R RAJAGOPALACHARIAR Vs. R VENKATACHALAM

JUDGEMENT

(1.) THE plaintiff in O. S. No. 710 of 1980, Sub Court, coimbatore, is the appellant in this Civil Miscellaneous Appeal, which is directed against the order of the Court below in I. A. No. 962 of 1980 in O. S. No. 710 of 1980 filed under section 34 of the Arbitration Act, 1940 (herein after referred to as the Act) for staying the further proceedings in the suit. THE appellant, his brother, the respondent, P. Ramakrishnan and N. Rajn Naidu entered into an agreement dated 29th April, 1980, for the purpose of carrying on business in partnership under the name and style of Sri Krishna and Co. , in accordance with the terms and conditions contained therein. It is not now in dispute that the appellant is entitled to a two anna share in the firm, its business income and assets, while, the respondent is entitled to the balance. According to the case of the appellant'the firm stood dissolved on 29th april, 1980, by efflux of time and that he is entitled to a decree winding up the affairs of the partnership and also for rendition of true and proper accounts for all the assets, movables and immovables income and profits of the firm Sri Krishna and Co. , by the respondent and for payment by the respondent of the share of the appellant in alt the assets, properties movables as well as immovable and also the goodwill. In I. A. No. 262 of 1980 filed under section 34 of the Act, the respondent claimed that as per clause 15 in the partnership deed dated 29th April, 1960, in case of dispute or difference of opinion, it should be settled by reference to arbitration under the provisions of the Act and there is no right of suit available and that therefore, further proceedings in the suit should be stayed. That application was opposed by the appellant herein on the ground that the respondent was not entitled to invoke section 34 of the Act as there was no mandatory provision for arbitration in the deed of partnership compelling resort to arbitration. THE appellant also further pleaded that even assuming that there was a valid arbitration clause in the partnership deed, the claim sought to be agitated in the suit did not relate to dispute or difference of opinion between the parties and therefore would not be covered by clause 15. THE appellant put forth a plea that the right to secure a decree for the dissolution was available under the provisions of the Indian partnership Act de hors the terms of the partnership and that the taking of the accounts of a dissolved firm cannot be properly brought within the purview of a dispute between the partners. Another objection was also raised by the appellant to the effect that the respondent cannot invoke the provisions relating to arbitration in the partnership deed dated 29th April, 1980, after the partnership itself ceased to exist by efflux of time. THE appellant therefore prayed for a dismissal of the petition.

(2.) IN an additional affidavit filed, the respondent reiterated that as per clause 15 of the partnership deed dated 29th April, 1960, disputes should be settled only by arbitration and that at all material times when the proceedings were commenced and even on the date when the application under section 34 of the Act was filed, the respondent was ready and willing to do all things necessary for the proper condut of the arbitration. The respondent also filed a reply statement to the effect that the relief claimed related to a period when the partnership was in force and disputes arose between the parties and plainly therefore, such a dispute ought to be settled only by reference to arbitration and not by the institution of a suit. The respondent further maintained that the partnership continued in spite of the dissolution of the partnership by efflux of time and that till such time as the affairs of the firm are finally wound up, it would be open to the parties thereto to rely upon the arbitration clause.

(3.) IN the light of the above claim made in the suit by the appellant and the terms of Exhibit B-l the question that arises for consideration in this appeal is whether the Court below was justified in staying further proceedings in the suit. Mr. T. Raghavan, learned counsel far the appellant, contended that clause 15 in Exhibit B-1 does not amount to an arbitration clause at all as it is vague and indefinite and therefore, cannot be taken advantage of by the respondent for filing an application under section 34 of the Act. Elaborating this argument, the learned counsel, stated that what is contemplated by clause 15 is more than one arbitrator; but how many have to act as such has not been mentioned at all and that this would be contrary to the provisions of section 3 read with Schedule I.