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Darshan Kapur Vs. Tilak Raj - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit No. 100A of 1982
Judge
Reported in1982RLR516
ActsArbitration Act, 1940 - Sections 20
AppellantDarshan Kapur
RespondentTilak Raj
Advocates: B.T. Singh and; R.P. Kathuria, Advs
Cases ReferredSunderlal v. Smt. Bhagwati Devi
Excerpt:
- .....under a partnership deed dt. 86.79 to arbitration. so far as the execution of the partnership deed, the parties entering into partnership and the running of the partnership business, there is no dispute. clause 15 of the deed was : 'that all disputes which may arise amongst the partners or their legal heiis about the interpretation of this deed or their rights and liabilities there under or in relation to any other matter what-soever touching the partnership firm shall be decided in accordance with the provisions of indian arbitration act.'(2) according to the petitioner, she invested rs. 4,60,000.00 in the partnership business. nothing has, however, according to her, been returned to her, nor the accounts of partnership rendered. (3) the respondent has on his part, stated that the.....
Judgment:

D.R. Khanra, J.

(1) This is an application u/s 20 of the Arbitration Act, seeking reference of the disputes interse parties arising under a partnership deed dt. 86.79 to arbitration. So far as the execution of the partnership deed, the parties entering into partnership and the running of the partnership business, there is no dispute. Clause 15 of the deed was :

'THAT all disputes which may arise amongst the partners or their legal heiis about the interpretation of this deed or their rights and liabilities there under or in relation to any other matter what-soever touching the partnership firm shall be decided in accordance with the provisions of Indian Arbitration Act.'

(2) According to the petitioner, she invested Rs. 4,60,000.00 in the partnership business. Nothing has, however, according to her, been returned to her, nor the accounts of partnership rendered.

(3) The respondent has on his part, stated that the investment of the petitioner was of Rs. 2,70,000.00 only. He further adds that he had by a notice served upon the petitioner dissolved the partnership w.e.f. June, 1981. With this dissolution it is contended that the partnership ended, and, thereforee, the arbitration clause there under can no longer be available to any of the parties.

(4) I have heard both the parties and given my due consideration to all the circumstances. Whatever may be the position, whether the partnership was dissolved by the respondant or not, there is little doubt that a number of dispute exist between the parties under that partnership such as the capital investment of the petitioner and the rendition of accounts. The question to be determined is whether these disputes should be referred to arbitration in terms of the said arbitration clause. This clause is quite comprehensive and wide enough to cover all disputes arising amongst the partners or their legal heirs with regard to the interpretation of the partnership deed, their rights and liabilities there under, or in relation to any other matter, whatsoever, touching the partnership.

(5) The disputes now sought to be referred to arbitration are thus plainly covered by the arbitration clause. They are essentially related to the partnership affairs and the rights and liabilities arising there under between the partners. There is no warrant to interpret the arbitration clause as to become dead letter after the dissolution. Disputes of these nature could arise during the continuance of partnership or even after dissolution. In any of these circumstances, they are agreed to be resolved by arbitration. There are no reasons why parties be not obliged to abide by this agreement. Rather the arbitration was even made extensive on the death of a partner or partners to the rights and liabilities which migot devolve upon their legal heirs. This was a clear pointer to the intention of the parties to go into arbitration even after dissolution or death of any one or even both of the partners amongest their heirs. Not unoften references are made to arbitration under arbitration clause contained in contracts which are rescinded or cancelled by any of the parties. Those rescissions or cancellations do not thereby eliminate the operative incidence of the arbitration clause for resolving whatever disputes are left over between the parties. I am, thereforee, of the opinion that the arbitration clause in the present case is not in any manner nullified or rendered inoperative after the dissolution, if any, of the partnership. My this view finds support from the decision of the Allahabad High Court is the case of Sunderlal v. Smt. Bhagwati Devi, 1967 All. 400.

(6) Respondants have made reference to a number of decisions which relate to the moving of application u/s 34 of the Arbitration Act in pending suits for their stay. In this respect, it need hardly be stated that stay u/s 34 is a directionary matter, and the Court has also to assess whether circumstances exist which should justify proceeding with the suit. In the present case no circumstances exist to disentitle reference to the petitioner, especially when substantial part of her investment admittedly due to her, has not been paid by the respondent.

(7) It is relevant to take note here that even in suits for dissolution of partnerships and rendition of accounts, the Courts appoint Commissioners for going into fie accounts. This is what the arbitrator will primarily do in the present case, and in terms of the agreement between the parties, his decision will be final.

(8) The result, thereforee, is that the application u/s 20 of the Arbitration Act is allowed, and all the disputes inter se parties under the partnership are referred to the arbitration of Shri R.K. Bawaja, Advocate.


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