ABRAHAM JOSEPH Vs. SUBODH KUMAR BAHL

JUDGEMENT

(1.) . By means of this petition under Article 227 of the Constitution the petitioner seeks to assail the order dated 24/01/2001, passed by the learned Additional District Judge, Delhi, thereby dismissing two applications under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) made on behalf of the petitioner-defendant No.3 and defendant No.2 seeking a reference of the dispute to arbitration in terms of the arbitration agreement between the parties.

(2.) . Briefly stated the relevant facts leading to the present petition are that the respondent-plaintiff had filed the suit for rendition of accounts and recovery of outstanding dues in respect of a partnership executed between the plaintiff and defendant Nos.2 and 3 vide a partnership deed dated 1/07/1976 which came to an end on 30th September, 1997 by efflux of time and, thereafter, became partnership at will. The defendant did not rendered the account to the plaintiff despite service of two notices dated 19.9.2000 and 10.12.2000. After the service of the summons of the suit, the petitioner-defendant No.3 instead of filing of his written statement filed an application under Section 8 of the Act pleading existence of arbitration agreement in the partnership deed and, therefore, the suit filed by the plaintiff was not maintainable and the subject matter of the suit was liable to be referred to arbitrator in terms of the arbitration agreement. The application was opposed by the plaintiff-respondent. Execution of the partnership deed dated 1.6.1995 containing arbitration clause was not disputed but it was denied that the petitioner-defendant No.3 was entitled to invoke the said arbitration agreement for reference of dispute to arbitration mainly on the ground that their existed no dispute and in fact none was raised which required to be referred to arbitrator. The learned trial court found the existence of the arbitration agreement contained in the partnership deed but still declined to accede to the prayer of the petitioner for making a reference to arbitrator on the ground that on the dissolution of the partnership at will, a partner had statutory right to maintain a suit for rendition of account and the provisions of Section 34 of the Arbitration Act 1940 could not be invoked for staying the proceedings in the suit.

(3.) . I have heard the learned counsel for the parties and have given my thoughtful consideration to their respective submissions. Learned counsel for the petitioner has emphatically urged that once the trial court found the existence of an arbitration agreement for the resolution of the dispute between the parties through arbitration, there was no escape from the conclusion that the provisions of Section 8 of the Act would come into play and the matter ought to have been referred to the arbitrator. In support of this contention he has heavily relied upon to a Supreme Court decision in the case of P.Anand Gajapathi Raju & Ors. Vs. P.V.G. Raju (dead) and Ors. (2000) 4 scc 539. In the said case the Supreme Court has morefully examined the scope of provisions of Section 5 and Section 8 of the Act and for the purposes of invoking Section 8 of the Act laid down as under:-