DEVIRAM SINGHAL Vs. MANJEET SINGH DUGGAL

JUDGEMENT

(1.) Heard Sri Navin Sinha, learned Senior Counsel assisted by Sri Utkarsh Srivastava, counsel for the appellants and Sri Syed Safdar Ali Kazmi, learned counsel for the respondents.

(2.) Brief facts of the case are, that the parties herein had entered into a partnership agreement on 1/4/1997 with the intention to construct a hotel and run the same in the partnership. It was decided that the business would be carried out in a partnership which would run the hotel, bar and restaurant in Agra and the head office of this business would be at E-14, Kailash Colony at New Delhi. This arrangement was such where the claimant (respondents herein) would invest the capital, and the appellants (herein) would be a working partner and would be responsible for running the business, maintaining the accounts and handle the situation which arises in the ordinary course of business. During the construction of hotel the claimant not only provided sufficient fund for construction and for running the hotel, but also gave a personal loan of Rs.20.00 lakh to the appellants. The construction was completed in December 1999. After opening and till July 2002, the hotel ran well and made a profit. After July, 2002, the appellants (herein) turned dishonest and stopped paying the profit to the respondents on the pretext that the business was running in loss. He did not allow the respondents to inspect the accounts. Since the hotel was located at the prime location, hence, the occupancy was very high. After February 2003, the appellants stopped the respondents from entering into the property the hotel.

(3.) In the agreement there was an arbitration clause which provided for arbitration in case of dispute between the parties which is reproduced herein under:-