Bombay High Court

MR. PADAMSHI KALYANJI GAJRAversusM/S SAINATH ROYAL KHARBAV DEVELOPERS LLP

Decided: 18 September 2026
Disposal: Allowed

Holding

The Court held that the arbitration clause is valid and enforceable, and appointed a sole arbitrator to adjudicate the dispute.

Summary

The petition arose from a dispute among partners of a Limited Liability Partnership (LLP) governed by an LLP agreement dated 20‑02‑2014 that contained an arbitration clause (clause 24). The petitioner invoked the clause by sending a notice on 29‑04‑2026, seeking arbitration, while the respondents contested the validity of the clause and alleged fraudulent conduct by the petitioner, including an FIR (Crime No. 507 of 2025). The High Court examined whether a valid arbitration agreement existed and whether the clause could be invoked despite the allegations. Finding that the arbitration clause was duly incorporated and satisfied the conditions of the Arbitration and Conciliation Act, 1996, the Court appointed Mr. Drupad Patil as the sole arbitrator and set procedural directions. The petition was thereafter disposed of, with costs to be borne equally by the parties.

Issues considered

Whether the arbitration clause in the LLP agreement constitutes a valid and enforceable arbitration agreement under the Arbitration and Conciliation Act, 1996.
Whether the petitioner is entitled to invoke the arbitration clause despite the respondents' allegations of fraud and the pending FIR.
Whether a sole arbitrator may be appointed in lieu of the three‑member tribunal contemplated by the agreement.

Legislation cited

Arbitration and Conciliation Act, 1996 — s. 11(8), 12(1)

Subjects

Arbitration
Arbitration clause
Limited Liability Partnership
Arbitration agreement
Sole arbitrator
Arbitration and Conciliation Act 1996
Partnership dispute

Judgment

913-arp-135-26.doc

Urmila Ingale

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
URMILA
Digitally signed
by URMILA
PRAMOD
CIVIL APPELLATE JURISDICTION
PRAMOD INGALE
Date:
INGALE 2026.09.22
14:08:15 +0530

ARBITRATION PETITION NO. 135 OF 2026

Mr. Padamshi Kalyanji Gajra .. Petitioner
Versus
M/s. Sainath Royal Kharbav Developers LLP
and ors. .. Respondents

....................
 Mr. Rishi Soni i/b Ms.Meena R. Sharma, for Petitioner.
 Mr. Vignesh Ashokan i/b Mr.Abhijeet Kandarkar, for
Respondents No. 1, 2 and 3.
 Mr. V.R. Kasle, for Respondent No.5.

...................

CORAM : S.M.MODAK, J.

DATE : SEPTEMBER 18, 2026
P.C.:

1. Heard learned counsel for the Petitioner and learned

counsel for the Respondent No.5. Respondents No.2 & 3 have

filed reply. It is on page no. 135. Their arguing counsel is not

available, therefore, adjournment is sought. However,

considering the reply, I do not think that adjournment is justified.

Respondent No.4 is served by way of a private service. Affidavit

of service is filed.

2. The Petitioner and Respondents No. 2 to 5 are the

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913-arp-135-26.doc

partners of Respondent No.1. There is arbitration clause no. 24

in the Limited Liability Partnership Agreement dated

20/02/2014. Clause 24 reads thus:

“24. DISPUTE RESOLUTION
All disputes, differences, claims and questions whatsoever, which
shall arise either during the continuance of the limited liability
partnership or thereafter between the Partners or their
representatives or between the Partner or Partners and the legal
representative(s) of the other Partners touching these Presents, shall
be referred to the arbitration of an Arbitral Tribunal consisting of
three arbitrators of which the two Designated Partners shall appoint
1 (one) arbitrator each, and the two arbitrators so appointed shall
appoint the third arbitrator. Such arbitration shall be carried out in
accordance with and subject to the provisions of the Arbitration and
Conciliation Act, 1996 or any statutory modification or re-enactment
thereof for the time being in force and the decision of the
Arbitrator's shall be final and binding upon all parties. It is clarified
that only the two Designated Partners shall have the right to appoint
the 2(two) Arbitrators. Such arbitration shall be held in Mumbai.”

3. As the dispute has arisen, the Petitioner has invoked this

arbitration clause and sent a notice dated 29/04/2026 which is at

page no. 113. There is reply given by the Respondent No.2 dated

29/05/2026 which is at page no. 124. Clause 13 of the said

reply reads thus :

“13. My Clients further state that your client cannot be permitted
to abuse arbitration proceedings for purposes of legitimizing
fabricated and disputed unilateral accounting claims. Mere
existence of arbitration clause does not validate false claims, nor
can arbitration clause be used as shield against consequences of
fraudulent and criminal conduct independently committed by a
partner.”

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4. Even in the reply filed by the Respondents No. 2 and 3,

they have made certain allegations against the Petitioner about

the sale of land without consent and with ulterior motive. There

is also FIR registered at Bhiwandi Police Station bearing Crime

No. 507 of 2025. The issue involved in the arbitration Petition is

whether there exist arbitration agreement and whether

arbitration clause is invoked or not. The Petitioner has satisfied

both the conditions, about alleged misconduct of the Petitioner

cannot be looked into in this Petition. The above

correspondence by Respondents No.2 & 3 do suggest about their

stand about existence of arbitration clause. Even Respondent

No.5 is consenting for appointment of an arbitrator. An oral

submission is made in respect of three arbitrators. Let only one

arbitrator be appointed so that the time and expenses can be

saved. Even the Petitioner has suggested one arbitrator.

5. It is submitted that already a dispute involving some of

the parties to this Petition is referred to learned Advocate

Mr.Drupad Patil by way of arbitration. Therefore, he be

appointed as an Arbitrator. There is consent for his appointment.

In view of that, the following order is passed.

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913-arp-135-26.doc

ORDER

(I) Mr.Drupad Patil, learned Advocate of this Court is hereby

appointed as the Sole Arbitrator to adjudicate upon the disputes

and differences between the parties arising out and in connection

with the matter referred above.

Office address :- 1813, True Value Securities, Crescent Chambers,
Tamarind Lane, Fort, Mumbai- 400 001.
Email id:- [email protected]
Contact No. :- 9766464655

(II) The place of arbitration shall be at Mumbai, Maharashtra.

(III) A copy of this order will be communicated to the learned

Sole Arbitrator by the Advocates for the Petitioner within a

period of one week from the date of upload of this order. The

Petitioner shall provide the contact and communication

particulars of the parties to the Arbitral Tribunal along with copy

of this order.

(IV) The Learned Sole Arbitrator is requested to forward the

statutory Statement of Disclosure under Section 11(8) read with

Section 12(1) of the Arbitration and Conciliation Act, 1996 to the

parties within a period of two weeks from receipt of copy of this

order.

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913-arp-135-26.doc

(V) The parties shall appear before the Learned Sole Arbitrator

on such date and at such place as indicated, to obtain appropriate

directions with regard to conduct of the arbitration including

fixing a schedule for pleadings. examination of witnesses, if any,

schedule of hearings etc. At such meeting, the parties shall

provide a valid and functional email address along with mobile

and landline numbers of the respective Advocates of the parties

to the Arbitral Tribunal. Communications to such email addresses

shall constitute valid service of correspondence in connection

with the arbitration.

(VI) All arbitral costs and fees of the Arbitral Tribunal shall be

borne by the parties equally as per the Schedule.

6. The Arbitration Petition is disposed of.

[ S.M.MODAK, J. ]

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