide notice dt.
21/8/06″
III(B) The contents of the said document showed that it relied upon certain
partnership deeds of 7th February, 1985, 1st November, 1988 and notice
dated 21st August, 2006 to prove the facts, as stated above, however,
none of the said documents were available on the official record of the
Registrar of Firms. In conclusion, the ld. Arbitrator held as under:
“25. To sum up, given the fact that the respondent did
not place any of the partnership deeds on record, nor
were the same available in the official record; given the
fact that the ·respondent neither placed on record any
proof of her resignation from the partnership of 1974.
nor that of the claimant from the partnership of April 1,
1981; given the fact that nothing was placed on record
to prove that Nityanand Yadav had retired from the
partnership, or that his accounts were settled; given the
fact that the respondent did not care to file her own
affidavit in support of the averments made by her; given
the fact that she gave a lame excuse ‘of convenience’
for absenting herself from the proceedings; given the
fact that the documents which the respondent had placed
on record to prove the existence of the partnership deeds
were totally at variance with the record summoned from
the office of the Registrar of the Firms; given the fact
that the official witness was deputed only to produce the
record, and was not a witness of the contents of the
documents produced by him) it is held thatSignature Not Verified
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the evidence led by the respondent was half-baked and
totally perfunctory. Consequently, it is further held that
the respondent. has failed to prove her
defence. Hence, the same is rejected.”
Thus, according to the ld. Arbitrator none of the subsequent documents which
were relied upon by Smt. Prem Lata Surekha and Shri. Vishnu Kumar Surekha
were proved on record.
IV Insofar as the partnership deed dated 22th July, 1974 is concerned, the
same was not disputed by either of the parties before the ld. Arbitrator.
The case of the Respondent- Smt. Prem Lata Surekha was merely that
the same was superseded by subsequent partnership deeds.
IV(A) Since the subsequent deeds were not proved and the partnership deed
dated 22th July, 1974 was an undisputed partnership deed, the ld.
Arbitrator, while placing reliance on Sections 43 and 32 of the
Partnership Act, 1932, held that such a partnership could only be
dissolved with the consent of all other parties, or by any one of the
partners giving notice in writing to all the other parties.
IV(B) Since no evidence in this regard was led regarding the dissolution of
the partnership firm with the consent of the other partner, the ld.
Arbitrator came to the following conclusion:
“29. On a conjoint reading of section 32 and 43 of the
Partnership Act, it is clear that the partnership of 1974
which was ‘at will” could only be dissolved
either with the consent of all the other partners, or by
anyone of the partners giving notice in writing to all the
other partners of his intention to dissolve
the firm. It has already been discussed in detail, and held,
that the respondent led no evidence to prove the fact that,
she had resigned from the partnership of July 22, 1974,
or of the fact that the claimant bad resignedSignature Not Verified
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from the reconstituted partnership of 1981 on August 31,
1984 or the further fact that Nityanand Yadav had also
retired, and his accounts were settled. In view of the
aforesaid, the partnership of July 22, 1974 continued
till the claimant gave notice of dissolution of the same to
the other partners on March 23, 2015. The respondent
has not disputed receiving the notice.
Rather she sent her reply to the same.”
V. Another argument addressed by the ld. Arbitrator is that the claim
petition filed by Shri. Chakradhari Surekha was very belated. In this
regard, the ld. Arbitrator was of the opinion that the 1974 partnership
deed remained alive till 23rd March, 2015. Under such circumstances,
the Arbitrator came to the following conclusion:
“31.Let us assume everything against the claimant. Let
us assume that he was complacent and the partnership
for all intents and purposes was dysfunctional, but
inertia or inaction on his part does not take away from
him his right to seek dissolution in the manner provided
under the Act. The partnership of 1974 may have
transacted no business, but it remained alive
till it was formally dissolved. At worse, it can be said
that it was on ventilator, and became dead only when
the claimant pulled the plug on March 23, 2015.
32.Having held that the partnership remained alive till
March 23, 2015 the only other question that remains, is
whether the plaintiff is entitled to the relief of partition
in respect of property no. Y-10, Naraina, New Delhi in
two equal shares of 50% each between him and the
respondent Smt. Premlata Surekha. It has not been
disputed by the respondent that the property in question
stands in the name of the firm M/S Narain Rajkumar
vide perpetual lease deed executed between the firm,
and the Land and Housing Department of Delhi
Administration. As per the claimant, VishnuSignature Not Verified
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Kumar Surekha did make an aborted attempt to get the
property converted from leasehold to freehold, but on
an objection from their other brother
Rajkumar Snrekha who wrote to the DDA that the
conversion was being sought on the basis of a forged
partnership deed, the DDA reportedly declined
conversion. The respondent, on the other hand, has
stated that the plot was acquired in lieu of another
property at Loha Mandi belonging to her father in law.
Assuming it to be so even though no proof regarding the
same has been furnished, it is now a thing of the past.
The fact remains that, as of now the property stands in
name of the firm. The respondent has
also stated that the claimant did not contribute any
money towards the capital of the firm, nor did he involve
himself in the affairs of the firm. Since the property now
is in the name of firm it is unnecessary to dig the
past to know who contributed what and how much,
towards the acquisition of the property. And as for the
claimant not having involved himself in the
affairs of the firm the same may hold true of the
respondent too.”
30. It is this award dated 2nd January, 2022, that was challenged before the
ld. Single Judge of this Court u/s 34 of the Act. Vide the impugned order dated
21st February, 2025, the said petition was dismissed by the ld. Single Judge
with the following observations:
“35. A perusal of the aforesaid shows that the Arbitrator
was of the opinion that due to death of other partners, only
two partners, namely, Claimant (Respondent No.1 herein)
and the Petitioner herein survived and the property is
divided in equal proportion. This Court, therefore, does
not find any reason to interfere with the said finding. The
Arbitrator also observed that the other alive partner
Rachna Kedia did not come forward to contest the case
and in any case, she had no share in the assets of the firm
and was only entitled to profit. Since only the propertySignature Not Verified
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was being divided no share has been rightly given to the
other partners.
36. In view of the above, this Court does not find any
reason to interfere with the Award dated 02.01.2023.”
SUBMISSIONS ON BEHALF OF THE APPELLANT BEFORE THIS
COURT:
31. In the present appeal filed under Section 37 of the Act, Mr. Rajshekhar
Rao, ld. Senior Counsel has made submissions on behalf of the Appellant.
32. The following are the submissions made by Mr. Rao, ld. Senior
Counsel:
i. Firstly, the partnership deed of the firm had under gone several
changes after it was initially executed, however, the changes in the
constitution of the partnership firm and the final relief which is granted
do not match. It is his submission that the Respondent No.1–Shri
Chakradhari Surekha had already resigned from the partnership firm
and was not entitled to any portion of the assets in the firm.
ii. The second submission is that at the time when Smt. Rachna
Kedia was shown as a beneficiary of 20 % of the profits, she was a
minor and under Section 30 (2), (5) and (6) of the Partnership Act, she
automatically, upon attaining majority, becomes a partner in the firm
and her share has not been taken into consideration by the ld. Arbitrator.
33. According to the ld. Senior Counsel, both these issues have not been
dealt with by ld. Single Judge, who has brushed aside the arguments and
simply held that the arbitral award doesn’t deserve interference.
34. Further, it is submitted on behalf of the Appellant that insofar as Sh.
Nitya Nand Yadav is concerned, his resignation prior to his demise and the
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letter issued by his legal heirs thereafter would not deprive them of the
proceeds of the asset, if any sold, belonging to the firm, and hence, the arbitral
award dividing the property 50-50 between Smt. Prem Lata Surekha and Shri
Chakradhari Surekha is not tenable.
35. Further submission on behalf of the Appellant is that the re-constitution
of the partnership firm was admitted by Shri Chakradhari Surekha in the cross
– examination before the ld. Arbitrator. However, the same has not been
considered by the ld. Arbitrator.
36. It is also submitted on behalf of the Appellant that the ld. Arbitrator had
become functus officio and the same has been rejected on the ground that the
parties had acceded to the Arbitrator’s jurisdiction after the Amendment Act,
2015 and had appeared before the Arbitrator.
37. The further submission is that certain officials from the Registrar of
Firms had also appeared before the ld. Arbitrator and had tendered their
evidence. However, due to some inconsistencies in one of the forms, the ld.
Arbitrator had held against the Appellant.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS BEFORE
THIS COURT:
38. On the other hand, learned Counsel appearing for the Respondents
submits that the onus of proving the re-constitution of the partnership firm
was on the Appellant, which the Appellant has miserably failed to discharge.
It is further submitted that on behalf of Smt. Rachna Kedia, counsels had
appeared before the ld. Arbitrator but chose not to contest the matter at all.
This is clear from a reading of the proceedings before the ld. Arbitrator which
read as under:
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“Vide a separate order, the application of
respondent no. 2 under section 16 of the Arbitration and
Conciliation Act, 1996 has been disposed of. Learned
counsel for the claimant prays for 3 weeks time to file
rejoinder to the statement of defence of respondent no.1.
Learned counsels, namely, Mr. Abhinav Srivastava and
Mr. Kshitij Bhardwaj appearing for respondent no.6
want to withdraw their Vakalatnama, on the ground,
that they have not received instructions from the
respondent. As prayed, the aforesaid advocates are
allowed to withdraw from the proceedings.”
39. In addition, reference is made to the reply sent by the legal heirs of Sh.
Nitya Nand Yadav in response to a notice of sent by Shri Chakradhari
Surekha. The said notice dated 23rd March, 2015 was issued to Sh. Nitya Nand
Yadav, in response to which in the reply, it is stated as under :
We Shiv Kumar Yadav and Shiv Ratan Yadav
have received your notice dated 23.03.201. Our father
Sh. Nitya Nand Yadav expired on 03.06.2003. Our
father during his lifetime informed us that initially he
was a partner of a firm named Sri Narain Raj Kumar
and he had retired from the said partnership firm very
long back and the partnership was dissolved and his
accounts stood settled in the said firm.
We are not in possession of any paper pertaining
to the said partnership firm and we are not aware as to
whether our father was also in possession of the same
or not. As far as we recall there was a severe termite
attack about a year and half prior to our father’s death,
in which all the papers pertaining to our father and our
papers which were lying at home were destroyed. On the
advice of the past controller all the paper which had
been damaged by termites in which there were termites
were burnt. We are not aware as to whether there was
any document pertaining to the partnership firm in those
papers or not. We have neither any knowledge withSignature Not Verified
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regard to the said firm as stated above nor we have any
document with regard to the said firm. We deny all the
allegation as stated by you as we have no knowledge
about the same.
After receipt of your notice we have thoroughly
searched all the places including our houses where we
usually keep papers but have not come across any paper
pertaining to any financial dealings of our father or any
paper related to the stated partnership Nor are we in
any way responsible for keeping or preserving any
documents pertaining to your client.
Please do not involve us in any legal dealings in
which your client might be indulging in as we are in
no way concerned with the affairs and are also never
were aware of the affaires of the said firm.”
40. Thus, it is submitted on behalf of Shri Chakradhari Surekha that since
the partnership firm was dissolved long back and accounts stood settled, the
legal heirs of Sh. Nitya Nand Yadav did not wish to claim any share.
41. However, it is highlighted by the ld. Counsel that despite taking this
position in reply to the notice, the legal heirs of Sh. Nitya Nand Yadav took a
stand to the contrary in the arbitral proceedings while filing a written
statement, though not actively participated in the proceedings. In the written
statement, the claim of legal heirs of Sh. Nitya Nand Yadav was that his share
was sold to Sh. Vishnu Kumar Surekha and Smt. Parmeshwari Devi who are
the husband and mother-in-law of the Smt. Prem Lata Surekha, respectively.
42. In any event, the submission on behalf of Shri Chakradhari Surekha is
that, the scope of interference under Section 37 of the Act being very narrow,
these are factual issues which did not fall within the ambit of Section 37 of
the Act. So long as there is no perversity, in his submission, the arbitral award
deserved to be given effect to.
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43. It is also submitted that this fact has also been brought to the notice of
the executing court where the matter is now pending.
44. On behalf of the Respondents, it is further submitted that invocation of
this arbitration was done on 23rd March, 2015 prior to the Amendment Act,
2015, coming into existence. In terms of Section 21 of the Act, the arbitration
commenced on 23rd March, 2015, just prior to the amendment itself, therefore,
the Arbitrator was not rendered functus officio.
45. It is also submitted that the Appellant is, in fact, operating through her
husband Shri Vishnu Surekha, who was instrumental in selling the middle
portion of the subject property to a third party, who sought intervention before
the Executing Court. The consideration from the said sale has also been
usurped by the Appellant. Under such circumstances, the arbitral award, as
also the impugned order of the ld. Single Judge is just and reasonable. The
Executing Court is presently going into the question as to how the equities are
to be balanced in terms of the Award.
46. It is further submitted on behalf of Shri Chakradhari Surekha that the
partnership deeds which were relied upon by the Appellant have not been
brought on record and this is clear from the evidence of ‘RW-2’ Mr. Manish
Kumar, before the ld. Arbitrator.
47. Section 31 of the Partnership Act is relied upon to argue that no change
in the partnership deed could have been brought about without the consent of
Shri Chakradhari Surekha.
48. Ld. Counsel for the Respondent reiterates the findings of the ld.
Arbitrator that Shri Chakradhari Surekha’s signature were not found in any
further subsequent deed, and therefore, the 1974 partnership deed has to be
considered as legal and valid. Finally, it is submitted that the Appellant’s
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conduct has been dishonest and, therefore, no interference is called for.
ANALYSIS & FINDINGS:
49. The primary ground that has been urged on behalf of the Appellant is
that the mandate of the ld. Arbitrator had come to an end, as, by the time the
second invocation took place on 12th July, 2016, the timelines in terms of the
Arbitration and Conciliation Act, 1996 (amendment Act of 2015) had come
into operation.
50. Thus, according to the Appellant, the mandate of the Arbitral Tribunal
came to end on 31st October, 2016. The short issue before the ld. Single Judge
was that the initial notice invoking arbitration was given on 23 rd March, 2015
and the said invocation was not accepted by the Appellant. Thereafter, the
second notice of invocation was issued on 12th July, 2016. The ld. Single
Judge, while addressing the said issue in the impugned order, observed as
under. In respect of the said issue, ld. Single Judge, vide the impugned order,
observed as under:
“28. The issue in the present case is no longer res
integra. Section 26 of the Amendment Act explicitly
provides that its provisions shall not apply to arbitral
proceedings that were initiated under Section 21 of the
Arbitration Act prior to the commencement of the
Amendment Act, unless the parties mutually agree to
their application. Consequently, the Amendment Act is
to be applied prospectively, barring a consensus for
retrospective applicability. The key issue for
determination before this Court is whether the time
limits prescribed under Section 29A would extend to
arbitral proceedings that were initiated before the
enactment of the Amendment Act.
29. It is significant to note that the Arbitration Act,
prior to its amendment in 2015, did not prescribe any
time limits for the issuance of an arbitral award. TheSignature Not Verified
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introduction of such time limits was brought about for
the first time through Section 29A, added by the
Amendment Act of 2015 w.e.f. 23.10.2015. As per
Section 21 of the Arbitration Act postulates that the
arbitral proceedings are deemed to commence on the
date the respondent receives a request for arbitration,
unless otherwise agreed by the parties. In the present
case, the arbitral proceedings commenced on
23.03.2015, when the notice invoking arbitration was
first sent, well before the enactment of the Amendment
Act. Accordingly, it must be concluded that Section
29A and the time limits stipulated therein are not
applicable to this arbitral proceeding.”
51. Insofar as the merits is concerned, the ld. Single Judge, observed as
under:
“18. Learned Counsel appearing for the
Respondents contends that the Petitioner along with Sh.
Nitya Nand Yadav was carrying on business from
02.04.1973. The partnership firm was re-constituted in
the year 22.07.1974 in the name and style of M/s Sri
Narain Raj Kumar. The partnership was carrying on
business of trading, manufacturing, export, import and
other businsess. It is stated that Sh. Nitya Nand Yadav
passed away in June, 2003 and his legal heirs were
never inducted as partners in the partnership firm. It is
stated that after the death of Sh. Nitya Nand Yadav,
there were only two partners left i.e., the Petitioner and
the Respondent No.1 and, therefore, the argument of the
Petitioner that the Petitioner had resigned from the
partnership firm in the year 1974 itself is not correct as
has been rightly found by the Arbitrator. It is stated that
after the death of the father of the Respondent, the
Respondent No.2 i.e., the brother of Respondent No.1
started creating problems. It is stated that the
Respondent No.1 was time and again requesting to
provide the current account of the firm which was beingSignature Not Verified
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denied by the Petitioner. It is stated that the Petitioner
was not responding to the request made by the
Respondent, then he tried to obtain certified copies of
the documents from D.D.A. in month of February, 2015.
It is stated that the Respondent has availed the entire file
of the property and he came to know that Vishnu Kumar
Surekha was acting in connivance with the Petitioner
and has fabricated the partnership deeds in their favour
and has claimed to be a partner of the partnership firm
namely M/s Sri Narain Raj Kumar. He states that it is
important to mention that the Rrespondent has neither
resigned from the partnership firm nor any dissolution
deed was ever executed by him. Hence, the subsequent
partnership deeds inducting Vishnu Kumar Surekha as
a partner are absolutely frivolous, false, and fabricated
with sole motive to deprive the Respondent from his
rightful share. It is stated that Respondent No.2 has no
concern with the partnership firm but he has illegally
and wrongfully fabricated partnership deeds and has
misappropriated the assets of the partnership firm by
selling the same. He further states that from the R.T.I.,
the Respondent has come to know that Vishnu Kumar
Surekha has illegally entered into an agreement to sell
with Mr. Umesh Garg and has taken Rs.30 Lakh from
him and has agreed to sell 1/3rd of the property. It is
stated that the said Mr. Umesh Garg has filed an FIR
against Vishnu Kumar Surekha in which it has been
proved on record that Vishnu Kumar Surekha was
neither the owner nor the partner of the firm. It is stated
that the status report of the concerned A.C.P. in the said
case mentioning that Vishnu Kumar Surekha is not a
partner of the partnership firm is already on record. He
states that the Respondent has filed a criminal
complaint against the Petitioner and has invoked the
arbitration clause. It is stated that on 01.08.2018, the
Hon’ble Delhi High Court was pleased to appoint this
Hon’ble Tribunal to adjudicate the dispute between the
parties. The Respondent has filed a claim enumeratingSignature Not Verified
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the above facts and has prayed an Award of partition of
property bearing no. Y-10, Naraina, New Delhi in two
equal shares by metes and bounds and the possession of
50% of the said property. He states that the respondent
has also sought the Award of declaration declaring the
alleged fake partnership deed as null and void apart
from the Award of rendition of accounts of the
partnership firm along with an Award of injunction
restraining the Respondents from creating any third
party interest or part with possession. It is stated that
the Tribunal has given the Award after giving adequate
opportunity to both the parties. It is stated that the
Tribunal after assessing the entire material has come to
the conclusion that the Petitioner herein (Respondent in
the arbitral proceedings) had neither resigned nor any
dissolution deed was executed to dissolve the
partnership prior to 2015. He contends that the CW-3 –
Assistant Director, DDA has affirmed that the original
lease deed of the suit property is in the name of the
partnership firm through its partners, namely,
Chakradhari Surekha, Premlata Surekha and Nitya
Nand Yadav and there is no other lease deed and the
property had been converted to freehold, thereby
demonstrating that the Petitioner continued in the firm.
He states that the Petitioner has failed to enter into
witness box and has given a power of attorney in favour
of Respondent No.2 who was already creating problems
in the firm.
19. It is contended by the learned Counsel for the
Respondent that Vishnu Kumar Surekha was
specifically asked to show any document whereby
Chakardhari Surekha had resigned from the firm but he
had failed to produce the same. It is stated that Mr.
Vishnu Kumar Surekha has admitted that the property
is in the name of firm having the then original partners.
It is stated that Vishnu Kumar Surekha has further
admitted that the Form No.1 of the partnership firm filed
by the Petitioner with written statement is different fromSignature Not Verified
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the Form No.1 marked as Mark S. It is submitted that it
is proved on record that Form No.1 and the record of
Registrar of Firm have been fabricated and
manipulated. It is stated that from the cross-
examination of Petitioner, it has been proved that
Vishnu Kumar Surekha has illegally sold the property.
It is stated that it was also specifically put to the said
witness as to whether there was any dissolution deed
signed by the Respondent to which no reply has been
given. It is stated that as per the settled principles of law,
the question as to whether the suit was barred by law or
not also must be judged from the aspect of cause of
action, and the rights and liability of the partner in
respect of partnership property would be discharged
only when the firm is finally wound up and the
properties of the firm are distributed. It is stated that
merely execution of dissolution deed will not discharge
the party thereto from their rights and liability as held
in Shreedhar Govind Kamerkar v. Yesahwant Govind
Kamerkar & Anr., (2006) 13 SCC 481. It is stated that
in the present case it is has been proved on record that
there is neither any dissolution deed nor any resignation
executed by the Respondent, therefore, the claim of the
Respondent is rightly allowed by the Arbitrator.
20. Heard learned Counsel for the parties and
perused the material on record.
21. The dispute is essentially between the
Respondent No.1 herein, who was the Claimant before
the arbitral proceedings and the Petitioner herein, who
was the Respondent before the arbitral proceedings.
Respondent No.2 is the husband of the Petitioner herein.
The parties are related to each other inasmuch as, the
Claimant i.e., Respondent No.1 herein and Respondent
No.2 are brothers and the Petitioner herein is the wife
of Vishnu Kumar Surekha who has not been arrayed as
Respondent in the present petition as he was dropped
during the arbitral proceedings. The dispute is
primarily in respect of a plot measuring 450 sq. yards.
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at Y-10, Naraina, New Delhi. As pointed by the
Arbitrator the dispute has its genesis in a partnership
firm which inter-alia was doing business of traders,
manufacturers, and importers in the name and style of
M/s Sri Narain Raj Kumar. The firm was doing the
business from 1973. It was primarily a family
partnership with two partners, namely, the Petitioner
and Respondent No.1 herein who belong to the same
family. Mr. Nitya Nand Yadav was also a part of the
partnership firm but he does not belong to the family of
the Petitioner and Respondent No.1. Mr. Nitya Nand
Yadav passed away in June, 2003. In addition to the said
three persons, two minor sons and a daughter of Shri
Rajkumar Surekha were also admitted to the
partnership but only as beneficiaries. The partnership
firm was re-constituted on 22.07.1974 whereby two
minor sons of Shri Rajkumar Surekha were dropped but
the minor daughter was continued as beneficiary. A
partnership deed dated 22.07.1974 containing the terms
and conditions of the partnership was drawn. The plot
which is the bone of contention was purchased on
24.01.1980 on a lease-hold basis in the name of the firm
M/s Narain Raj Kumar.”
52. In addition to this, the ld. Single Judge, who had made the reference of
the matter to the Arbitral Tribunal vide order dated 1 st August, 2018 in
Arbitration Petition No. 457/2017, clearly noted that there were two notices
for appointment of Arbitrator i.e., 23rd March, 2016 and 12th July, 2016. The
relevant portion of the said order is extracted below:
“20. The record shows that petitioner no. 1 had issued
two notices for appointment of an arbitrator. These
notices are dated 23.03.2015 and 12.07.2016.
20.1 Respondent no. 1 resisted appointment of an
arbitrator in the matter.
20.2 Clause 15 of the partnership deed dated
22.07.1974 reads as follows:
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“15. Any dispute arising out of this
partnership or as to it interpretation,
operations or enforcements of terms of
this partnership between parties or their
legal representatives shall be referred
for adjudication to the arbitrators.”
20.3 As it would be evident upon perusal of the said
clause, no one party has the right to appoint an
Arbitrator.
20.4 In any case, respondent no. 1 has lost its right to
have a say in the matter.
21. Accordingly, Ms. Rekha Sharma, Former Judge,
Delhi High Court is appointed as an Arbitrator in the
matter.”
53. Under such circumstances, the arbitration clause having been invoked
prior to the Amendment Act 2015 coming into existence, the time limits, as
stipulated under Section 29A of the Act would not be applicable to the facts
of this case.
54. Be that as it may, a perusal of the stamp paper with the arbitral award
also shows that the same was purchased on 22nd December, 2022. The parties
had thus, by consent, extended the mandate of the ld. Arbitrator and there is
nothing to show the contrary. Under such circumstances it has to be presumed
that the parties had, by consent, extended the mandate of the ld. Arbitrator.
55. In any event, in the present case, there is no doubt that since the
invocation of arbitration is prior to the Amendment Act, 2015 coming into
existence, the time limits prescribed therein would not apply.
56. Insofar as the other parties and their rights are concerned, i.e., Shri.
Nityanand Yadav and Smt. Rachna Kedia, Shri. Nityanand Yadav’s legal
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heirs had clearly taken the stand in their reply before ld. Arbitrator that they
are not involved in the affairs of the partnership firm and that their father,
during his lifetime had settled his accounts with the firm.
57. Insofar as Smt. Rachna Kedia is concerned, she was initially
represented before the ld. Arbitrator but, thereafter, chose to withdraw from
the proceedings.
58. Thus, the submission of Mr. Rajshekhar Rao, ld. Sr. Counsel that the
said parties had stakes in the partnership firm and, therefore, the division of
the property in terms of the arbitral award is not valid, is a completely
meritless argument inasmuch as, once the stand of both Shri. Nityanand
Yadav and Smt. Rachna Kedia had been placed before the ld. Arbitrator and
they had shown no interest in claiming any rights in the assets of the firm they
could not have been forced to participate in the arbitration proceedings.
59. The next aspect is in respect of the various partnership deeds and their
impact. The ld. Arbitrator has undertaken a detailed analysis of all the
partnership deeds which were relied upon by the parties. While the Claimant-
Shri Chakradhari Surekha had placed the same in support of his prayer for
declaratory relief, the Respondent- Smt. Prem Lata Surekha was relying upon
the same to argue that the initial partnership deed stood re-constituted.
60. However, the ld. Arbitrator unequivocally and categorically, after
analysing all the documents and comparing the same with the official records
of the Registrar of Firms, came to the conclusion that the said documents had
not been proved. In any case, Shri. Chakradhari Surekha had never resigned
from the firm, nor had he agreed for reconstitution.
61. The ld. Arbitrator has proceeded strictly in terms of the partnership
deed and has held that since there are only two surviving partners i.e., Shri.
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Chakradhari Surekha and Smt. Prem Lata Surekha they are both entitled to
50% each of the suit property. The relief of partition in two equal shares is,
therefore, just and valid.
62. This being the factual analysis done by the ld. Arbitrator and the same
being upheld by ld. Single Judge in exercise of its jurisdiction under Section
34 of the Act, the same does not warrant interference of this Court at the stage
of Section 37 of the Act, as the grounds under Section 37 are limited.
63. The Supreme Court, in its decision titled MMTC Limited v. Vedanta
Limited [2019 SCC OnLine SC 220] discussed that the authority of the Court
under Section 37 of the Act is clearly restricted to the same grounds as set out
in Section 34 of the Act, so that appeals do not exceed the limits of judicial
interference established for first tier challenges to arbitral awards. In the said
decision, the Supreme Court held as under:
“14. As far as interference with an order made under
Section 34, as per Section 37, is concerned, it cannot be
disputed that such interference under Section 37 cannot
travel beyond the restrictions laid down under Section 34.
In other words, the court cannot undertake an
independent assessment of the merits of the award, and
must only ascertain that the exercise of power by the
court under Section 34 has not exceeded the scope of the
provision. Thus, it is evident that in case an arbitral award
has been confirmed by the court under Section 34 and by
the court in an appeal under Section 37, this Court must
be extremely cautious and slow to disturb such concurrent
findings.”
64. Recently, the Supreme Court, in Konkan Railway Corporation Limited
v. Chenab Bridge Project [(2023) 9 SCC 85], while re-iterating the position
on the scope of interference of Court in an appeal under Section 37 of the Act,
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held that the scope of jurisdiction under Section 34 and Section 37 of the Act
is not like a normal appellate jurisdiction and courts should not interfere with
the arbitral award lightly in a casual and a cavalier manner. The mere
possibility of an alternative view on facts or interpretation of the contract does
not entitle the courts to reverse the findings of the arbitral tribunal.
65. In view of the analysis made above, and in light of the settled legal
position, this Court opines that the present appeal is bereft of any merit.
66. Accordingly, this appeal is dismissed and disposed of. Pending
applications, if any, are also disposed of.
67. Costs of Rs. 1,00,000/- are also imposed on the Appellant, to be paid to
the Respondent- Shri Chakradhari Surekha, within a period of 2 weeks,
considering that even in this appeal, all reasonable proposals for amicable
resolution were refuted by the Appellant. Further, the Appellant has sold 1/3rd
of the subject land without permission of the other partner of the firm. The
conduct of the Appellant is thus, not bonafide.
68. List for compliance on 25th May, 2026.
PRATHIBA M. SINGH
JUDGE
MADHU JAIN
JUDGE
APRIL 21, 2026
dj/ss
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