GANESHLAL TAPADIYA Vs. BASAVARAJ PATIL @ RAJA PATIL

JUDGEMENT

(1.) Petitioners have sought for appointing an appropriate Arbitrator amongst the names of Arbitrators mentioned in the notice issued by them to the respondent on 19-7-2012 or any other appropriate Arbitrator as deemed fit for adjudication of dispute regarding ownership of land of M/s. Siddhaganga Enterprises and rectification of revenue records in respect of land in Sy. Nos. 95/4 and 96 measuring 5.21 acres of Oorkere Village, Tumkur. According to the petitioners, they are managing partners. Petitioners along with respondent and some other persons constituted a partnership on 25-5-1981 for the purpose of manufacturing cement products. During 20-7-1982, the partnership was reconstituted and also once again on 6-5-1989, and thereafter, three of the partners have died. Again on 10-6-1992, partnership was constituted in the name of M/s. Siddhaganga Enterprises having its head office at Gulbarga and branch at Tumkur According to them, it was to carry out the business of manufacturing of press-stressed concrete poles and other allied products and any other business mutually agreed between the parties. The share of profits of each of the partners is also defined. Clause 15 of the partnership deed provided for arbitration--if any dispute arises with regard to conduct of business or in respect of interpretation, operation or enforcement of any of the terms of the partnership, either during the continuation of partnership or on its dissolution, the same shall be referred to arbitration of a person or persons to be appointed by mutual consent and the decision of the arbitrator will be binding on the parties thereto. It is further stated, respondent had issued a notice on 22-9-2007 that he has dissolved the partnership firm with immediate effect. For the notice, reply was issued on 27-9-2007 and they have decided to assent for the dissolution resolution. As there were commitments and orders in favour of the partnership from which were subsisting, those commitments were to be honoured by the firm first and also as demanded by the respondent, accounts for the year 1991-1992 to 2005-2006 were sent to the respondent. Although according to the petitioners, accounts were continuously made available to the respondent in a routine manner, it was also filed before the income fax authorities in the regular course of business. Even after completion of audit of accounts, it was being regularly sent to all the partners including the respondent. Since the respondent has caused notice in the newspaper stating that on 28-9-2007 he has dissolved the firm and warned the public not to deal with the firm and has also addressed letter to various banks and branches, in this regard, petitioners filed O.S. No. 323 of 2007 before the II Additional Civil Judge (Junior Division), Gulbarga for a declaration that petitioners herein had a right to continue the affairs of the partnership firm, to complete unfinished transactions and also for a perpetual injunction to restrain respondent-defendant from interfering with the day-to-day affairs of the firm in respect of bank and other authorities like KEB, Tax Department, etc. In the suit filed, respondent is said to have taken a contention that there is an arbitration clause and matter requires to be referred to the arbitrator. Even respondent filed a suit in O.S. No. 57 of 2008 before the Principal Civil Judge, Gulbarga seeking for a declaration and also for perpetual injunction and for rendition of the accounts and to declare that the partnership is dissolved on 22-9-2007.

(2.) In the property situate at Oorkere, Tumkur to the extent of 5.21 acres the manufacturing unit of the Firm is located. The name of the Firm is also mentioned as M/s. Siddhaganga Enterprises. It appears, according to the petitioners, the property was purchased out of partnership funds. However, according to the respondent, it is his own property and is purchased out of his own income and it does not belong to the partnership firm. The title deed was also deposited by the respondent in the State Bank of Hyderabad as equitable mortgage and also as collateral security.

(3.) The main grievance of the petitioners is, respondent made unjust enrichment and appropriation of the amount to himself to the tune of Rs. 7,29,587/- which was released by the National Highway Authorities towards acquisition of the said land for the purpose or road widening and the said amount was got released in the name of the respondent since his name appears in the revenue records. Also the said amount has been debited to the account of the respondent. Further, the income tax on the profits of the said amount was paid by the Firm for the assessment year 2004-2005. On these grounds, petition is filed seeking for appointment of Arbitrator amongst the list of Arbitrators stating that there are differences between the petitioners and the respondent and on various issues.