MATHAI Vs. MANI

JUDGEMENT

(1.) This civil revision petition was referred to a Division Bench for decision by one of us, & it arises from an order passed by the lower court under S.8 of the Indian Arbitration Act. The respondent, who was the petitioner in the court below, filed an application praying that an arbitrator may be appointed for deciding the six matters mentioned in the application. There were five counter petitioners to the application. The petitioner in the court below & the counter petitioners there, have entered into a partnership under an agreement, dated 1st December 1961 for running a business in engineering contracts and supplies. According to the terms of the agreement the works of contract undertaken by the partnership have to be properly executed and accounts maintained and the profit and loss of every year to be taken after submission of accounts for auditing to the auditors approved by the partners. The parties got on amicably for some time, but subsequently differences arose among them. Alleging that counter petitioners 2 to 5 are only the nominees of the 1st counter petitioner, that the 1st Counter petitioner is managing the partnership affairs without consulting the petitioner, and that the 1st counter petitioner has diverted the funds of the partnership unauthorisedly to other purposes without consulting the petitioner, the petitioner sent a registered notice on 14th July 1963 expressing his intention to retire from the partnership after the expiry of three months in accordance with the provisions contained in the deed of partnership and requesting the 1st counter petitioner to concur in the appointment of an arbitrator to decide the matters in dispute between the parties. As there was no agreement among the partners with regard to the nomination of an arbitrator, the petitioner filed the petition for the appointment of an arbitrator to decide these matters. The petition was opposed by the counter petitioners. Their case was that the business of the partnership was being carried on by the 1st counter petitioner in consultation with the petitioner, that the funds of the partnership have not been diverted for other purposes, that the 1st counter petitioner has intimated that there was no objection for the appointment of an arbitrator to settle the disputes which may arise in the course of the winding up of the partnership, that the counter petitioners 3 and 4 have sent similar notices, that S.8 of the Act was not applicable, and that the majority of the partners have nominated an arbitrator in accordance with the provisions of the partnership deed.

(2.) Clause (17) of the partnership agreement provides: "All disputes between the Partners in relation to any (matter) whatsoever touching the Partnership affairs or the construction of this agreement and whether before or after the termination of the agreement shall be referred to a single arbitrator to be appointed by the majority of the partners and such arbitrator shall have full power at his discretion to dissolve the Partnership".

(3.) It is unnecessary in the circumstances of this case to consider the other points in dispute between the parties in the view which we are taking about the applicability of S.8(1)(a) to the facts of this case. S.8 of the Arbitration Act reads as follows: