DURGA DEVI Vs. BHAG CHAND LOHIA

JUDGEMENT

(1.) The parties to the suit were stated to be partners under a written deed of partnership and were running the business under the name and style of Cloth Services of India, Mysore with offices in Delhi and Coimbatore. Certain disputes are stated to have arisen amongst the partners which in terms of an arbitration agreement existing between the parties were allegedly liable to be referred to arbitration. The plaintiff, therefore, had filed the present petition under Section 20 of the Arbitration Act for reference of such disputes to an arbitrator.

(2.) . The defendants have objected to the reference of disputes on various grounds and one of the grounds is that this Court has no jurisdiction to try this suit inasmuch as the registered office of the partnership firm was at Mysore, there was no branch office of the firm at Delhi, all transactions pertaining to even the depot at Delhi were rendered at the registered office at Mysore, all the books of accounts were being maintained at Mysore and the firm was also assessed to income tax at Mysore. No part of the cause of action is stated to have arisen within the jurisdiction of this Court and it was, therefore, stated that this Court could not try and entertain the petition.

(3.) . On 28th January, 1994, defendants filed an application being I.A.No.939/94 under Section 41(b) read with para 4 of the 2nd Schedule to the Arbitration Act alleging, inter alia, that the firm in which the parties to the suit were partners had inherited a site bearing No.AM-87, Shalimar Bagh, Delhi under a deed of partnership dated 16th February, 1983 from the previous partnership and the previous partnership had acquired this property from out of the funds of the firm in the name of Smt.Durga Devi Marodia, one of the partners of the firm, for a consideration of Rs.3,10,000.00 . It is stated that the payment at site at the time of auction on 22.6.1981 was made by the firm in the name of one of the partners, Smt. Durga Devi Marodia, and the said property was shown as the fixed assets of the firm in the previous partnership. The said property allegedly continued to be shown as partnership property without any dispute until Smt.Durga Devi Marodia in her reply dated 29th August, 1988 to I.A.1776/88 challenged the ownership of the said property in the name of the firm. On 3rd May, 1988, the Court passed an order prohibiting the transfer of the plot bearing No.AM-87, Shalimar Bagh, Delhi. On 3rd December, 1993, statement of plaintiff No.1 was also recorded by the Court. The statement is as under:-