SATISH AGGARWALS Vs. SUBHASH CHAND AGGARWAL

JUDGEMENT

(1.) This is a petition under Section 9 of the Arbitration & Conciliation Act, 1996which seeks the appointment of a receiver for the firm M/s. Sultan Chand & Sons &M/s. Premier Book Co., which were formed pursuant to a Partnership Deed dated2.4.1976 between Shri Prakash Chand and his brother and sisters who arerespondents 1, 2 & 3. The petitioners' deceased father Prakash Chand had 40 percent share and each of the respondents had 20 per cent share, and the partnershipdeed contained an arbitration clause.

(2.) On 10.9.1997 Shri Prakash Chand, died leaving his will dated 25.1.1997bequeathing his share in the partnership to his two sons who are the presentpetitioners. The defendants' 4-8 are daughters of the deceased Prakash Chand. Thedefendant No. 1 is the brother and respondent Nos. 2-3 are the sisters of PrakashChand and each had 20% share in the firm. The petitioner's case is that on the deathof Shri Prakash Chand, the partnership stood dissolved by operation of law underSection 42 sub-clause (e) of the Indian Partnership Act, there being no clause for thecontinuation of the partnership subsequent to the death of one of the partners.Pursuant to the death of the Shri Prakash Chand efforts were made to form a newpartnership including the two petitioners, as the new partners of the firm. However,these efforts did not fructify and consequently on 13.2.1998 the petitioners gavenotice to respondents 1 -3 to execute a partnership with the petitioners within 7 days.No reply was received to this Notice. On 27.2.1998 the petitioners asked therespondents 1-3 to agree to make a reference of the disputes to arbitration. However,no reply was received by the petitioner. On 9.3.1998 notice was given by thepetitioners to the respondents 1 -3 saying that the respondents 1-2 are misusing theproperties of the firm by setting up a new firm by the name of Sultan Chand & Sons/Premier Book Co. and the daily proceeds were being taken away by respondents.This notice also proposed the name of Shri R.N. Sawhney, the Income-tax Adviser ofthe erstwhile firm as an Arbitrator. On 17.3.1998, the present petition under Section 9of the Arbitration & Conciliation Act, 1996 was filed by the petitioner for appointmentof a Receiver and for grant of an injunction restraining the respondents 1 & 2 fromcarrying on the business in the name of Sultan Chand & Sons or Premier Book Co. orusing any properties of the dissolved firm or receiving cash sale of books.

(3.) On 26.3.1998, the following order was passed by this Court: