CHANDULAL HATHIBHAI SHAH Vs. CHAMPAKLAL AMBALAL PARIKH

JUDGEMENT

(1.) THE appellant and the respondent entered into a Deed of Partnership dated 1-1-1979 under which they agreed to carry on business in yarn and as commission agents in partnership in the firm name and style of M/s. C. H. Shah and Co. The partnership, however, is not registered. A recital in the Parthership Deed states that the respondent was a tenant of business premises situate at Room No. 29, 152/2 Narayan Dhuru Street, Bombay 400 003. Clause 5 of the Partnership Deed provides that the partnership business was to be conducted in the said premises. Clause 29 of the Partnership Deed provides that any dispute or question which may arise in connection with the business of the said partnership or any matter connected with it shall, unless decided by mutual agreement by the parties, be referred to arbitration of arbitrators, one to be appointed by each party to the dispute.

(2.) SINCE about July, 1981 there were disputes between the parties. According to the respondent, from 20th July, 1981 onwards the Appellant prevented the respondent from entering the said premises. The respondent thereupon gave a notice of dissolution on 1-1-1981. The respondent thereafter filed in this Court Arbitration Petition No. 1455 of 1981 under section 20 of the Arbitration Act praying : (a) that the arbitration agreement contained in the Deed of Partnership dated 1st January, 1979 be ordered to be filed in this Court and (b) that this Court be pleased to make an order of reference to the arbitrator to be appointed by the parties failing which to the arbitrator to be appointed by this Court and costs of the petition. This petition has been allowed by a learned Single Judge of this Court by his judgment and order dated 2nd February, 1988. The appellant has filed the present appeal from the above judgment.

(3.) THE question is whether a petition under section 20 of the Arbitration Act is a proceeding to enforce a right arising from a contract as between the two partners of an admittedly unregistered firm. The arbitration clause is a part of the contract between the partners embodied in the Partnership Deed. A petition under section 20 of the Arbitration Act which is taken out by the respondent, is clearly to enforce this arbitration clause in the Partnership Deed. The only prayers in the proceedings are for a declaration that the arbitration agreement contained in Clause 29 be filed and a reference be made to arbitration accordingly. Therefore, these proceedings will have to be considered as proceedings to enforce a right arising from a contract which is sought to be enforced by one partner against another. Since the partnership is unregistered, such a petition cannot be filled.