ASANDAS MITHARAM NARSINGHANI Vs. TEKCHAND MITHARAM SEVAKRAMANI

JUDGEMENT

(1.) This appeal is filed against an order passed by the Second Joint Civil Judge (Senior Division), Palanpur on 20/12/1986 in Special Civil Suit No. 34 of 1984. By the said order, the award passed by the sole arbitrator was set aside by the learned Judge on the ground of misconduct and/or being otherwise invalid.

(2.) Few relevant facts relating to the present litigation may now be stated : The first respondent is original plaintiff, who filed Special Civil Suit No. 14 of 1982 in the Court of the Civil Judge (Senior Division), Palanpur for winding up dissolved partnership firm and for taking accounts. It was contested by the defendants. Pending the trial, Purshis Exh. 181 and 184 were jointly filed by the parties requesting the Court to appoint one Shri N. T. Bachani as the sole arbitrator. The Court passed an order appointing Shri Bachani as sole arbitrator who submitted the award on 20/06/1984 which was registered as Special Civil Suit No. 34 of 1984. Notices were issued to the parties and they were called upon to file objections if any, against the award. Article 119(b) of the Limitation Act, 1963 provides a period of 30 days for setting aside an award from the date of service of the notices of filing of an award. Pursuant to the notice, objections were raised mainly by the first respondent by filing objections at Exh. 14. Initially, it was contended on behalf of the appellants before the trial Court that no application could be said to have been made in accordance with the provisions of Sec. 30 of the Arbitration Act, 1940, (hereinafter referred to as the "Arbitration Act") for setting aside the award, however, in view of the decision of the Hon'ble Supreme Court in the case of Madan Lal v. Sunder Lal, reported in AIR 1967 SC 1223, that objection was given up. In Madan Lal's case (supra), the Hon'ble Supreme Court held that no special form of application for setting aside an award made by an Arbitrator has been prescribed by the Act and if a party wants to get an award set aside on any of the grounds mentioned in Sec. 30, it can apply within 30 days of the date of service of notice of filing of the award as provided in Art. 119. Such application need not be a regular application in any set form, and in an appropriate case, an objection to award in the nature of a written statement can also be treated as application against the award, if it is filed within the period of limitation. In view of that settled legal position, Exh. 14 was treated as application as contemplated by Sec. 30 of the Act and the Court proceeded to decide it on merits.

(3.) The main point raised in the objection was regarding interpretation and ambit and scope of Sec. 48 of the Indian Partnership Act, 1932 (hereinafter referred to as the "Partnership Act"). Chapter VI of the Partnership Act provides for dissolution of a firm. After dissolution of a firm, rights and liabilities of the partners inter se as well as of third parties are required to be determined in accordance with law. Section 46 empowers every partners or his representative on dissolution of a firm to have the business wound up after the dissolution of the firm. It also empowers all partners or their representatives to have the property of the firm applied in payment of debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights. Section 48 provides mode of settlement of accounts between partners and is material for the purpose of controversy raised in the present litigation and therefore, requires to be reproduced in exfenso.