'Claim For Interim Injunction Arose After 27 Yrs': Allahabad High Court Denies Appeal U/S 37 Of A&C Act, Cites Inordinate Delay

The Allahabad High Court has recently dismissed an appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 filed by M/s Law Publishers and a partner of the firm against the rejection of the application under Section 9 of the Act by the Commercial Court on grounds that the appellant had approached the Court after 27 years.The bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra held“Once it is not established on record as to what triggered the claim for interim injunction by the appellant in the year 2023 after deep slumber of 27 years since after 1996, though she tried to correlate the same with respondents' intention to transfer the properties, irrespective of merits or demerits of the respective cases of the parties in proceedings for appointment of an Arbitrator under section 11 of the Act, 1996, we are not inclined to grant any relief to the appellant in so far as the proceedings under Section 9 of the Act are concerned and reject her claim for aforesaid reasons in addition to those recorded by the Commercial Court in the order impugned.”'Messers Law Publishers' at Allahabad is a partnership business involved in publishing and sale of law books. It is owned and run by the Sagar family. The first partnership deed is dated 01.04.1976. Thereafter, on 16.04.1996, another partnership deed was executed. Appellant, Smt. Vibha, claimed herself to be a sleeping partner in the firm. She pleaded that when she was informed that other partners were trying to alienate the immovable property, she sent them a notice in 2023. The Publishing House and Smt. Vibha approached the Commercial Court seeking temporary injunction against the defendants prohibiting them from misappropriating the money/assets/securities of the firm and from transferring/alienating/ pledging/selling/creating third party interest therein, supply of partnership deed dated 16.04.1996 to the appellant and to deposit the rent from the immovable property with the Commercial Court. Defendant/ respondents pleaded that the partnership deed shown by the appellant was forged and the shareholding had changed subsequent to the death of other partners. It was also pleaded that she had already transferred her share in favour of another partner and had no right to raise any claim after 27 years (from 1996). The Commercial Court rejected the application on grounds that the reliefs sought were final in nature and could not be granted at an interim stage. Accordingly, appellants approached the High Court. Perusing the documents on record the Court observed that there was no definite way of knowing which partnership deed was valid and which was forged. It observed that the appellant was managing a business of similar nature in Delhi and being members of the same family, it was not possible for her to not know about the running of business at Allahabad. “Under the aforesaid circumstances, as to what prevented the appellant to raise a claim as regards profit-sharing in the partnership business over a period of 27 years after 1996, is not reflected from the record. The appellant, being a business personnel having her business at Delhi, must be filing Income Tax Returns but nothing has been brought on record by her to reflect income/profit/loss arising from the disputed partnership business,” observed the Court. Though the appellant claimed that the last cause of action arose in 2023, the Court held that the appellant had not raised any claims regarding profits of the firm since 1996, when her name was allegedly added in the partnership deed. The Court relied on Dalpat Kumar and another Vs. Prahlad Singh and others where the Supreme Court had held that for interim relief “prima facie case”, “balance of convenience” and “irreparable loss” must be seen. In the present case, the Court held that neither of the conditions were met as there was a 27 year delay in approaching the Court, the appellant had no involvement in the business to tilt the balance of convenience in her favour and there was no irreparable loss as her rights as a partner were not being decided by the Court. Without commenting on the merits of the dispute between the parties, the Court upheld the order of the Commercial Court rejecting the application for interim relief under Section 9 of the Arbitration Act. Case Title: Messrs Law Publishers and another v. Sri Virender Sagar and 3 others [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 302 of 2024]Appearances:. Priyanka Midha,Abhishek Ghosh and Ram Kaushik, counsel for the appellants, Vinod Kumar Singh, Senior Counsel, assisted by Vinay Kumar Mishra and Ankur Azad counsel for respondentsClick Here To Read/Download Order

'Claim For Interim Injunction Arose After 27 Yrs': Allahabad High Court Denies Appeal U/S 37 Of A&C Act, Cites Inordinate Delay

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