The Delhi High Court has dismissed a Section 37 appeal with exemplary costs of ₹1,00,000, upholding an arbitral award that mandated a 50-50 partition of a Naraina-based partnership property. The Division Bench, comprising Justice Prathiba M. Singh and Justice Madhu Jain, condemned the “non-bonafide” conduct of the appellant, ruling that the original 1974 partnership remained legally “alive” until its formal dissolution in 2015, despite attempts to claim otherwise using unproven documents.
Factual Background
The dispute originated within M/s Sri Narayan Rajkumar, a family partnership firm established in 1973 and reconstituted on July 22, 1974. The partners included Shri Nityanand Yadav, Smt. Prem Lata Surekha (the Appellant), and Shri Chakradhari Surekha (the Respondent). The firm acquired a perpetual lease for Plot No. Y-10, Naraina, New Delhi, in 1980.
Following the death of partner Nityanand Yadav in 2003, the relationship between the surviving partners soured. Shri Chakradhari Surekha alleged that the Appellant and her husband, Shri Vishnu Kumar Surekha, had fabricated multiple partnership deeds between 1985 and 1999 to show his resignation and the husband’s induction as a partner. On March 23, 2015, the Respondent issued a notice to dissolve the firm and invoked arbitration. A Sole Arbitrator subsequently awarded a 50% share of the property to each surviving partner, which was challenged by the Appellant.
Arguments of the Parties
Appellant’s Submissions: Represented by Senior Advocate Rajshekhar Rao, the Appellant argued that the 1974 deed had been superseded by subsequent agreements and that the Respondent had resigned decades ago. A technical challenge was also raised regarding the Arbitrator’s mandate, asserting it had expired under Section 29A of the Arbitration and Conciliation Act (as amended in 2015), as the second invocation occurred in July 2016.
Respondent’s Submissions: The Respondent contended that the Appellant failed to prove the existence of any valid reconstituted deeds, providing only photocopies that did not match official Registrar of Firms records. It was argued that since the initial notice for arbitration was sent in March 2015 (pre-Amendment), the Section 29A time limits did not apply.
Court’s Analysis
On Procedural Timelines (Section 29A): The Court rejected the Appellant’s jurisdictional challenge. Citing Section 26 of the Amendment Act, the Bench noted:
“The arbitral proceedings commenced on 23.03.2015, when the notice invoking arbitration was first sent, well before the enactment of the Amendment Act. Accordingly, it must be concluded that Section 29A and the time limits stipulated therein are not applicable.”
On the Validity of Partnership Deeds: The Court affirmed the Arbitrator’s findings that the Appellant’s defense was built on “half-baked evidence.” It was noted that the Appellant refused to enter the witness box, and the documents produced were at total variance with official records. The Court observed that a partnership “at will” remains alive until formally dissolved:
“The partnership of 1974 may have transacted no business, but it remained alive till it was formally dissolved. At worse, it can be said that it was on ventilator, and became dead only when the claimant pulled the plug on March 23, 2015.”
On Judicial Interference under Section 37: Referencing MMTC Limited v. Vedanta Limited and Konkan Railway Corporation Limited v. Chenab Bridge Project, the Court emphasized that Section 37 is not a “normal appellate jurisdiction.” The Bench held that it would not disturb concurrent findings of fact unless there was patent perversity.
Decision
Finding the appeal “bereft of any merit,” the High Court dismissed it. The Court took a grim view of the Appellant’s conduct, specifically the unauthorized sale of one-third of the subject land.
The Bench imposed costs of ₹1,00,000 on the Appellant, noting:
“The conduct of the Appellant is thus, not bonafide… all reasonable proposals for amicable resolution were refuted by the Appellant. Further, the Appellant has sold 1/3rd of the subject land without permission of the other partner of the firm.”
The Appellant is directed to pay the costs to the Respondent within two weeks.
Case Details Block:
- Case Title: Smt. Prem Lata Surekha v. Sh. Chakradhari Surekha & Ors.
- Case No.: FAO(OS) (COMM) 70/2025 & CM APPL. 24573/2025
- Bench: Justice Prathiba M. Singh and Justice Madhu Jain
- Date: April 21, 2026
