CHHOTE LAL Vs. U P STATE ELECTRICITY BOARD

JUDGEMENT

(1.) This is an appeal against an order rejecting the application under S.20 of the Arbitration Act, 1940 on the ground that the alleged dispute was not covered by the Arbitration clause and that the appellant was not competent to maintain the proceeding.

(2.) In order to have a clear picture of the situation it is necessary to have a few background facts. The appellant along with one Ashok Kumar was carrying on partnership business in the name of M/s. Supreme Traders. On 17-2-1974 the said partnership entered into a building contract with the respondent. However, it is alleged that Ashok Kumar transferred his share in the partnership to the plaintiff Chhote Lal. A suit was filed by him against Ashok Kumar seeking declaration of his rights and on 3-11-1986, the Civil Court declared that the appellant was the sole proprietor of the firm Supreme Traders. Subsequent to it, the present proceedings under Section 20 of the Arbitration Act were initiated for referring the dispute to arbitration. The basis of the application was that although the plaintiff had executed the work of the value of Rs. 1,69,092-62 he was only paid a sum of Rs. 1,46,000/- and thus a sum of Rs. 23,092-62 remained unpaid. It is this amount along with security amount of Rs. 16,000/- and some other claims which the appellant claimed from the defendant for which he wanted the dispute to be referred to arbitration.

(3.) The claim was contested by the respondent and was mainly pleaded that the partnership firm which had entered into the building contract being unregistered, the plaintiff was not entitled to claim any amount as the suit was barred under Section 69(2) of the Indian Partnership Act. It was also contended that the dispute sought to be referred to arbitration was not covered by the arbitration clause.