RAJU MANSINGH RATHODversusGOPAL TRILOKCHAND AGARWAL AND ANOTHER

2026:BHC-AUG:41236


                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      BENCH AT AURANGABAD


                            924 ARBITRATION APPLICATION NO. 13 OF 2026


                                       RAJU MANSINGH RATHOD
                                                VERSUS
                           GOPAL TRILOKCHAND AGARWAL AND ANOTHER
                                                    ...
            Mr. M.S. Deshmukh, Advocate h/f Mr. A.B. Deshmukh, Advocate for applicant
                Mr. Sanjay Jain, Advocate a/w Mr. Sairam Subramanian, Ms. Saloni Shah,
                Ms. Ruchika Prabhu, Advocates h/f Mr. A.M. Cyril, Advocate for respondent
                                                  No.1
                           Mr. Uddhav Momale, Advocate for respondent No.2
                                                    ...

                                                   CORAM :      ROHIT W. JOSHI, J.
                                                   DATE :       01st SEPTEMBER, 2026


            ORDER :


            .             Present application is filed under Section 11(6) of the Arbitration

            and Conciliation Act, 1996 invoking arbitration clause incorporated in clause

            20 in the Partnership Deed dated 05.12.2020 pertaining to a Partnership Firm

            viz. M/s. Ramanuj Ventures, of which the applicant and non applicants are

            partners.     There is no dispute between the parties with respect to the

            Partnership Deed and the arbitration clause contained therein.


            2             Respondent No.1 has opposed the application predominantly on

            the ground that right to invoke arbitration as per clause 20 of the Partnership
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Deed is waived by the applicant by filing a suit, being Commercial Suit

No.4/2025 before the learned District Judge (Commercial Court) at

Aurangabad. Learned Advocate contends that perusal of the notice invoking

arbitration will demonstrate that the claim made in the civil suit is also

referred in the said notice and, therefore, filing of the earlier civil suit with

respect to one of the claims will amount to waiver of right to invoke the

arbitration clause in the Partnership Deed.      Learned Advocate has placed

reliance on Judgment of the Delhi High Court in the matters of Bharti

Televentures Ltd. vs. DSS Enterprises Private Limited and others [2005 SCC

OnLine Delhi 862], Raj and Associates vs. Videsh Sanchar Nigam Limited and

others [2004 (76) DRJ 60] and Booz Allen and Hamilton Inc. vs. SBI Home

Finance Limited and others [(2011) 5 SCC 532].           In the case of Bharti

Televentures Ltd. (supra) despite the arbitration agreement between the

parties, the plaintiff had instituted a civil suit which was not objected by the

defendant by filing an application under Section 8 of the Arbitration and

Conciliation Act, 1996. Rather the defendant also filed a counter claim in the

civil suit. In such circumstances, the Court has held that where a party itself

chooses to file a civil suit, it cannot then alter its stand to invoke the

arbitration clause for adjudication. The Judgment in the case of Raj and

Associates (supra) follows the same principle and lays down that having

instituted a civil suit with respect to a claim which could be subjected to
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arbitration, it is not open for the party filing the civil suit to invoke the

arbitration clause. In the case of Booz Allen and Hamilton INC (supra) the

Hon’ble Supreme Court has held that in case a civil suit is instituted with

respect to a matter which could be adjudicated in an arbitration, the

defendant must raise an objection to the civil suit by filing an application

under Section 8 of the Arbitration and Conciliation Act before submitting first

statement on the substance of the dispute.


3           Whereas there cannot be any quarrel, with the legal propositions

to which attention is drawn by the learned Advocate for respondent No.1, in

the facts of the present case it is found that the prayer in the commercial suit

instituted by the applicant is for declaration that a Memorandum of

Understanding dated 21.03.2022 executed in between defendant Nos.2 and 3

in the said suit viz. M/s. Siddhi Fibers, a partnership in which the non

applicant No.1 is one of the partners and another company named M/s.

Wockhardt Ltd. is null and void and not binding on the plaintiff in the said

suit. Similarly, declaration is sought that leasehold rights with respect to the

suit property vest with the plaintiff.       The said claim is made against

defendant Nos.2 and 3 in the said suit also. It is obvious that prayers sought

in the civil suit cannot be claimed in the arbitration proceeding since

defendant Nos.2 and 3 are not parties to the arbitration agreement /
                                        4                             924_ARB_13_2026



partnership deed. Institution of the suit, having regard to the prayers made

in the suit, as also the parties to the suit, therefore will not be a bar to invoke

arbitration clause in the partnership deed for resolution of disputes interse

between partners. Although it is stated that the arbitration notice refers to

claim in the civil suit as one of the claims in arbitration proceedings to be

initiated, it is not in dispute that there are several other claims which are not

subject matter of the civil suit.    In the event any claim is raised by the

applicant which is not arbitrable or is otherwise not maintainable, it will be

open for the non applicant to raise objection in this regard before the Arbitral

Tribunal. In the considered opinion of this Court the prayer for appointment

will have to be allowed. The contention that the arbitration clause ceases to

exist or is rendered inoperative in view of the institution of the civil suit,

cannot be accepted for the reasons aforesaid.


4            Another objection by the learned Advocate for the non applicant

No.1 is that a material fact with respect to institution of the civil suit is

suppressed by the applicant and, therefore, the applicant does not deserve

any relief at the hands of this Court. I am afraid suppression of a fact which

is material in nature only will disentitle from the applicant from seeking relief

of appointment of Arbitrator. The alleged suppression is not a suppression of

material fact since the subject matter of the suit can never be subject-matter
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of arbitration to be initiated in accordance with arbitration clause in

partnership deed for adjudication of disputes interse between the partners of

the firm.


5            For the reasons recorded above, the objections raised by the

applicant are liable to be rejected. Application for appointment of Arbitrator

deserves to be allowed.


6            At the joint request of the parties, Hon’ble Shri. Justice P.V.

Hardas, a Former Judge of this Court is appointed as sole Arbitrator for

adjudication of disputes between the parties arising out of Partnership Deed

dated 05.12.2020.


7            Office is directed to issue a request letter to the learned

Arbitrator seeking consent and statement of disclosure as contemplated

under Section 12 of the Arbitration and Conciliation Act.


8            The appointment shall be subject to receipt of consent letter and

statement of disclosure.


9            All contentions pertaining to maintainability of claim and

arbitrability of dispute are kept open.



                                                 ( ROHIT W. JOSHI, J. )
agd