Bombay High Court

HARISH THAKURDAS RIZWANIversusDHANRAJ NAWALRAI RIZWANI AND OTHERS

Disposal: DISPOSED OFF

Holding

No arbitration agreement existed between the petitioner and respondent no.4; consequently, the trial court’s order referring the dispute to arbitration is set aside.

Summary

The petitioner, a former partner of M/s New Dhanraj Liquors, sued the other partners and the Maharashtra authorities for a perpetual injunction to prevent them from obtaining a liquor licence in the name of a newly formed partnership, M/s D.R. Distributors. The defendant‑4 filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the dispute to arbitration based on an arbitration clause in the 1994 partnership deed of the old firm. The trial court allowed the application and referred the matter to arbitration, a decision challenged by the petitioner on the ground that no arbitration agreement existed between him and defendant‑4. The High Court examined whether the arbitration clause in the earlier deed bound a party who was not a signatory and whether the later deed, which lacked any arbitration provision, created a new agreement. Finding that there was no valid arbitration agreement between the petitioner and defendant‑4, the Court held the trial court’s order untenable and quashed it, allowing the writ petition. The order thus restores the status quo and leaves the civil suit to proceed in the regular court.

Issues considered

Whether an arbitration agreement exists between the petitioner and respondent no.4 under Section 8 of the Arbitration and Conciliation Act, 1996.
Whether an arbitration clause in a partnership deed binds a person who was not a party to that deed.
Whether the subsequent partnership deed, which lacks an arbitration clause, creates a new arbitral agreement.

Legislation cited

Subjects

Arbitration
Partnership deed
Section 8
Arbitral jurisdiction
Licensing
Maharashtra Prohibition Act
Civil injunction

Judgment

2026:BHC-AUG:39639

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
WRIT PETITION NO. 13595 OF 2017

Harish Thakurdas Rizwani
VERSUS
Dhanraj Nawalrai Rizwani And Others
...
Advocate for the Petitioner : Mr. Kasliwal Anil H.
AGP for Respondent/State : Mr. S.G Joshi
Advocate for Respondent Nos.1 to 4 : Mr. V.C. Patil h/f Mr. U.B. Bondar
...
CORAM : ROHIT W. JOSHI, J.
DATED : AUGUST 31, 2026
P.C.:

1. Present petitioner was a partner in partnership firm named

M/s. New Dhanraj Liquors. The said partnership firm was engaged in

wholesale business of sale of country liquor. It has a license for

conducting said business issued in CL-II under the Maharashtra Country

Liquor Rules, 1973. Apart from the petitioner, who is partner no.4 in

the said firm, there were three other partners, who are respondent

nos.1 to 3 in the present petition.

2. On 01.04.2012, another partnership deed came to be

executed by and between respondent nos.1 to 4. The partnership firm

constituted by the said deed of partnership was named M/s. D.R.

Distributors. Respondent nos.1 to 4 are partners in the firm M/s. D.R.

Distributors. The petitioner is not a partner in the firm M/s. D.R.

Distributors. The petitioner instituted a suit being Regular Civil Suit

No.68 of 2017 against respondents nos.1 to 4 and the authorities of
2 2-wp-13595-2017.odt

Government of Maharashtra exercising jurisdiction under the provisions

of Maharashtra Prohibition Act, 1949 interalia seeking a decree for

perpetual injunction restraining respondent nos.1 to 4 (defendant nos.1

to 4 in civil suit) from obtaining license in question in the name of

newly constituted firm M/s. D.R. Distributors. In the said suit,

respondent no.4 moved an application under Section 8 of the

Arbitration and Conciliation Act, 1996 praying that in view of Clause 13

of first partnership deed dated 17.11.1994, the dispute be referred to

arbitration. The said application was opposed by the petitioner on the

ground that respondent no.4 is not a party to the first partnership deed

of M/s. New Dhanraj Liquors, dated 17.11.1994 in which arbitration

clause is incorporated and further subsequent partnership deed dated

01.04.2012 with respect to M/s. D.R. Distributors does not include a

clause for reference of dispute for arbitration and the

petitioner/plaintiff is not even a partner under the subsequent

partnership deed.

3. Learned Trial Court vide impugned order dated 11.08.2017

allowed the application and referred the parties for adjudication of

dispute to arbitration. The said order is subject matter of challenge in

the present petition.

4. Mr. Kasliwal, learned advocate for the petitioner/plaintiff

argues that an Arbitrator gets jurisdiction only from an agreement
3 2-wp-13595-2017.odt

executed between the parties. Learned advocate argues that since the

defendant/respondent no.4 is not a partner in the partnership deed

dated 17.11.1994 (M/s. New Dhanraj Liquors), wherein arbitration

clause is incorporated and subsequent partnership deed dated

01.04.2012 (M/s. D.R. Distributors) does not contain a clause for

arbitration and the petitioner/plaintiff is also not a partner in the

subsequently created firm, the dispute cannot be referred for

arbitration. He argues that learned Trial Court lost sight of this vital

aspect of the matter while allowing the application.

5. Per contra, Mr. Vijay Patil, learned advocate for respondent

nos.1 to 4, original defendant nos.1 to 4 contends that learned Trial

Court has properly considered the controversy and has rightly referred

the parties to arbitration. Learned advocate contends that the present

petitioner/plaintiff had tendered resignation as a partner of the firm

M/s. New Dhanraj Liquors by executing a document dated 20.11.2009

and thereafter, respondent/defendant no.4 was inducted as partner in

the firm.

6. The contention of Mr. Patil is pertaining to merits of the

dispute. The said contention is not relevant for deciding the arbitrality

of the dispute. The parties to civil suit are present petitioner and

respondent nos.1 to 4 and some other authorities. In the first

partnership deed wherein arbitration clause is incorporated, respondent
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no.4 is not a partner. In the subsequent deed, a partnership deed which

does not include a arbitration clause, the petitioner/plaintiff is not a

partner. Even if the second partnership is considered to be continuation

of first partnership, it has to be stated that there is no agreement for

reference of dispute to arbitration at least between petitioner/plaintiff

and respondent/defendant no.4. Since there is no arbitration

agreement between the plaintiff and contesting defendant, the dispute

could not have been referred for arbitration.

7. In that view of the matter, in the considered opinion of this

Court, the impugned order dated 11.08.2017 is unsustainable and

liable to be quashed and set aside. Writ Petition is allowed by quashing

and setting aside order dated 11.08.2017 passed by learned IInd Civil

Judge, Senior Division, Nanded below Exhibit-53 in Regular Civil Suit

No.68 of 2017 by rejecting the said application at Exhibit-53.

8. It must also be stated that it is not the case of respondent

nos.1 to 4 that respondent no.4 is claiming through the petitioner.

[ROHIT W. JOSHI J.]

Mujaheed//

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