SUNDARAN Vs. REJI

JUDGEMENT

(1.) In Arbitration Request No. 39 of 2001, this Court appointed a retired District Judge as arbitrator to resolve the dispute between the appellant and first respondent relating to "Kochukarippal Jewellery' which was stated to be a firm constituted by the appellant and first respondent. According to the first respondent, a partnership deed was executed for conducting business in the manufactures and sale of jewellery items on 14.1.1999. It was intended to be run in a shop room which had been used by the appellant as a proprietary concern for the business conducted by him. The total capital of the proposed firm was agreed to be Rupees Five lakhs to be contributed equally by the appellant and first respondent. The value of the machineries, furniture and other rights of the proprietary concern of the appellant worth Rs. 2,50,000/- was agreed to be treated as share capital of the appellant and first respondent advanced cash of Rs. 2,50,000/- towards his share of capital. They purchased 464 grams of gold from Bhima Jewellery for jewellery business and started the business. The details of the same were incorporated in clause 3 of the partnership deed which was prepared by Chartered Accountant. The appellant being a goldsmith, by profession, was designated as the Managing Partner of the firm. It is the case of the first respondent that after commencement of the business, appellant treated the firm as a proprietary business and respondent was even denied the right scrutinize the business account and refused to give his share of profit. Thereafter, first respondent issued notice to the appellant seeking statement of accounts. That request was turned down. Therefore, first respondent claimed the capital investment of Rs. 2,50,000/- made by him and also share of profits from the business at the rate of Rs. 5,000/- per month for a period of 45 months and also a sum of Rs. 25,000/- as half of the value of the goodwill of the business. In view of the arbitration clause in the arbitration deed, arbitrator was appointed by this Court despite objections from the appellant. First respondent filed detailed claims before the arbitrator. Appellant filed a counter statement before the arbitrator denying the existence of the firm and execution of the partnership agreement. Even though appellant wanted to refer the matter for expert opinion regarding the genuineness of the signature, arbitrator did not allow the request and proceeded with the arbitration and passed an award for payment of Rs. 2,83,427/- with 12% interest per annum from 6.9.2003 till realization. Appellant filed petition under section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award dated 5.9.2003 in Arbitration Request No. 39 of 2001. The District Court dismissed the petitioner. Hence, this appeal was filed.

(2.) The arbitrator found that the partnership agreement was proved by calling the witnesses to the execution of the document. The Chartered Accountant (PW2) corroborated the evidence of first respondent who was examined as PW1 regarding the execution of the partnership deed. He deposed that the partnership deed was prepared by him and both partners went to his office and had jointly furnished materials for the preparation of the partnership deed. He himself was an attesting witness. Ext.P7 receipt was also proved. Ext.P7 receipt kept in the office. Project report and balance sheet produced as Exts.R2 and R3 also contained signature of PW1. Those documents were produced by the appellant himself. PW3, proprietor of an advertisement firm testified before the arbitrator that he signed and attested the partnership deed. The entire evidence adduced before the court was considered by the arbitrator and found that the arbitration request was genuine. The District Court also observed that even if the partnership deed is not sent for expert report for verifying the signature it will remain as an opinion. The arbitrator has to decide the matter on evidence. All contentions raised by the parties were considered by the arbitrator. With regard to the merits, not much arguments were made before the arbitrator. The District Court also considered the matter and agreed with the arbitrator. In any event, there was no perverse finding. This court is not sitting in appeal in a petition under section 34 of the Arbitration and Conciliation Act is filed to set aside the award. No valid grounds are urged to show that arbitrator has committed any misconduct or the award was against public policy. Considering the entire aspects of the matter only, the impugned order was passed dismissing the application for setting aside the award.

(3.) Argument projected before this Court by the Senior Advocate appearing for the appellant was that arbitration itself is invalid as the firm was not registered. Even though such a contention was raised in the objection filed before the arbitrator that the arbitration itself will not lie because partnership deed was not a registered one, that point was not considered by the arbitrator or District Court. Such a prayer was not seen seriously pressed or agued before the arbitrator or court. Appellant relied on section 69 of the Partnership act. Section 69 of the Partnership Act reads as follows: