Madhya Pradesh High Court Dismisses Revision Due To Insufficient Evidence, Prima Facie Proof Needed To Interpret Sec 8 of A&C Act Invocation

Madhya Pradesh High Court Dismisses Revision Due To Insufficient Evidence, Prima Facie Proof Needed To Interpret Sec 8 of A&C Act Invocation

The High Court of Madhya Pradesh dismissed a revision petition seeking to invoke Section 8 of the Arbitration and Conciliation Act, 1996. This was in relation to a dispute regarding the transfer of cheques under a partnership deed. The arbitration clause in the deed specifically addressed disputes arising between the parties concerning the firm's business or the interpretation of subsequent provisions relating to the firm and its business. However, the High Court observed that there was no evidence indicating that the mentioned amount was provided to the petitioner in connection with the partnership's business. Consequently, the High Court concluded that Clause 22 of the partnership deed, which governed arbitration in business-related disputes, would not be applicable in this instance.

The petitioner, Mr. J.K. Sthapak, and the respondents, Mr. Satish Kumar Saxena and Mr. Manish Saxena, entered into a partnership deed. Clause 22 of the partnership deed included an arbitration clause that addressed disputes arising between the parties concerning the firm's business or the interpretation of subsequent provisions relating to the firm and its business. The petitioner claimed that the respondents issued three cheques totaling Rs.22 lakh in connection with the firm's business, as per Clause 9 of the partnership deed. Allegedly, this amount constituted the petitioner's share of the capital invested in the partnership firm.

When a dispute arose regarding this transfer, the petitioner approached a civil court in Bhopal, invoking Section 8 of the Arbitration and Conciliation Act (Arbitration Act). However, his application was dismissed. Subsequently, he filed an appeal in the District Court, which was also dismissed. Feeling aggrieved, he filed a revision petition in the High Court of Madhya Pradesh under Section 115 of the Code of Civil Procedure (CPC).

The respondents argued that there was no evidence on record indicating that the transaction of Rs. 22 lakh was related to the business of the partnership. They maintained that there was no prima facie evidence establishing that the amount was given in connection with any business of the firm.

The court noted that two out of three cheques were issued from the firm’s account, and one cheque was issued from the plaintiff's account. The court further highlighted that even prima facie, there is no evidence to demonstrate that Rs. 22,00,000/- was given to the plaintiff from the firm's account.

On the order of the appellate court, the court found that it considered the submissions of the petitioner and the documents available on record. The appellate court concluded that there were no grounds to interfere with the trial court's decision, and its order was well reasoned, taking into account all the facts and documents available on record.

Based on the discussion, the court concluded that the lower court did not commit any illegality or perversity in its decision, and there were no grounds for interference in the impugned order. Therefore, the revision petition by the petitioner was dismissed, and the decision of the lower court was affirmed.