M PALANIAPPAN Vs. A AMSAVENI AMMAL

JUDGEMENT

(1.) The first defendant in O.S. No. 572 of 1979, Sub-Court, Coimbatore. is the appellant in this Civil Miscellaneous Appeal, which is directed against the order of the Court below dismissing an application filed by the appellant under section 34 of the Indian Arbitration Act, 1940 (hereinafter referred to as the Act) praying for a stay of the suit. The respondents herein instituted that suit for dissolution of the partnership firm M/s. Balasubramania Foundry in which the appellant., the respondents and others are partners and for other consequential reliefs. The partnership came into existence under the terms of the agreement dated 25th November, 1971. Inter alia, clause 14 of the agreement provided that "all disputes and questions in connection with the partnership or this deed, arising between the partners or between any one of them and their legal representatives and whether during or after the cessation of the partnership shall be referred to arbitration under the Indian Arbitration Act". Alleging that the claim made in the plaint related to disputes contemplated by the aforesaid clause and therefore, referable to arbitration and that the suit had been filed by the respondents in violation of clause (14) of the partnership agreement, the appellant invoked section 34 of the Act for a stay of the suit.

(2.) That application was resisted by the respondents herein on the ground that even before the institution of the suit on 24th April, 1979. notices had been sent to the appellant and the appellant did not accept the request of the respondents for arbitration and consequently, the appellant had lost the right to compel the respondents to resort to arbitration for resolving their disputes. In addition, the respondents also put forth the objection that the appellant had taken part in the proceedings by opposing the application for the appointment of a Commissioner and therefore, lost his right to rely upon and invoke section 34 of the Act. On these grounds, the respondents prayed for the dismissal of the application.

(3.) The learned Subordinate Judge, Coimbatore, who enquired into the application, after referring to the notices, held that the appellant declined to refer the matter to arbitration earlier and therefore, he cannot turn round and say that he is entitled to invoke section 34 of the Act. It was also further held that the appellant had participated in the proceedings in T.A. No. 459 of 1979 on 27th April, 1979 and took time for counter and therefore, had taken a step in the proceedings and thus became disentitled to invoke the provisions of section 34 of the Act. On these conclusions, the Court below dismissed the petition. It is the correctness of this order that is challenged in this Civil Miscellaneous Appeal.