2016 INSC 1051 SUPREME COURT OF INDIA Ananthesh Bhakta Represented By Mother Usha A.Bhakta & Ors. Vs. Nayana S.Bhakta & Ors. C.A.No.10837 of 2016 (R.K.Agrawal and Ashok Bhushan,JJ.,) 15.11.2015 JUDGMENT Ashok Bhushan,J., SLP(C)No. 31179 of 2014 1. Leave granted. 2. This appeal has been filed against judgment dated 08.07.2014 of High Court of Karnataka in Civil Revision No. 219 of 2014. The Civil Revision was filed by the appellants against the judgment and order dated 27th May, 2014 of vacation District Judge, Mangalore in Original Suit No. 5 of 2014 filed by the appellants/plaintiffs. In the Suit, I.A. No. IV was filed by the defendants/respondents under Section 8(1) of Arbitration and Conciliation Act, 1996, relying on arbitration agreement in retirement deed dated 25.07.2005(hereinafter referred to as reti- rement deed) as well as in the partnership deed dated 05.04.2006(hereinafter referred to as partnership deed). Learned District Judge has allowed the application filed by the defendant under Section 8(1) of 1996 Act. Parties to the suit were referred to the arbitration to settle the dispute as per arbitration agreement. The High Court wide impugned judgment has affirmed the order of Trial Court with observation that parties can press for an early trial. The Revision Petition was disposed of accordingly. Aggrieved against the judgment of High Court, the appellants/plaintiffs have filed this appeal. 3. The brief facts necessary to be noted for deciding this appeal are: "(i) Late Ramabhakta had started a business of manufacture and sales of 'Beedi' under the name 'M/s Neo Subhash Beedi Works'. After his demise, his six sons, namely, late M. Narasimha Bhakta, late M. Subhaschandra Bhakta, late M. Prakashchandra Bhakta, late M. Ganesh Bhakta, late M. Gangadhar Bhakta and late M. Ashok Bhakta, constituted the partnership firm. 1 SpotLaw (ii) M. Narsimha Bhakta retired from the firm as per the release deed dated 30 . 06. 1986 and the remaining partners continued with the firm. (iii) M.Prakashchandra Bhakta died on 20 . 03. 1995 and as per his Will, his minor son Master M. Vinayaka Bhakta was admitted to the partnership as per partnership deed dated 21.03.1995. On 06.03.1997, Subhaschandra Bhakta died and his LRs, namely Defendant Nos. 1 to 4 became partners. Ashok Bhakta died on 18.09.2001. The first plaintiff is son of late Ashok Bhakta. (iv) On 25.07.2005, retirement deed was executed in which Defendant Nos. 1 to 4 were stated to have retired from partnership. The partnership deed dated 05.04.2006 was entered between late M. Gangadhar Bhakta, M. Vinayaka Bhakta, Defendant No. 5 and M. Vipin Bhakta(S/o late M. Ganesh Bhakta) and Master M. Anantesh Bhakta,1st Plaintiff. M.Gangadhar Bhakta expired and his estate is represented by the Plaintiff Nos. 2 & 3. 4. The suit for partition was filed by M. Prakaschandra Bhakta and others against M. Subhaschandra Bhakta and others, being O.S. NO. 4 of 1985. The preliminary decree was passed on 31.07.1986. M. Subhaschandra Bhakta and others filed FDP No. 24 of 1992 for preparation of final decree in which the compromise petition dated 04.04.1994 was filed and compromise decree was passed on 05.04.1994. As per the compromise decree, Item No. 1 of 'A' schedule property was allotted to M. Subhaschandra Bhakta and Item No. 2 was allotted to M. Prakashchandra Bhakta. 5. An agreement to sale dated 19. 04 . 1993 was executed by M. Prakashchandra Bhakta in favour of partnership firm. Similar agreement to sell dated 19.04.1993 was also executed by M.Subhaschandra Bhakta in favour of firm. 6. A Suit No. 5 of 2014 was filed by three Plaintiffs (appellants) against six Defendants who are Respondent Nos. 1 to 6 in this appeal praying for permanent prohibitory injunction re- straining the Defendants or anyone claiming through them for transferring or alienating 'A' schedule property. Further, the permanent prohibitory injunction was sought against the Defendant regarding possession and enjoyment of property by Plaintiff. The Defendant had filed I.A.No.IV under Section 8(1) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) on 09 . 05 .2 014 , praying to pass an order Referring the parties to the arbitration for adjudication of the disputes raised by the Plaintiff in the Suit. The application was not accompanied by retirement deed and partnership deed. 7. On 12.05.2014, the original retirement deed and the partnership deed were produced by the Defendant along with the list. The counter affidavit to the application I.A. No. IV was also filed by the Plaintiff. The Learned District Judge heard the I. A.No.IV as well as the objections raised by the Plaintiff and by an order dated 27.05.2014, pass the following order: "I.A.No. IV filed under Section 8(1) of the Arbitration and Conciliation Act, 1996 by the 2 SpotLaw defendants is allowed. The parties to the suit are referred to the Arbitration to settle their disputes and differences, in view of the Arbitration Agreement.} The suit of the plaintiffs stands disposed off accordingly." 8. Learned Counsel appearing for appellants in support of this appeal raised following submissions: "(i) The application I.A.No.IV of 2014 praying for referring the matter to arbitration was not accompanied by the original retirement deed dated 25.07.2005 and partnership deed dated 05.04.2006, hence the application was liable to be dismissed under Section 8(2) and Learned District Judge committed error in allowing the application. According to Section 8(2) of the Act, it is mandatory to file the original arbitration agreement or a duly certified copy thereof along with the application seeking reference to the arbitration. (ii) All the parties to the suit were not parties to the arbitration agreement as claimed in retirement deed and partnership deed. Hence, dispute could not have been refereed to the arbitrator. (iii) The firm being an unregistered firm, no reference to the arbitration can be made with regard to the dispute relating to unregistered firm." 9. Learned counsel appearing for respondents have refuted the submissions and contends that Learned District Judge after considering all aspects of the matter have rightly made the reference to the arbitrator. It is submitted that there was clear arbitration agreement in the retirement deed as well as in the partnership deed as has been noted by District Judge and the suit could not have proceeded. All the Plaintiffs as well as Defendant Nos. 1 to 4 and Defendant No. 5 were parties to the arbitration agreement either personally or claiming through the person who was party to the agreement. The Defendant No. 6 has not inherited any right in the partnership firm and was unnecessarily impleaded by the Plaintiff. Mere presence of Defendant No.6 as one of the Defendants does not preclude the implementation of arbitration agreement. With regard to non-filing of retirement deed and partnership deed along with application I.A.No. IV of 2014, two submissions have been raised. Firstly, it is contended that the Plaintiff themselves has filed both retirement deed and partnership deed along with the list of documents and having admitted both retirement deed and partnership deed, non-filing along with the application I.A.No. IV was inconsequential. Secondly, the Defendant themselves immediately after three days of filing their I.A.No. IV of 2014 had filed the original retirement deed and partnership deed on 12 .05.2014 and at the time the matter was considered by District Judge, original deeds were on the record. Hence, the application I.A.No. IV was not liable to be rejected on this ground. There is no such provision which prohibits the adjudication of dispute by arbitration regarding an unregistered partnership firm. 3 SpotLaw 10. We have considered the submissions of learned counsel for the parties and perused the records. 11. From the pleadings on records and submissions made, following three issues arises for consideration: "(1) Whether non-filing of either original or certified copy of retirement deed and partnership deed along with application I.A.No. IV dated 09.05.2014 entailed dismissal of the application as per section 8(2) of 1996 Act. (2) Whether the fact that all the parties to the suit being not parties to the retirement deed/partnership deed, the Court was not entitled to make the reference relying on arbitration agreement. (3) Whether dispute pertaining to unregistered partnership deed cannot be referred to an arbitration despite there being arbitration agreement in the deed of retirement/partnership deed. ISSUE NO.(1) 12. Two facts which emerged from record in this respect need to be noted. Firstly, the plaintiffs in their plaint of O.S.No. 5 of 2014 have referred to and admitted the retirement deed dated 25.07.2005 and partnership deed dated 05. 04 . 2006 in para 5 of the plaint. The plaintiffs themselves have filed the photocopies of deed of retirement dated 25.07.2005 as the document no. 6 in the list and photocopies of partnership deed dated 05.04..2006 as document no. 7 as have been noted in para 2 3 of the District Judge judgment. Further, although initially the application filed by Defendant I.A.No. IV dated 09.05.2014 was not accompanied by copy of retirement deed and partnership deed. The Defendant on 12.05.2014 filed the original retirement deed and partnership deed along with the list. It is useful to note the findings recorded by District Judge in the above context in paragraph 39 which is to the following effect: "39. The materials on record clearly goes to show that I.A.No. IV was filed by the defendants on 09.05.2014. It is true that the application was not accompanied by the Retirement Deed and the Partnership Deed either the originals or the certified copies. On 12.05.2014 the original Retirement Deed and the Partnership Deed were produced by the defendants along with the list." 13. Section 8 which falls for consideration in the present case provides as follows: " 8. Power to refer parties to arbitration where there is an arbitration agreement- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when 4 SpotLaw submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made." 14. The appellants submit that sub-section (2) of Section (8) provides that "the application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof." They submit that admittedly with the application I.A.No. IV filed on 09.05.2014, original or certified copy of the Retirement Deed and Partnership Deed was not filed. 15. Learned Counsel to the appellants also placed reliance on a judgment of this court reported in, Atul Singh & Othes Vs. Sunil Kumar Singh & Others1. In the above case, defendant had moved a petition on 28.02.2005 praying for referring the dispute to arbitration. The Trial Court had dismissed the petition on the ground that the predecessor in interest of the plaintiff was not party to the Partnership Deed executed on 17.02.1992. Hence the main relief being declaration of the deed to be void which could have been granted only by the Civil Court, the dispute could not be referred. Defendant filed Civil Revision which was allowed by the High Court. One of the submissions made before this court was that as per sub-section (2) of Section (8), the application could not have entertained unless it was accompanied by original arbitration agreement or duly certified copy thereof. This court held that there is no whisper in the petition that the original agreement or a duly certified copy is being filed. There was non compliance of Section 8(2). Hence the reference could not have been made. Following was stated by this court in paragraph 19: " 19. There is no whisper in the petition dated 28.02.2005 that the original arbitration agreement or a duly certified copy thereof is being filed along with the application. Therefore, there was a clear non-compliance with sub-section (2) of Section 8 of the 1996 Act which is a mandatory provision and the dispute could not have been referred to arbitration. Learned counsel for the respondent has submitted that a copy of partnership deed was on the record of the case. However, in order to satisfy the requirement of sub-section (2) of Section 8 of the Act, Defendant 3 should have filed the original arbitration agreement or a duly certified copy thereof along with the petition filed by him on 28.02.2005, which he did not do. Therefore, no order for referring the dispute to arbitration could have been passed in the suit." It is relevant to note that in Atul Singh's case (Supra), the submission of respondent was noticed that the copy of the Partnership Deed was on the record of the case, but the Court has not proceeded to examine as to when such copies are already on record what is the effect. 5 SpotLaw 16. In this context, the reference is made to Judgment of this Court in Bharat Sewa Sansthan Vs. U.P.Electronics Corporation Ltd2. In the above case, two judge bench of this Court has held that photocopies of lease agreement could be taken on record under Section 8 for ascertaining the existence of arbitration clause. Following was stated in paragraph 24: "24. The respondent Corporation placed on record of the trial court photocopies of the agreements along with an application under Section 8(1) of the Arbitration Act. The High Court, in our view, has rightly held that the photocopies of the lease agreements could be taken on record under Section 8 of the Arbitration Act for ascertaining the existence of arbitration clause. Thus, the dispute raised by the appellant Sansthan against the respondent Corporation in terms of the arbitration clause contained in the lease agreement is arbitral." In the case of Atul Singh (Supra), which was also a judgment of two Judge Bench, earlier judgment in Bharat Sewa Sansthan was not cited. However, for purposes of this case, we need not enter into the issue as to whether there is a compliance of section 8(2) if photocopies of the arbitration agreement is already on the record and not disputed by the parties. 17. There is one another aspect of the matter which is sufficient to uphold the order of the District Judge. Section 8(2) uses the phrase "shall not be entertained". Thus, what is prohibited is the entertainment of the application unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. 18. The word 'entertained' has specific meaning in P. Ramanatha Aiyar's Advanced Law Lexicon word 'entertained' has been defined as: " 1. To bear in mind or consider esp, to give judicial consideration to (the Court then entertained motions for continuance). 2. To amuse or please. 3. To receive(a person) as a guest or provide hospitality to (a person). The expression 'entertain' means to 'admit a thing for consideration' and when a suit or proceeding is not thrown out in limine but the Court receives it for consideration and disposal according to law it must be regarded as entertaining the suit or proceeding, no matter whatever the ultimate decision might be." The Blacks Law Dictionary also defines this word 'entertain' as follows: "To bear in mind or consider;esp., to give judicial consideration to