N RADHAKRISHNAN Vs. MASTERO ENGINEERS A PARTNERSHIP FIRM

JUDGEMENT

(1.) AS against the dismissal of the Interlocutory Application to refer the matter to Arbitral Tribunal, this CRP has been preferred by the defendant.

(2.) THE suit has been filed by the respondents/plaintiffs against the revision petitioner/defendant for a declaration declaring that the petitioner is not a partner of the first respondent firm with effect from 18. 11. 2005 and for consequential injunction restraining the petitioner from disturbing the smooth functioning of the first respondent firm. Admittedly there was estrangement between the partners as to the running of the partnership firm. According to the respondents, the revision petitioner did not concentrate much on the business and administration of the first respondent's partnership firm but he has been concentrating much on his family business run under the name and style of M/ s. Qawn Knitting. Since the revision petitioner wrote to the Banks about the possible expulsion as partner from the said firm, the Banks stopped to honour the cheques issued by the firm which resulted in standstill of the financial activities of the firm. In fact the revision petitioner sent a notice to the firm expressing his willingness to retire from the firm on settled the profit, share arrears and interest with the capital paid to him. Accepting his offer, the respondents instructed the Auditor to close and settle the accounts of the petitioner as on 18. 11. 2005 and prepare the retirement deeds. But the revision petitioner did not meet the Firm's auditor and executed the retirement documents. THErefore, the respondents entered into a fresh partnership deed with effect from 19. 11. 2005 and a public notice thereof was also published in one of the Tamil Daily. According to the respondents 2 to 4 even thereafter, the revision petitioner had been disturbing the smooth administration of the first respondent firm and therefore they filed the suit.

(3.) A reading of the Clause 15 of the Partnership Deed itself would show that if any difference of opinion arises among the partners during the continuance of the partnership business or termination thereof, such a difference or dispute shall be settled by Sole Arbitrator, if the partners agrees thereof, and this would only mean that consensus of all the partners is a necessary one to refer the matter for arbitration. In the present case, only on 24. 2. 2006 the revision petitioner has expressed his willingness to go for arbitration to resolve the issue i. e. , much after the filing of the suit and his written statement to the suit. By that time even the revision petitioner has been expelled from the partnership and the respondents 2 to 4 have reconstituted the partnership firm by entering into a fresh partnership deed as on 19. 11. 2005. Thus it is clear that the revision petitioner has not expressed his willingness to opt for arbitration at the earliest point of time, but only chosen to refer the matter after his expulsion from the firm and filing the written statement to the Plaint filed by the respondents.