KUNJ BEHARI Vs. K D CHURIWALA

JUDGEMENT

(1.) THE respondent No. 1, namely, M/s. K. D. Churiwala and Sons, is a Hindu undivided Family (HUF) and respondent Nos. 2 to 6 are its co-parceners. Respondent No. 6 is the Karta of this HUF. This HUF owned one plot No. W-122, measuring 1299 sq. yds. in Greater Kailash Part-II, New Delhi. The said HUF, through its Karta, approached the petitioner for development and construction of the said plot, for which purpose a partnership under the name and style of M/s. Builder Associates (hereinafter referred to as the ?partnership firm?) was formed on 3. 12. 1979. This partnership firm consisted of the petitioner, respondent No. 6 and Shri Rishi Kumar, Karta of Radhey Lal Rishi Kumar (HUF) as partners. In this petition, Shri Rishi Kumar was originally petitioner No. 2, but later on vide order dated 30. 11. 1987, he is transposed as respondent No. 7 instead of petitioner No. 2. According to the petitioner, disputes had arisen and since the partnership deed provided for settlement of disputes through arbitration, the petitioner filed the instant petition under Section 20 of the arbitration Act, 1940 (for short, ?the Act?) for appointment of an arbitrator and reference of disputes for adjudication by the said arbitrator. For some reason or the other, this petition is pending for all these years.

(2.) AS per the averments made in the petition, an oral agreement was entered into for development of the said plot of land and terms thereof were reduced into writing in the agreement dated 3. 2. 1979. This agreement was executed between the respondent No. 1 HUF and respondent No. 6, Karta of respondent No. 1 HUF on the one hand and the partnership firm on the other side. On behalf of the partnership firm, all the three partners signed the agreement, including the respondent No. 6. Thus, respondent No. 6 signed the agreement on both sides, namely, as Karta of HUF and as partner of the partnership firm. In furtherance of the collaboration agreement dated 3. 2. 1979, another agreement dated 6. 2. 1979 was also executed between the partnership firm and the HUF defining the role of various parties in the collaboration. Clause 7 of the latter agreement contained an arbitration clause.

(3.) THUS, on 3. 2. 1979 a partnership was entered into; on the same date partnership firm entered into the collaboration agreement with the HUF and within three days thereafter another agreement was entered into between the partnership firm and the HUF. In the agreement dated 6. 2. 1979, besides some other terms, a term about the payment of commission to the partnership firm was also inserted. According to the petitioner, this was done as the respondent No. 6 stated that the purpose of this agreement was to bifurcate the profits to be earned by the huf. It was subsequently understood between the parties that agreement dated 6. 2. 1979 had no effect on the main agreement between the parties and the same was entered into for the benefit of HUF only for the purpose of income-tax, etc.