Bombay High Court
Vinod Kumar Saraf vs Villayati Ram Mittal on 14 July, 2026
Author: Amit Borkar
Bench: Amit Borkar
carbpl13434-2026-J.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO.13434 OF 2026
Vinod Kumar Saraf ... Petitioner
Vs.
1. Villayati Ram Mittal
2. Surinder Kumar Mittal
3. Asha Mittal
4. Gobind Mittal
ATUL
5. Gopal Mittal
GANESH
KULKARNI 6. The Registrar of Firm/Society,
Digitally signed by
ATUL GANESH
KULKARNI
District South East ... Respondents
Date: 2026.07.14
11:54:10 +0530
Mr. Mayur Khandeparkar with Mr. Muttahar Khan, Mr.
Anand R. Pai, Mr. Sachin Mhatre, Mr. Sujit Rao, Ms.
Smriti Yadav, and Mr. Roshan Reji i/by Mhatre Law
Associates for the petitioner.
Mr. Simil Purohit, Senior Advocate with Mr. Rashmin
Khandekar i/by Mr. Mohit Sant for respondent Nos. 1
to 5.
CORAM : AMIT BORKAR, J.
RESERVED ON : JULY 8, 2026.
PRONOUNCED ON : JULY 14, 2026
JUDGMENT:
1. By this petition filed under Section 9 of the Arbitration and
Conciliation Act, 1996, the petitioner is seeking urgent interim
protection against the respondents. According to the petitioner, the
1
carbpl13434-2026-J.doc
respondents have acted in breach of the Partnership Deed dated 16
April 2014. It is alleged that respondent No. 2 has violated his
duties as a partner, acted dishonestly, and falsely shown that the
petitioner had retired from the partnership firm. It is also the case
of the petitioner that the respondents are trying to forcibly remove
him from the premises which form part of the assets of the
partnership firm situated at Mumbai.
2. The facts leading to the filing of the present petition, as
stated by the petitioner, are as follows. The petitioner claims that
he is a partner of respondent No. 1 firm, namely M/s Villayati Ram
Mittal, holding a 5% share under the reconstituted Partnership
Deed dated 16 April 2014, which came into effect from 31 March
2014. Respondent No. 1 is a registered partnership firm bearing
Serial No. 1749/79. It was established by Late Shri Villayati Ram
Mittal in the year 1979 and is engaged in the business of execution
of works contracts and other related activities. The firm has its
branch office at Navi Mumbai and its registered office at New
Delhi. According to the petitioner, the firm owns substantial assets
and properties situated at different places, having an approximate
value of more than Rs.1,500 Crores. It is the petitioner’s case that
his 5% share in the firm is worth about Rs.75 Crores. The
petitioner further states that the assets of the firm include three
residential premises, namely, Flat No. A-502, Flat No. A-104
together with three stilt car parking spaces at Krishna Regency,
Datta Mandir Road, Vakola, Santacruz (East), Mumbai, and Flat
No. C-42 at Park Avenue, R.T.O. Lane, Andheri (West), Mumbai.
These premises are the subject-matter of the present petition.
2
carbpl13434-2026-J.doc
3. According to the petitioner, respondent No. 2, Mr. Surinder
Kumar Mittal, is his brother-in-law and is the controlling partner of
respondent No. 1 firm, holding a 95% share. It is alleged that
respondent No. 2 has complete control over the management,
accounts, and records of the firm. The petitioner alleges that
respondent No. 2 has acted against his duties as a partner and has
taken several actions which are harmful to the petitioner’s rights
and interest. It is further alleged that the claim that the petitioner
has retired from the partnership firm is false, fraudulent and not
legally valid. According to the petitioner, the respondents have not
produced any undisputed Retirement Deed or any other legal
document to show that the petitioner has retired from the firm.
4. Without prejudice to the above contentions, the petitioner
submits that even if it is assumed, without admitting, that he had
retired from the partnership firm, such retirement is void and has
no legal effect for the following reasons. Firstly, no amount has
been paid to the petitioner towards the value of his 5% partnership
share. Secondly, no settlement of accounts has taken place. Thirdly,
no statement of accounts, balance sheet or profit and loss account
has been prepared at the time of the alleged retirement. Fourthly,
no valuation of the partnership assets has been carried out. Lastly,
there has been no distribution of the assets, profits or liabilities of
the partnership firm.
5. The petitioner further states that respondent Nos. 3 to 5
have been brought in as new partners of respondent No. 1 firm
under a purported Reconstituted Partnership Deed dated 14
December 2024 by wrongly showing that the petitioner had retired
3
carbpl13434-2026-J.doc
from the partnership. According to the petitioner, further inquiry
revealed that fabricated documents were prepared to falsely show
his retirement. These include an alleged Indemnity Bond dated 18
February 2025 and an Affidavit dated 18 February 2025, which
was allegedly notarised on 24 February 2025. It is also alleged that
on the basis of these documents, respondent No. 6 issued Form
dated 25 March 2025 showing “Vinod Kishan Saraf” as the
outgoing partner, though, according to the petitioner, this is not his
correct legal name.
6. In the above background, the petitioner, through his
Advocates, issued a notice dated 7 March 2026 invoking
arbitration under Section 21 of the Arbitration and Conciliation
Act, 1996. On the same day, the petitioner also issued a notice
seeking dissolution of respondent No.1-partnership firm. According
to the petitioner, respondent Nos.1 to 5 thereafter filed three
eviction suits, being L.E. Suit Nos.23, 24, and 25 of 2026 before
the Small Causes Court at Mumbai, Bandra Division, seeking
possession of the suit premises. The petitioner contends that these
suits have been filed in breach of the arbitration agreement
contained in Clause 16 of the Reconstituted Partnership Deed
dated 16 April 2014, which governs all disputes between the
partners, including disputes relating to the suit premises forming
part of the partnership assets. It is the petitioner’s case that the
filing of these suits is an attempt to avoid the agreed dispute
resolution mechanism and to defeat the interim protection sought
in the present proceedings. On these grounds, the petitioner has
filed the present arbitration petition.
4
carbpl13434-2026-J.doc
7. In the present petition, the petitioner has prayed for interim
reliefs. The petitioner seeks an order restraining respondent Nos. 1
to 5 from prosecuting or taking any further steps in L.E. Suit Nos.
23, 24, and 25 of 2026 pending before the Small Causes Court,
Mumbai. The petitioner has also sought stay of the said suits and a
direction that no interim or final order adverse to him be passed in
those proceedings until completion of the arbitral proceedings or
until further orders of this Court. The petitioner has further prayed
for an injunction restraining respondent Nos.1 to 5 from selling,
transferring, creating third party rights or otherwise dealing with
the assets of respondent No. 1 firm, including the three flats
described in the petition. The petitioner has also sought an order
restraining respondent No.6 from acting upon the alleged Affidavit
and Indemnity Bond dated 18 February 2025 and a direction to
respondent No.6 to produce those documents before this Court
and not to act upon any change in the constitution of the
partnership firm based on those documents. Lastly, the petitioner
has prayed for appointment of the Court Receiver, High Court,
Bombay, or any other suitable person, as Receiver of the assets of
respondent No.1 firm with such powers as this Court may consider
appropriate.
8. Mr. Mayur Khandeparkar, learned Advocate appearing for
the petitioner, submitted that the petitioner has made out a strong
prima facie case. According to him, the Partnership Deed dated 16
April 2014, Form V dated 20 May 2014 and the subsequent
statutory records clearly show that the petitioner continues to be a
partner of respondent No.1 firm holding a 5% share. He submitted
5
carbpl13434-2026-J.doc
that respondent Nos.1 to 5 have already filed eviction suits before
the Small Causes Court in respect of the said premises and are
actively prosecuting those proceedings. According to him, those
proceedings are based on suppression of material facts and
misrepresentation. He submitted that unless interim protection is
granted, the petitioner is likely to be dispossessed from the
partnership properties, which would defeat the very purpose of the
arbitration proceedings.
9. Learned Advocate for the petitioner submitted that Clause 5
of the Partnership Deed dated 16 April 2014 provides that the
principal place of business of the firm shall be at the place where
the work is being carried out. He submitted that all substantial
business activities of the firm have, in recent years, been
conducted from Mumbai. Therefore, according to him, the seat of
arbitration has to be treated as Mumbai. He submitted that this
Court, therefore, has supervisory jurisdiction over the arbitral
proceedings and is competent to entertain the present petition
under Section 9 of the Arbitration and Conciliation Act, 1996.
10. He further submitted that a substantial part of the cause of
action has arisen within the territorial jurisdiction of this Court.
According to him, the partnership assets requiring protection are
situated in Mumbai, the eviction notice dated 11 March 2026 was
issued in respect of the Mumbai properties, the threats of
dispossession have arisen in Mumbai, and the petitioner’s rights
are being affected within the jurisdiction of this Court. He
submitted that the entire dispute has a direct connection with
Mumbai. The partnership properties are situated in Mumbai, the
6
carbpl13434-2026-J.doc
eviction notices have been received in Mumbai and, for all
practical purposes, the business of the firm is being carried on
from Mumbai. He submitted that the seat of arbitration must,
therefore, be taken to be Mumbai and this Court alone has
supervisory jurisdiction over the arbitral proceedings. On this
basis, he submitted that the objection to the jurisdiction of this
Court deserves to be rejected.
11. Mr. Khandeparkar further submitted that the question,
whether one partner has the authority to file eviction proceedings
against another partner cannot be decided by the Small Causes
Court where the three eviction suits are pending. He submitted
that for deciding territorial jurisdiction in proceedings under
Section 9 of the Arbitration and Conciliation Act, the nature of the
relief sought in the Section 9 petition is the relevant consideration.
According to him, the concept of primary relief, which is applicable
to civil suits, cannot be applied to proceedings under Section 9
because a party may seek different reliefs before the Arbitral
Tribunal while limiting the reliefs sought before the Court under
Section 9. He submitted that the registered office of the
partnership firm is not the deciding factor for determining
jurisdiction in the present case, since the relief sought is an
injunction against proceedings pending before Courts situated
within the territorial jurisdiction of this Court. He also submitted
that the projects undertaken by the firm and its business activities
are carried on in Mumbai.
12. Placing reliance on Section 42 of the Arbitration and
Conciliation Act, 1996, learned Advocate submitted that where the
7
carbpl13434-2026-J.doc
parties have not agreed upon the seat of arbitration, an application
under Section 9 can be filed before a Court within whose
jurisdiction a part of the cause of action has arisen. He submitted
that once such an application is filed, that Court alone will have
jurisdiction over all subsequent arbitral proceedings in view of
Section 42 of the Act. In support of this submission, he relied upon
the judgment of the Supreme Court in BGS SGS SOMA JV vs.
NHPC Limited, (2020) 4 SCC 234.
13. Learned Advocate further relied upon the judgment of the
Supreme Court in Sumer Builders Private Limited vs. Narendra
Gorani, (2016) 2 SCC 582, and submitted that Sections 16, 17, 20,
and 120 of the Code of Civil Procedure are not applicable to the
High Court while exercising its original civil jurisdiction. According
to him, the territorial jurisdiction of this Court is governed by
Clause 12 of the Letters Patent.b
14. He also relied upon the judgment of the Supreme Court in
Patel Roadways Limited, Bombay vs. Prasad Trading Company,
(1991) 4 SCC 270. He submitted that the Explanation to Section
20 of the Code of Civil Procedure makes it clear that where a
defendant has both a principal office and a subordinate office, and
the cause of action arises at the place where the subordinate office
is situated, jurisdiction will lie with the Court within whose
territorial limits the subordinate office is located. According to
him, the location of the subordinate office is therefore relevant for
deciding territorial jurisdiction where the cause of action has
arisen there.
8
carbpl13434-2026-J.doc
15. Per contra, Mr. Purohit, learned Senior Advocate appearing
for the respondents, raised a preliminary objection to the territorial
jurisdiction of this Court. He submitted that the registered office of
respondent No. 1 firm is situated at Delhi and the books of account
of the firm are also maintained there. Placing reliance on the
judgment of the Supreme Court in Addanki Narayanappa & Anr.
vs. Bhaskara Krishtappa & Ors., 1966 SCC OnLine SC 6, he
submitted that the interest of a partner in a partnership firm is
movable property. He submitted that a suit seeking dissolution of a
partnership and rendition of accounts cannot be treated as a suit
for land merely because the assets of the firm include immovable
properties. According to him, once a partner brings any property
into the partnership, that property becomes the property of the
partnership firm. He submitted that the Supreme Court, while
deciding the said case, had considered a situation where the assets
of the partnership included immovable properties situated outside
the jurisdiction of the Court and held that such a suit would still
not become a suit for land. Inviting attention to paragraph 13 of
the notice invoking arbitration, he submitted that the petitioner
himself had sought dissolution of the partnership firm.
16. In reply to the contention regarding the powers of the Small
Causes Court, learned Senior Advocate submitted that the Small
Causes Court is competent to decide disputes relating to possession
between the parties where the claim arises out of the relationship
of licensor and licensee.
17. Learned Senior Advocate further submitted that there can be
only one seat of arbitration and not different seats depending upon
9
carbpl13434-2026-J.doc
the location of different partnership properties. According to him,
if the petitioner’s submission is accepted, the existence of
partnership properties at different places would result in more
than one seat of arbitration, which is not permissible in law. He
submitted that Section 16 of the Code of Civil Procedure, 1908
applies even to proceedings under Section 9 of the Arbitration and
Conciliation Act, 1996. According to him, the reliefs sought in the
present petition are not reliefs for enforcement of rights in
immovable property. Placing reliance upon the decision of the
Privy Council in Luchmee Chund & Others vs. Zorawur Mull &
Others, 1860 SCC OnLine PC 14, he submitted that the place
where the partnership business is centrally conducted, where the
partnership books are maintained, and where the partners
ordinarily refer to those books for ascertaining the state of
accounts, are the relevant factors for determining jurisdiction.
18. Learned Senior Advocate also relied upon the judgment of
the Madhya Pradesh High Court in Ratan Lalchandani vs.
Gopaldas Kukreja, ILR 2023 M.P. 1013. He submitted that while
considering proceedings under Section 37 of the Arbitration and
Conciliation Act, 1996, the Court held that the place where the
registered office of the dissolved partnership firm is situated and
where its accounts are maintained forms part of the cause of action
and confers territorial jurisdiction upon that Court.
19. Lastly, learned Senior Advocate relied upon the judgment of
the Supreme Court in Firm Ashok Traders & Anr. vs. Gurumukh
Das Saluja & Ors., (2004) 3 SCC 155, and submitted that a person
who is not a party to the arbitration agreement cannot seek
10
carbpl13434-2026-J.doc
protection under Section 9 of the Arbitration and Conciliation Act,
1996. He also relied upon the judgment of the Supreme Court in
BBR (India) Private Limited vs. S.P. Singla Constructions Private
Limited, (2023) 1 SCC 693, and submitted that the seat of
arbitration must be certain, fixed, and definite. According to him,
it cannot remain uncertain or capable of changing, as the parties
must clearly know the Court before which judicial remedies are to
be pursued. On these grounds, he submitted that the present
arbitration petition deserves to be dismissed.
20. Having considered the rival submissions, the pleadings, the
documents placed on record and the authorities cited by both
sides, in my opinion, the following principal questions arise for
determination:
(i) Whether this Court possesses territorial jurisdiction to
entertain the present petition under Section 9 of the
Arbitration and Conciliation Act, 1996?
(ii) Whether the present dispute substantially concerns
partnership rights governed by the arbitration agreement or
whether it primarily relates to possession of immovable
property?
(iii) Whether the petitioner has established a prima facie
case that he continues to be a partner of respondent No.1
firm and that the alleged retirement is prima facie
unsupported by law?
(iv) Whether the institution of eviction proceedings before
the Small Causes Court affects the maintainability of the11
carbpl13434-2026-J.docpresent petition or the jurisdiction of this Court under
Section 9 of the Arbitration and Conciliation Act?
(v) Whether the petitioner has made out a case for grant of
interim protection pending arbitral proceedings?
21. The first objection raised by the respondents goes to the root
of the present proceedings. According to the respondents, this
Court lacks territorial jurisdiction to entertain the petition. The
petitioner contends that this Court possesses jurisdiction because
parts of the cause of action have arisen in Mumbai and the
arbitration agreement indicates that Mumbai is the juridical seat of
arbitration. Since jurisdiction is questioned, it becomes necessary
to first examine the statutory scheme in respect of jurisdiction
under the Arbitration and Conciliation Act, 1996.
22. Section 9 of the Arbitration and Conciliation Act empowers
the Court to grant interim measures before commencement of
arbitral proceedings, during arbitral proceedings and after the
arbitral award is made but before its enforcement under Section
36. The provision reads thus:
“9. Interim measures, etc., by Court.–A party may, before
or during arbitral proceedings or at any time after the
making of the arbitral award, but before it is enforced in
accordance with section 36, apply to a Court…”
23. Thus, the jurisdiction under Section 9 is conferred upon the
“Court” as defined under the Act. The expression “Court” has
importance while deciding the present objection.
12
carbpl13434-2026-J.doc
24. Section 2(1)(e) of the Arbitration and Conciliation Act
defines “Court” as follows:
“2(1)(e). ‘Court’ means–
(i) in the case of an arbitration other than international
commercial arbitration, the principal Civil Court of original
jurisdiction in a district, and includes the High Court in
exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject
matter of the arbitration if the same had been the subject
matter of a suit…”
25. The expression used by the Legislature is “subject matter of
the arbitration” and not “subject matter of the suit”. The distinction
between these expressions has been considered by the Supreme
Court.
26. Section 20 of the Arbitration and Conciliation Act provides as
under:
“20. Place of arbitration.–
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1),
the place of arbitration shall be determined by the Arbitral
Tribunal having regard to the circumstances of the case,
including the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the
Arbitral Tribunal may, unless otherwise agreed by the parties,
meet at any place it considers appropriate for consultation
among its members, for hearing witnesses, experts or the
parties, or for inspection of documents, goods or other
property.”
13
carbpl13434-2026-J.doc
27. A plain reading of Section 20 shows that the Legislature has
distinguished between the “place of arbitration” agreed by the
parties and the place where hearings may be conducted for
convenience. This distinction is well settled by decisions of the
Supreme Court.
28. Section 42 of the Arbitration and Conciliation Act has
relevance. It provides that where with respect to an arbitration
agreement any application under Part I has been made in a Court,
that Court alone shall have jurisdiction over the arbitral
proceedings and all subsequent applications arising out of that
agreement. Thus, before Section 42 can operate, it must be found
that the Court before which the first application is instituted is a
Court having jurisdiction under the Act.
29. The constitutional bench decision of the Supreme Court in
Bharat Aluminium Company v. Kaiser Aluminium Technical
Services Inc., (2012) 9 SCC 552 (BALCO), explained the concept
of seat of arbitration. The Supreme Court held that the seat of
arbitration is the “centre of gravity” of arbitral proceedings. The
Court observed that while hearings may take place at different
locations, such places do not necessarily become the seat of
arbitration. The distinction between “seat” and “venue” is
important to arbitration law.
30. The Supreme Court in BBR (India) Private Limited, after
considering BALCO, held that the seat of arbitration determines
the Court exercising supervisory jurisdiction over the arbitral
proceedings. The Court observed:
14
carbpl13434-2026-J.doc
“The expression ‘seat of arbitration’ is the centre of gravity in
arbitration. However, this does not mean that all arbitration
proceedings must take place at the seat. The arbitrators at
times hold meetings at more convenient locations.”
31. The Supreme Court explained that the expression “Court” in
Section 2(1)(e) cannot be understood independent of Section 20
and that the statutory provisions must be read harmoniously.
32. In paragraph 16 of the said judgment, the Supreme Court
referred to its decision in BGS SGS Soma JV and observed that the
expression “subject matter of arbitration” in Section 2(1)(e) should
not be confused with the expression “subject matter of the suit”.
The purpose of Section 2(1)(e) is to identify the Court exercising
supervisory jurisdiction over arbitral proceedings. The Court
observed that Section 20 of the Arbitration and Conciliation Act
becomes determinative while deciding the question relating to the
seat of arbitration. The decision in BGS SGS Soma JV examined
the scheme in detail. The Supreme Court held that Section 20
gives freedom to the parties to designate the seat of arbitration.
Once the parties choose the seat, such choice becomes equivalent
to an exclusive jurisdiction clause. The Court exercising
jurisdiction over the seat exercises supervisory jurisdiction over the
arbitral proceedings.
33. Paragraph 38 of BGS SGS Soma extracted in BBR (India)
reads as under:
“Where parties have selected the seat of arbitration in their
agreement, such selection would then amount to an
exclusive jurisdiction clause, as the parties have now
indicated that the courts at the seat would alone have15
carbpl13434-2026-J.docjurisdiction to entertain challenges against the arbitral
award…”
34. The Supreme Court thus observed that once parties choose a
juridical seat, the jurisdiction of the Courts at that place stands on
a different footing from ordinary principles dealing with territorial
jurisdiction under the Code of Civil Procedure. The Supreme Court
held that situations may arise where the parties have not
designated a seat of arbitration. In such cases, the Court explained
that the provisions of Section 20(2) become relevant, and the
surrounding circumstances have to be examined for identifying the
juridical seat.
35. In BBR (India), the Supreme Court explained that Section
20(1) confers freedom upon the parties to choose the place of
arbitration. The judgment states that the parties are free to select a
place having no connection whatsoever with the cause of action.
Such freedom flows from the principle of party autonomy which
forms the foundation of arbitration law.
36. The Supreme Court observed that Section 20(3) serves a
different purpose. Hearings may be held at any location for
recording evidence, hearing witnesses, consultation amongst
members of the Tribunal or inspection of documents. Merely
because hearings are held at a particular place, that place does not
become the juridical seat unless the agreement or surrounding
circumstances indicate such intention.
37. Another aspect considered in BBR (India) is the concept of
concurrent jurisdiction noticed in paragraph 96 of BALCO. The
16
carbpl13434-2026-J.doc
Supreme Court observed that BALCO recognizes two classes of
Courts, namely, the Court where the cause of action arises and the
Court where arbitration is seated. However, once the parties
designate the seat of arbitration, the Courts at the seat alone
exercise supervisory jurisdiction over arbitral proceedings. The
existence of cause of action elsewhere loses significance so far as
supervisory jurisdiction under the Arbitration and Conciliation Act
is concerned.
38. The Supreme Court considered the principle laid down in
Indus Mobile Distribution Private Limited v. Datawind Innovations
Private Limited, (2017) 7 SCC 678, that the moment the parties
designate a seat of arbitration, such designation becomes akin to
an exclusive jurisdiction clause. Consequently, the Courts situated
at the seat exercise jurisdiction under the Arbitration and
Conciliation Act in relation to arbitral proceedings.
39. Paragraph 82 of BGS SGS Soma, has been approved in BBR
(India). The Supreme Court held that where the arbitration clause
merely states that arbitration proceedings “shall be held” at a
particular place, such place becomes the juridical seat unless there
are contrary indications showing that the parties intended it to be
a convenient venue. However, where the agreement merely
permits meetings or hearings at different places for convenience,
such locations remain venues and do not become the seat of
arbitration.
40. These authorities lay down certain well settled propositions.
Firstly, the seat of arbitration is the juridical centre of arbitral
17
carbpl13434-2026-J.doc
proceedings. Secondly, the seat is distinct from the venue of
hearings. Thirdly, where the parties have designated the seat, the
Courts at that place exercise supervisory jurisdiction. Fourthly,
where the seat has not been designated, the Court must ascertain
it from the arbitration agreement and surrounding circumstances
by applying Section 20 of the Arbitration and Conciliation Act.
Lastly, only after the seat cannot be ascertained would it become
necessary to examine other factors recognized under the Act.
41. The respondents have relied upon these authorities to
contend that the registered office of the partnership being situated
at New Delhi and the books of account being maintained there,
Mumbai cannot become the seat of arbitration merely because
some partnership properties are situated within Mumbai.
According to them, the seat must remain fixed. The petitioner
submits that the Partnership Deed does not designate any seat of
arbitration and, therefore, the surrounding circumstances
including the place where the partnership business is carried on
and where the disputes have arisen become relevant.
42. In my prima facie opinion, the provisions and the decisions
referred to above establish the legal principles governing the
concept of seat, venue and supervisory jurisdiction. However, these
authorities do not conclude the present controversy. Before
deciding whether this Court possesses territorial jurisdiction, it is
necessary to examine whether Mumbai can be regarded as the
juridical seat of arbitration or whether the question must be
determined by applying the principles governing accrual of cause
of action.
18
carbpl13434-2026-J.doc
43. Having considered the statutory scheme relating to the
concept of “Court”, “seat” and “venue”, it becomes necessary to
examine the submission advanced by both sides regarding
territorial jurisdiction based upon the cause of action. According to
the petitioner, assuming that the seat of arbitration is not specified
in the Partnership Deed, this Court would possess territorial
jurisdiction because parts of the cause of action have arisen within
Mumbai. The respondents submit that the dispute concerns
dissolution of partnership and rendition of accounts, the registered
office of the firm is at Delhi, the books of account are maintained
there, and therefore this Court cannot assume jurisdiction merely
because some of the partnership assets are situated in Mumbai.
44. The expression “cause of action” has not been defined in the
Code of Civil Procedure. However, its meaning has been explained
by prcedents. In Rattan Singh Associates (P) Ltd. v. Gill Power
Generation Co. (P) Ltd., 2007 SCC OnLine Del 19, after
considering several judgments of the Supreme Court, the Delhi
High Court in para 16 observed:
“In civil proceedings, ’cause of action’ is understood to mean
every fact, which, if traversed, would be necessary for the
plaintiff to prove in order to support his right to the
judgment of the court. It is that bundle of facts which, taken
together with the applicable law, entitles the plaintiff to relief
against the defendant.”
45. Thus, every fact pleaded does not become part of the cause
of action. Only those facts which are necessary to obtain the relief
constitute the cause of action.
19
carbpl13434-2026-J.doc
46. The Supreme Court in Union of India v. Adani Exports Ltd. ,
(2002) 1 SCC 567, while dealing with territorial jurisdiction,
observed that each and every fact pleaded in a petition does not
confer jurisdiction. Only those facts which have a direct nexus with
the dispute are relevant. The Supreme Court observed in para 17:
“Each and every fact pleaded by the respondents … does not
ipso facto lead to the conclusion that those facts give rise to
a cause of action … Facts which have no bearing with the lis
or the dispute involved in the case, do not give rise to a
cause of action.”
47. Therefore, while considering territorial jurisdiction, the
Court must separate material facts from incidental facts.
48. Similar observations were made in State of Rajasthan v.
Swaika Properties, (1985) 3 SCC 217, wherein service of
acquisition notice at Calcutta was held insufficient to confer
jurisdiction upon the Calcutta High Court because the acquisition
proceedings related to land situated in Rajasthan. In National
Textile Corporation Ltd. v. Haribox Swalram, (2004) 9 SCC 786,
the Supreme Court held that carrying on business or receiving
correspondence at a particular place does not constitute an
integral part of the cause of action.
49. In Oil and Natural Gas Commission v. Utpal Kumar Basu ,
(1994) 4 SCC 711, the Supreme Court deprecated attempts to
invoke jurisdiction on the basis of facts having a remote
connection with the dispute. The Court held that reading a tender
notice, submitting an offer or sending representations from a
particular place would not constitute integral parts of the cause of
20
carbpl13434-2026-J.doc
action where the contract was to be considered, awarded and
performed elsewhere. The Supreme Court observed that Courts
should guard against assumption of jurisdiction merely because
insignificant event has taken place within their territorial limits, as
such practice encourages forum shopping.
50. The Delhi High Court in Engineering Projects (India) Ltd. v.
Greater Noida Industrial Development Authority, 2004 SCC
OnLine Del 546, after analyzing Patel Roadways Ltd., Utpal Kumar
Basu, South East Asia Shipping Co. and other judgments, held that
where more than one Court may possess jurisdiction, preference
should be given to the Court where the cause of action has
substantially arisen. The Court observed that such an approach
minimises litigation expenses and discourages forum shopping.
51. In the same judgment, the Delhi High Court relied upon the
Division Bench decision in Sector Twenty One Owners Welfare
Association v. Air Force Naval Housing Board, (1997) 65 DLT 81,
and observed that a insignificant part of the cause of action is not
sufficient to confer jurisdiction. What is relevant is the place where
the substantial controversy has arisen.
52. The principle was summarised in Rattan Singh Associates,
wherein the Delhi High Court held that while examining an
objection regarding territorial jurisdiction, the Court must consider
the pleadings as they stand without entering into their
truthfulness, identify the facts having nexus with the controversy
and determine whether facts have arisen within its territorial
limits. The Court observed that even where jurisdiction exists, the
21
carbpl13434-2026-J.doc
doctrine of forum convenience may justify refusal to entertain the
proceedings if another Court has a much closer connection with
the dispute.
53. The respondents have placed reliance upon these authorities.
According to them, the registered office of respondent No.1
partnership firm is situated at New Delhi. The books of account are
maintained there. The alleged retirement from partnership
concerns settlement of partnership rights and accounts. Therefore,
they submit that the principal cause of action cannot be shifted to
Mumbai merely because some partnership properties happen to be
situated there. The petitioner has distinguished these authorities
by contending that the present dispute is not merely about
settlement of accounts. According to the petitioner, the relief
sought in the present petition is protection against dispossession
from partnership properties situated in Mumbai, restraint against
prosecution of eviction proceedings pending before the Small
Causes Court at Mumbai and protection of partnership assets
located within the jurisdiction of this Court. It is therefore argued
that the threatened injury has arisen within Mumbai and
constitutes an integral part of the present cause of action.
54. At this stage, it becomes necessary to notice the decision in
Patel Roadways Ltd.. The Supreme Court held that where a
corporation has a subordinate office at the place where the cause
of action has arisen, jurisdiction lies before the Court having
jurisdiction over that place rather than the place where the
principal office is situated. The Supreme Court observed in para 13
as under:
22
carbpl13434-2026-J.doc
“It would be a great hardship if, in spite of the corporation
having a subordinate office at the place where the cause of
action arises … such plaintiff is compelled to travel to the
place where the corporation has its principal place.”
55. The judgment holds that the place where the substantial
cause of action arises has more importance than the location of the
principal office.
56. The petitioner relies upon the aforesaid principle to submit
that although the registered office of respondent No.1 is situated
at Delhi, the substantial business activities in recent years have
been carried out from Mumbai, the partnership properties are
situated at Mumbai, eviction proceedings have been instituted
before the Mumbai Court and the dispossession is also sought to be
implemented within Mumbai. According to the petitioner, these
facts constitute material parts of the cause of action. The
respondents contend that the dispute concerns retirement from
partnership, dissolution of partnership and settlement of accounts.
According to them, the mere existence of immovable properties in
Mumbai cannot alter the nature of the dispute. They submit that
the authorities relied upon by the petitioner recognize that
incidental facts cannot determine territorial jurisdiction.
57. Prima facie, neither of these submissions can be accepted.
The authorities discussed above establish that territorial
jurisdiction cannot be determined either looking at the place
where immovable properties are situated or merely by referring to
the registered office of the partnership. Jurisdiction cannot be
assumed solely because eviction proceedings are pending before a
23
carbpl13434-2026-J.doc
Court situated within a particular territory. What is required is
identification of material facts which constitute the foundation of
the relief sought under Section 9 of the Arbitration and
Conciliation Act.
58. The reliefs claimed in the petition are not confined to
rendition of accounts or dissolution of partnership. The petitioner
seeks restraint against prosecution of three eviction suits pending
before the Small Causes Court at Mumbai, seeks protection against
dispossession from partnership premises situated at Mumbai, seeks
restraint against alienation of those partnership assets and seeks
preservation of the status of the partnership pending arbitral
proceedings. Whether such reliefs can be granted is a separate
question. However, for the purpose of examining territorial
jurisdiction, these pleadings constitute relevant facts which cannot
be brushed aside as insignificant.
59. The respondents are justified in contending that the Court
cannot ignore the nature of the dispute. The allegations regarding
retirement, reconstitution of the partnership, settlement of
accounts and continuance of partnership rights form an part of the
controversy. These aspects have bearing upon the determination of
jurisdiction and cannot be excluded merely because the petitioner
has also sought protection of immovable properties situated within
Mumbai.
60. Thus, the authorities relied upon by both sides do not lay
down conflicting principles. They hold that territorial jurisdiction
depends upon identification of the dispute, the material facts
24
carbpl13434-2026-J.doc
constituting the cause of action and the statutory scheme. The
application of these principles to disputes arising out of
partnership rights and partnership property requires separate
examination, particularly in light of the law declared in Addanki
Narayanappa , Firm Ashok Traders and Ratan Lalchandani . Those
decisions shall therefore be considered while examining the nature
of the dispute and its effect upon the territorial jurisdiction.
61. Having considered the principles governing territorial
jurisdiction, it now becomes necessary to examine the nature of
the present dispute. The respondents have contended that the
controversy relates to dissolution of partnership, retirement of a
partner and settlement of accounts. According to them, such
disputes cannot be treated as disputes relating to immovable
property merely because the assets of the partnership include
immovable properties situated at Mumbai. The petitioner submits
that, protection of partnership assets situated in Mumbai and
prevention of dispossession from those properties constitute an
essential part of the dispute.
62. The legal position relating to the nature of partnership
property stands covered by the decision of the Supreme Court in
Addanki Narayanappa. After examining the provisions of the
Partnership Act, particularly Sections 14, 15, 29, 32, 37, and 48,
the Supreme Court in para 4 held:
“Whatever may be the character of the property which is
brought in by the partners when the partnership is formed or
which may be acquired in the course of the business of the
partnership, it becomes the property of the firm and what a25
carbpl13434-2026-J.docpartner is entitled to is his share of profits… and upon
dissolution of the partnership to a share in the money
representing the value of the property.”
63. The Court further observed:
“During the subsistence of the partnership, however, no
partner can deal with any portion of the property as his own.
Nor can he assign his interest in a specific item of the
partnership property to anyone.”
64. These observations make it clear that though the partnership
assets may consist of immovable property, no partner possesses
right over any asset belonging to the firm. His right during the
continuance of the partnership is of participation in the business
and receipt of his share in the profits. Upon retirement or
dissolution, his entitlement is to receive the value of his share after
settlement of accounts in accordance with Section 48 of the
Partnership Act.
65. Relying upon the aforesaid principles, the respondents
submitted that the present dispute cannot be held as a dispute
concerning immovable property. According to them, since the
petitioner has issued a notice seeking dissolution of the
partnership, the dispute concerns settlement of partnership rights
and accounts. Prima facie, there is force in this submission. The
notice invoking arbitration seeks dissolution of the partnership and
settlement of the rights. However, that does not conclude the
matter. The Court cannot ignore the actual reliefs sought in the
present petition. The petitioner has not approached this Court
seeking declaration of title to the flats situated at Mumbai. Neither
has the petitioner sought partition nor any decree for possession of
26
carbpl13434-2026-J.doc
immovable property. The reliefs claimed are to restrain prosecution
of eviction proceedings, preserve the partnership assets and
maintain the existing state of affairs till the arbitral disputes are
adjudicated.
66. In this context, the decision of the Supreme Court in Firm
Ashok Traders, assumes significance. The Supreme Court held that
proceedings under Section 9 are not suits. The Court in para 13
observed:
“The relief sought for in an application under Section 9 of
the A&C Act is neither in a suit nor a right arising from a
contract. The right arising from the partnership deed or
conferred by the Partnership Act is being enforced in the
Arbitral Tribunal; the court under Section 9 is only
formulating interim measures so as to protect the right under
adjudication before the Arbitral Tribunal from being
frustrated.”
67. The Supreme Court further held that the jurisdiction under
Section 9 is available to a party to an arbitration agreement and is
intended for protection of rights pending arbitral adjudication.
68. Thus, while the respondents are correct in submitting that
the disputes relating to retirement, dissolution, and accounts will
fall for adjudication before the Arbitral Tribunal, the present
proceedings have a limited object. The Court is concerned with
preservation of the subject matter of arbitration and with ensuring
that the arbitral proceedings are not rendered meaningless.
69. The respondents have argued that the registered office of the
partnership and the books of account are situated at Delhi. In
support of this submission, reliance has been placed upon the Privy
27
carbpl13434-2026-J.doc
Council decision in Luckmee Chund, wherein it was observed that
in disputes relating to partnership accounts, the central place of
business where the books are maintained furnishes the place
where the cause of action arises. Reliance has been placed upon
the decision of the Madhya Pradesh High Court in Ratan
Lalchandani. In that case, the Court held that where the dispute
concerned rendition of accounts, the place where the registered
office of the dissolved firm was situated and where the books of
account were maintained constituted an integral part of the cause
of action. The Court further held that Section 16 of the Code of
Civil Procedure would not apply because the dispute was not one
seeking determination of rights in immovable property.
70. In my prima facie opinion, the principles laid down in Ratan
Lalchandani support the respondents to the extent that disputes
concerning dissolution and rendition of accounts have close
connection with the place where the accounts are maintained.
However, the factual situation before this Court is not identical.
The petitioner has not merely sought rendition of accounts. The
petitioner has also sought immediate protection against eviction
proceedings instituted before the Small Causes Court at Mumbai
and restraint against dealing with partnership assets situated
within the territorial jurisdiction of this Court. Equally, the
respondents cannot ignore that three eviction suits have been
instituted before the Small Causes Court at Mumbai in relation to
the premises forming part of the partnership assets. Whether those
proceedings are maintainable, whether one partner can maintain
such proceedings against another partner and whether such
28
carbpl13434-2026-J.doc
proceedings are barred by the arbitration agreement are issues
which need not be decided at this stage. However, the pendency of
those proceedings constitutes a material fact giving rise to the
prayer for interim protection.
71. The petitioner has submitted that unless interim protection is
granted, he may be dispossessed from the premises before the
arbitral tribunal has an opportunity to examine the validity of his
alleged retirement. If such dispossession were to take place and if
the petitioner succeeds before the Arbitral Tribunal, restoration of
the earlier position may become difficult. These allegations,
whether proved or not, cannot be ignored while considering
territorial jurisdiction under Section 9. The submission of the
respondents that the registered office of the partnership is situated
at Delhi and that the books of account are maintained there is also
a relevant connecting factor. These facts have bearing upon
disputes concerning dissolution, accounts, and settlement of
partnership rights. Therefore, they cannot be brushed aside merely
because the petitioner has relied upon the existence of partnership
properties at Mumbai.
72. The correct position appears to be that the dispute has more
than one angle. Certain aspects relating to maintenance of
accounts and administration of the partnership are connected with
Delhi. Equally, the reliefs sought in the present petition arise out of
eviction proceedings instituted at Mumbai and concern
preservation of assets situated within Mumbai.
29
carbpl13434-2026-J.doc
73. In such circumstances, the question is whether the facts
pleaded by the petitioner constitute a substantial part of the cause
of action so as to confer jurisdiction upon this Court. As noticed
earlier, Engineering Projects, Rattan Singh Associates and Patel
Roadways hold that the Court must identify the material facts
constituting the foundation of the relief claimed. The Court is not
expected to ignore those facts merely because other facts have also
arisen elsewhere. Prima facie, the reliefs claimed under Section 9
have nexus with the apprehension of dispossession from premises
situated within Mumbai, the prosecution of eviction proceedings
before the Small Causes Court at Mumbai and preservation of the
assets located within this jurisdiction. They constitute foundation
for invoking the jurisdiction under Section 9.
74. The respondents have relied upon BBR (India) (P) Ltd., to
contend that once the seat of arbitration is identified, the Courts
exercising supervisory jurisdiction over the seat can entertain
proceedings under the Arbitration and Conciliation Act. As already
observed, the Partnership Deed in the present case does not
designate the juridical seat of arbitration. The determination of
seat remains one of the disputed questions. Therefore, at this
prima facie stage, the Court cannot proceed upon the assumption
that Delhi alone constitutes the seat of arbitration.
75. On an overall consideration of the pleadings, the statutory
provisions and the authorities cited by both sides, I am prima facie
satisfied that the petitioner has shown existence of material facts
constituting a substantial part of the cause of action within the
territorial jurisdiction of this Court. The reliefs claimed under
30
carbpl13434-2026-J.doc
Section 9 have direct connection with proceedings pending before
Courts in Mumbai and with properties situated within Mumbai.
The existence of other factors at Delhi may become relevant while
deciding the substantive arbitral disputes. However, they do not, at
this stage, exclude the jurisdiction of this Court.
76. The preliminary objection regarding territorial jurisdiction
can not be accepted at this stage. The same is kept open to be
urged before the Arbitral Tribunal or at any other appropriate
stage. For the purpose of deciding the present application under
Section 9, I am satisfied that this Court possesses the territorial
jurisdiction to examine the petition on merits. The contentions
regarding the petitioner’s retirement, validity of the reconstituted
partnership and the entitlement to interim protection shall be
examined separately.
77. It now becomes necessary to examine whether the petitioner
has shown existence of a prima facie right which deserves interim
protection. The foundation of the petitioner’s case is that he
continues to be a partner of respondent No.1 firm under the
Reconstituted Partnership Deed dated 16 April 2014 holding 5%
share therein. According to him, the respondents have falsely
projected that he has retired from the partnership. The petitioner
has relied upon the Partnership Deed, Form V and other
documents to show his continuance as partner. The respondents
dispute the same and contend that the petitioner is no longer a
partner. Thus, the first issue which arise is whether there is any
prima facie material showing lawful retirement of the petitioner
from the partnership.
31
carbpl13434-2026-J.doc
78. Respondent No.2 has not produced before this Court any
undisputed Retirement Deed executed by the petitioner. It is not
shown that there is any document bearing signature of the
petitioner by which he agreed to retire from the partnership. The
respondents have relied upon documents including the alleged
Affidavit and Indemnity Bond. The petitioner alleges that they are
fabricated. Whether those allegations are proved is a matter for
evidence and cannot be finally examined in the present
proceedings. Still the absence of a document recording retirement
cannot be ignored.
79. The petitioner has submitted that assuming there was any
retirement, no consideration was paid to him towards his 5%
share. No accounts were settled. No balance sheet was prepared.
No valuation of the partnership assets was undertaken. No
distribution of assets or liabilities has been made. These
submissions have bearing because retirement from partnership
results in settlement of the partner’s rights. The respondents have
disputed these allegations, but no material showing such
settlement has been pointed out.
80. The respondents argued that these questions pertain to
merits and are required to be examined by the Arbitral Tribunal.
There cannot be any disagreement with this submission. However,
where the respondents rely upon the alleged retirement as
foundation for filing eviction proceedings and reconstituting the
partnership, this Court cannot ignore whether there exists some
prima facie material supporting such retirement. At least at this
stage, such examination becomes necessary for deciding whether
32
carbpl13434-2026-J.doc
interim protection should continue.
81. The legal character of partnership property has already been
settled by the Supreme Court in Addanki Narayanappa. The
Supreme Court in para 4 observed:
“Whatever may be the character of the property which is
brought in by the partners when the partnership is formed or
which may be acquired in the course of the business of the
partnership, it becomes the property of the firm.”
82. The Court further held:
“During the subsistence of the partnership, however, no
partner can deal with any portion of the property as his
own.”
83. These observations show that partnership assets remain
assets of the firm and not of any individual partner.
84. The Supreme Court has observed that what a partner is
entitled to receive is not any immovable property but his share in
the value of the assets after settlement of accounts. Therefore, the
dispute regarding retirement cannot be decided merely by
examining possession of one or more properties. It requires
examination of the entire relationship and settlement of accounts.
These are matters which fall within the jurisdiction of the Arbitral
Tribunal.
85. Learned Senior Advocate for the respondents has rightly
relied upon the aforesaid judgment to contend that the petitioner
cannot claim exclusive ownership over any flat belonging to the
partnership. Prima facie, I find substance in this submission. The
petitioner has pleaded that the properties belong to the
33
carbpl13434-2026-J.doc
partnership firm. Therefore, his claim is not based upon exclusive
ownership but upon his continuing status as partner and
consequential right to participate in the partnership till his rights
are determined. The respondents submitted that since the
petitioner has issued notice seeking dissolution of the partnership,
he cannot claim rights flowing from continuance of the
partnership. Prima facie, this submission requires consideration.
However, issuance of notice for dissolution does not establish that
dissolution has taken effect or that the petitioner’s rights stood
extinguished. Until the consequences flowing from such notice are
adjudicated, the relationship between the parties continues to
remain disputed. Therefore, the notice of dissolution cannot
conclude the controversy at this stage.
86. Another submission advanced by the petitioner is regarding
breach of duties by respondent No.2. It is alleged that respondent
No.2, while exercising control over the management and records
of the partnership, has prepared documents showing retirement of
the petitioner without his consent and has inducted respondent
Nos.3 to 5 as partners. According to the petitioner, these acts
amount to breach of trust reposed in respondent No.2.
87. Under the law of partnership, every partner occupies a
position of confidence towards the other partners. The affairs of
the partnership are required to be conducted with good faith.
Where one partner controls the accounts and records of the firm, a
duty arises to act fairly while dealing with the rights of the
remaining partners. If allegations of fabrication of partnership
records are established, such conduct may have legal
34
carbpl13434-2026-J.doc
consequences. Whether those allegations are correct is a matter of
evidence. Nevertheless, they cannot be brushed aside at this stage.
88. The petitioner has challenged the Affidavit dated 18
February 2025, the Indemnity Bond of the same date and Form
dated 25 March 2025. It is his case that these documents were
created only to give legitimacy to an alleged retirement which
never occurred. The respondents dispute these allegations. Since
authenticity of these documents is directly in issue, this Court
cannot, at the stage of Section 9, record any conclusive finding
regarding their genuineness. Such disputed questions require
appreciation of evidence before the competent forum. However,
one circumstance assumes significance. The petitioner has asserted
that even his name has not been correctly reflected in the statutory
documents relied upon by the respondents. If found correct, such
circumstance may have evidentiary value while appreciating the
genuineness of those documents. Equally, if the respondents
explain the discrepancy, the petitioner’s contention may fail.
Therefore, at this stage, no final inference either way can be
drawn.
89. The respondents submitted that disputes regarding
retirement, dissolution, and accounts are arbitrable disputes and
the Court exercising jurisdiction under Section 9 should avoid
expressing any opinion on the merits. This submission deserves
acceptance. The Supreme Court in Firm Ashok Traders, has held
that the Court exercising jurisdiction under Section 9 does not
adjudicate the substantive rights of the parties. It merely grants
interim measures so that the rights which are to be determined by
35
carbpl13434-2026-J.doc
the Arbitral Tribunal are not made ineffective. Therefore, while
considering the existence of a prima facie case, this Court is
required to see whether the petitioner has produced material
showing that the dispute raised by him is bona fide and requires
preservation of the existing position till adjudication by the
Arbitral Tribunal.
90. Prima facie, the Partnership Deed dated 16 April 2014, the
statutory filings relied upon by the petitioner, the dispute
regarding settlement of accounts, the allegations concerning
fabrication of documents and the institution of subsequent
proceedings founded upon the alleged retirement together create
substantial questions requiring examination in arbitration. These
questions cannot be rejected as frivolous at this stage.
91. Thus, I am of the prima facie view that the petitioner has
succeeded in showing that serious disputes exist regarding his
alleged retirement, his status as partner and the validity of the
reconstitution of respondent No.1 firm. These disputes arise out of
the Partnership Deed and fall within the scope of the arbitration
agreement.
92. The next question is whether the petitioner has made out a
case for grant of interim protection under Section 9 of the
Arbitration and Conciliation Act. The petitioner has prayed that
respondent Nos.1 to 5 should be restrained from prosecuting the
eviction suits pending before the Small Causes Court and further
prayed that this Court should stay the said proceedings and
restrain the Small Causes Court from passing any interim or final
36
carbpl13434-2026-J.doc
order adverse to the petitioner till completion of the arbitral
proceedings.
93. In my prima facie opinion, such relief cannot be granted. The
eviction suits are pending before a Court of competent jurisdiction.
Merely because disputes between the parties are covered by an
arbitration agreement, this Court while exercising powers under
Section 9 of the Arbitration and Conciliation Act cannot injunct
another competent court from proceeding with matters pending
before it.
94. The Arbitration and Conciliation Act provides interim
measures for protection of the subject-matter of arbitration. It does
not confer supervisory or appellate jurisdiction upon this Court
over proceedings pending before another competent judicial
forum. Granting an injunction against continuation of judicial
proceedings before another Court or restraining that Court from
passing orders would amount to interfering with the exercise of
jurisdiction vested in that Court. Such relief is outside the scope of
jurisdiction under Section 9 of the Arbitration and Conciliation
Act.
95. The petitioner has submitted that the eviction suits are
founded upon the respondents’ assertion that he has retired from
the partnership and that such assertion is fraudulent and forms the
subject matter of arbitration. That circumstance does not authorise
this Court to stay pending judicial proceedings. The validity of the
respondents’ case in those suits and all objections available to the
petitioner can be raised before the Court where those proceedings
37
carbpl13434-2026-J.doc
are pending. Learned counsel for the petitioner has argued that
continuation of the eviction suits may frustrate the arbitration
proceedings. I am unable to accept this submission. The possibility
that findings recorded in one proceeding may have bearing on
another cannot justify an injunction against judicial proceedings
pending before a competent Court. The legal remedies available
before the Small Causes Court, as well as remedies available
against any order passed therein, continue to remain open in
accordance with law.
96. The further prayer seeking restraint against the Small Causes
Court from passing any interim or final order adverse to the
petitioner is even in nature. Such a direction cannot be issued in
proceedings under Section 9. Every Court constituted under law
must be permitted to exercise its jurisdiction independently. This
Court cannot direct another judicial forum not to proceed with
matters instituted before it or prohibit it from passing orders which
it is empowered to pass. It is also relevant that the question
whether the petitioner has retired from the partnership, whether
the Affidavit and Indemnity Bond dated 18 February 2025 are
genuine, and what consequences flow from the Partnership Deed
are all matters which may arise before different forums. The
pendency of arbitration does not render the eviction proceedings
non-maintainable. Those questions can be urged before the
concerned Court, and that Court shall decide them on their own
merits. Therefore, although this Court has found that the disputes
regarding the petitioner’s alleged retirement and his partnership
rights require adjudication in arbitration, it does not follow that
38
carbpl13434-2026-J.doc
respondent Nos.1 to 5 can be restrained from prosecuting the
pending eviction suits or that the Small Causes Court can be
prohibited from exercising jurisdiction vested in it. Consequently,
prayer clauses (a) and (a-1) do not deserve to be granted and are
accordingly rejected.
97. The petitioner has contended that one partner cannot treat
another partner as a stranger and seek his eviction from premises
belonging to the partnership by creating documents showing
retirement. Whether this submission is correct is a matter which
shall be examined by the Arbitral Tribunal and by the competent
Court. However, the issue cannot be said to be free from doubt. It
raises substantial questions requiring adjudication after parties
lead evidence.
98. The Supreme Court in Firm Ashok Traders, explained the
scope of Section 9. The Court held that proceedings under Section
9 are not intended to determine substantive rights. The Court
grants interim measures so that the rights which are under
adjudication before the Arbitral Tribunal are not frustrated. The
Supreme Court in para 13 observed:
“The court under Section 9 is only formulating interim
measures so as to protect the right under adjudication before
the Arbitral Tribunal from being frustrated.”
99. This principle has direct application to the present case.
100. Another aspect cannot be ignored. The petitioner has
invoked arbitration by issuing notice under Section 21 of the
Arbitration and Conciliation Act. Thus, the present petition is not
39
carbpl13434-2026-J.doc
one where the applicant has approached the Court without
showing any intention to commence arbitral proceedings. The
statutory requirement noticed by the Supreme Court in Firm Ashok
Traders and Sundaram Finance Ltd. v. NEPC India Ltd. , (1999) 2
SCC 479, that there must be a manifest intention to commence
arbitration, appears prima facie to be satisfied.
101. The respondents argued that grant of injunction would
amount to staying proceedings pending before another competent
Court. According to them, such relief should not be granted. This
submission deserves careful consideration. Undoubtedly,
proceedings before another Court cannot lightly be interdicted. At
the same time, where the institution of those proceedings forms
part of the alleged breach of the arbitration agreement and where
continuation of those proceedings may affect the subject matter of
arbitration, the Court exercising powers under Section 9 cannot
decline to examine whether interim protection is necessary.
102. The petitioner has submitted that if possession of the
partnership premises is disturbed before the arbitral disputes are
decided, restoration of the earlier position may become difficult
even if the petitioner succeeds. The respondents, on the other
hand, submit that monetary compensation would adequately
protect the petitioner. At this stage, I am unable to agree with the
respondents. The dispute is not confined to monetary claims. It
concerns the petitioner’s status as a partner, his participation in the
affairs of the partnership and his claim regarding preservation of
assets.
40
carbpl13434-2026-J.doc
103. The respondents submitted that the petitioner has delayed
approaching this Court. Prima facie, I do not find this submission
sufficient to deny interim relief. The petitioner has explained that
he came to know about the alleged documents subsequently and
thereafter invoked arbitration and approached this Court. Whether
there is any delay defeating the petitioner’s claim is a matter which
may be examined during final adjudication. At present, I do not
find such delay to be of such magnitude as would disentitle the
petitioner from seeking interim protection.
104. Balance of convenience also requires consideration. If
interim protection is refused and the petitioner is successful before
the Arbitral Tribunal, the consequences flowing from dispossession
and further changes in the constitution of the partnership may
become difficult to reverse. On the other hand, if limited interim
protection is granted and the respondents succeed, the
respondents would be at liberty to enforce their rights in
accordance with law after conclusion of the arbitral proceedings.
Therefore, at this stage, greater prejudice appears likely to be
caused by refusal of interim protection.
105. The petitioner has prayed for restraint against alienation or
creation of third party rights in the partnership assets. The
respondents opposed this relief by submitting that the partnership
business cannot be paralysed. Prima facie, there is substance in the
concern expressed by the respondents. Any interim order should
not interfere with the ordinary business activities of the
partnership. However, preservation of the existing assets forming
the subject matter of the dispute is also important. The interim
41
carbpl13434-2026-J.doc
protection has to be moulded in a manner which protects the
subject matter of arbitration without preventing business activities.
106. The petitioner has further prayed for production of the
disputed Affidavit and Indemnity Bond and for restraining
respondent No.6 from acting upon those documents. Since
authenticity of those documents is questioned, preservation of the
original records may become necessary for adjudication before the
Arbitral Tribunal.
107. On an overall assessment of the pleadings, the documents
placed on record, the rival submissions and the legal principles
discussed hereinabove, I am prima facie satisfied that the
petitioner has established the existence of serious disputes
requiring adjudication by the Arbitral Tribunal. The petitioner has
also shown that refusal of interim protection at this stage may
prejudice the arbitral proceedings. The balance of convenience
presently leans in favour of preserving the existing position until
the rights of the parties are determined through arbitration.
108. In view of the foregoing discussion and for the reasons
recorded hereinabove, the following order is passed:
(i) The Arbitration Petition is partly allowed;
(ii) Pending the commencement and final disposal of the
arbitral proceedings, respondent Nos.1 to 5, either by
themselves or through their partners, servants, agents or any
person claiming through or under them, are restrained from
creating any third party rights, title or interest, or from
selling, transferring, alienating, encumbering, or otherwise42
carbpl13434-2026-J.docdealing with the following partnership assets;
(a) Flat No. A-502 at Krishna Regency, Datta Mandir Road,
Vakola, Santacruz (East), Mumbai;
(b) Flat No. A-104 together with three stilt car parking
spaces at Krishna Regency, Datta Mandir Road, Vakola,
Santacruz (East), Mumbai;
(c) Flat No. C-42 at Park Avenue, R.T.O. Lane, Andheri
(West), Mumbai;
(iii) Respondent No.6 shall preserve and shall not destroy,
alter, replace or part with possession of the original Affidavit
dated 18 February 2025, the original Indemnity Bond dated
18 February 2025 and all original records relating to the
change in constitution of respondent No.1 firm based upon
the said documents. Respondent No.6 shall produce the said
original documents before the Arbitral Tribunal or before this
Court, if so directed;
(iv) Respondent Nos.1 to 5 shall maintain complete
accounts of the business of respondent No.1 firm in the
ordinary course and shall preserve all books of account,
statutory records and financial documents until further
orders of the Arbitral Tribunal;
(v) The respondents shall not induct any further partner in
respondent No.1 firm or effect any further change in the
constitution of the partnership on the basis of the petitioner’s
alleged retirement, without prior leave of the Arbitral
43
carbpl13434-2026-J.doc
Tribunal;
(vi) The observations made in this judgment are only prima
facie in nature and are confined to the adjudication of the
present petition under Section 9 of the Arbitration and
Conciliation Act, 1996. The Arbitral Tribunal shall decide all
issues on their own merits without being influenced by any
observation contained in this order;
(vii) The petitioner shall take effective steps for constitution
of the Arbitral Tribunal within a period of four weeks from
today, if not already constituted;
(viii) In the event the petitioner fails to take effective steps
for commencement of the arbitral proceedings within the
aforesaid period, it shall be open to the respondents to apply
for modification, variation, or vacation of the interim
protection granted by this order;
(ix) The Arbitration Petition is accordingly disposed of in
the above terms.
(x) There shall be no order as to costs.
(AMIT BORKAR, J.)
44
