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Ramani Mohan Barman Vs. Sm. Gouri Rani Barman and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberMatter No. 1050 of 1976
Judge
Reported inAIR1977Cal128
ActsArbitration Act, 1940 - Section 34
AppellantRamani Mohan Barman
RespondentSm. Gouri Rani Barman and ors.
Advocates:Banerjee, Adv.
DispositionApplication dismissed
Cases ReferredGanesh Chandra Dey v. Kamal Kumar Agarwal
Excerpt:
- .....a court of law by other party, in the facts of this case, i am satisfied that the stay of the said suit for dissolution of the partnership firm should not be granted the reasons why i have come to the said conclusion are as follows:5. at no stage before the suit was filed against the petitioner, the latter expressed any desire to go for arbitration although disputes were raised from december, 1973 till november, 1975 in large number of letters regarding the valuation of the petitioner's share. thus, it cannot be said that the petitioner was ready and willing to decide the dispute by arbitration before the suit was filed.6. it has been contended by mrs, banerjee, counsel for the petitioner, that by the said letter dated december 1, 1973, the petitioner has expressed his desire to retire.....
Judgment:
ORDER

Masud, J.

1. This is an application under Section 34 of the Arbitration Act, 1940 for stay of a suit filed by the respondent Sm. Gouri Rani Burman for dissolution of a partnership firm under Section 44(d) and (g) of the Partnership Act. The facts of the case may, briefly, be stated as follows:

2. On August 7, 1964, a registered partnership was constituted between Gouri Rani Debi, respondent No. 1, Ramani Mohan Burman, the petitioner, and 3 children of Gouri Rani, namely, Kumari Sajal Rani Burman, Kumari Bharati Burman and Kumari Bani Burman who were 15 years, 13 years and 11 years old in 1964. On December 1. 1973, the petitioner wrote a letter to the said Gouri Burman expressing his wish to discontinue as a partner of the said firm. In the said letter he has suggested her to buy his share in the partnership firm for a sum of Rs. 30,000/-. Thereafter, long correspondences took place till November 20, 1975, for settling the amount which would be payable to the petitioner as the value of his share. On November 11, 1976, a suit was filed by the said Gouri Burman and her children against Ramani Mohan Burman which is pending in this Court.

3. The said partnership agreement contained an arbitration clause which reads as follows:

'21. All disputes arising between the partners in any matter relating to the partnership business or regarding the interpretation of these presents shall be referred to the arbitration of two Arbitrators--one to be appointed by each of the parties hereto of the first and third part and the decision of the said Arbitrators or in case of difference between them the decision of the Umpire to be appointed by them shall be final and binding upon the partners.'

4. It is well settled that there is an element of judicial discretion in staying a suit under Section 34 of the Arbitration Act. The language of this section shows that the Court may make an order staying legal proceedings provided it is satisfied (a) there is no sufficient reason why matter should not be referred to arbitration and (b) the party seeking arbitration was ready and willing to take recourse to the arbitration proceeding at the time when the suit or proceeding is filed in a Court of law by other party, In the facts of this case, I am satisfied that the stay of the said suit for dissolution of the partnership firm should not be granted The reasons why I have come to the said conclusion are as follows:

5. At no stage before the suit was filed against the petitioner, the latter expressed any desire to go for arbitration although disputes were raised from December, 1973 till November, 1975 in large number of letters regarding the valuation of the petitioner's share. Thus, it cannot be said that the petitioner was ready and willing to decide the dispute by arbitration before the suit was filed.

6. It has been contended by Mrs, Banerjee, Counsel for the petitioner, that by the said letter dated December 1, 1973, the petitioner has expressed his desire to retire from the partnership firm and, as such, the partnership firm has already been dissolved, inasmuch as, the partnership consisted of two persons and 3 minors, who were only given the benefits of partnership. Reliance has been placed by her on Irch Mehta v. M. Mehta, AIR 1971 SC 1953. This contention of Mrs, Banerjee cannot be accepted. There ore five partners three of whom were minors in 1964. They all have become majors in 1970 under Section 30(5) of the Partnership Act. Further, no formal notice of dissolution has been given by the petitioner although he suggested to do the same in his lawyer's letter dated March 7, 1974. Thus, it is not correct to say that by petitioner's letter dated 1-12-73, the petitioner has expressed his desire to dissolve the partnership under Section 32(1)(c) of the Partnership Act, 1932. The Supreme Court decision cited by Mrs. Banerjee is distinguishable. There, the arbitration clause was expressed in the widest possible language, and the petitioner expressed his readiness and willingness to go to arbitration at a very early stage. Further, admittedly, that was a case where dispute arose between two partners.

7. I am also satisfied that there are sufficient grounds for not referring disputes raised between the parties to arbitration. The arbitration clause in this particular case, is not wide enough to decide the question of the issues relating to dissolution of partnership or whether notice of dissolution under Section 32(1)(c) has been served. Nor the Arbitrators have been empowered to decide the valuation of the petitioner's share as in the said Supreme Court case, where arbitration clause covered disputes raised before and after the dissolution of the partnership firm. Further, there is nothing to show that the petitioner ever expressed his desire to retire from the partnership firm to the other three partners, who have attained majority by operation of law, as set out above. The three children Who have become adult partners have not been given in the arbitration clause their right to choose their own nominees as arbitrators. As there has been no formal notice of dissolution before the suit was filed, the respondent Gouri Bur-man has exercised her statutory right under Section 44(d) and (g) of the Partnership Act. It is to be remembered that the plaint in this suit amounts to notice of dissolution: Vide Sailendra Nath Kumar v. V. Chillar Ramia, ILR (1951) 2 Cal 140 (141). The disputes between the parties should conveniently be decided in a suit which has been filed by Gouri Burman. In any event the language of the arbitration clause is vague in respect of the disputes in connection with dissolution of the par-nership firm and also valuation of its assets. All the issues can best be decided in the suit which is comprehensive enough to decide the issues between the parties. Further, the partnership firm is not carrying a big business and the partners are also close relations. It is, therefore, not desirable, that the parties should have their disputes decided by two arbitrators whose award may again be referred to an Umpire, Thus, in my view, a decision on the disputes between the parties before the Arbitrators would delay the matter and would not be advantageous to the parties. Reference may also be made to Ganesh Chandra Dey v. Kamal Kumar Agarwal, 0065/1971 : AIR1971Cal317 .

8. For all the reasons stated above, there will be no order on this application. The application is dismissed. Costs of this application be costs in the pending suit


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