M H TEJANI Vs. KULSUMBAI M JETHA

JUDGEMENT

(1.) THE appellant-original respondent and the respondent-original petitioner agreed by an indenture of the 15th of July 1954 to carry on in partnership the buiness of commission agents in machinery, plants and other articles. That partnership was for a period of five years. The partnership was disolved by the respondent by a notice of the 7th of June 1959 with effect from the 14th of July 1959. clause 13 of the partnership agreement provided for arbitration of the disputes between the parties. By a letter dated the 22nd of january 1960 the respondent appointed Mr, B. J. Kapadia as her arbitrator. On the 16th of February 1960 the appellant wrote to the respondent saying that Mr. M. J. Gordhandas was appointed as his arbitrator. After these arbitrators were appointed, nothing seems to have happened with reference to the arbitration proceedings till the 25th of July 1963, on which date the respondent filed the petition in the Bombay City Civil Court praying, inter alia (a) that the arbitration between the appellant and the respondent before Mr. B. J. Kapadia and Mr. M. J. Gordhandas should be declared to have become infructuous and to have come to an end; (b) that the said arbitrators be removed; (c) that in the alternative, the authority of the arbitrators to continue or proceed with the reference should be revoked and/or that the Court should grant leave to the respondent to revoke that authority; and (d) for an order that the said arbitration had ceased to have effect with respect to the differences and disputes between the appellant and the respondent arising out of and/or in relation to the said partnership. Alternatively, the petition also prayed for the relief that the differences and disputes between the parties arising out of and/or in relation to the said partnership be referred to the arbitration of an arbitrator to be appointed by the Court. This petition filed by the respondent was contested by the appellant on various grounds. The learned judge in substance allowed the petition and made an order in terms of prayers (a), (c) and (d) of the petition. As pointed out, prayer (a) asked for a declaration that the arbitration had become infructuous and had come to an end. Clause (c) prayed that the Court should revoke the authority of the arbitrators to continue or proceed with reference and/or give leave to the respondent to revoke that authority. Clause (d) prayed for an order that the arbitration agreement of the 15th of July 1954 had ceased o have effect with respect to the differences and disputes arising out of and /or in relation to the said partnership. The present appeal is by the original respondent challenging that order of the learned Judge of the City Civil Court.

(2.) IN the petition, the respondent (hereinafter referred to as the petitioner) stated that her father-in-law Hashambhoy Jetha had intervened in the dispute and had sought to settle the matter, as the appellant (hereinafter referred to as the respondent) was the brother-in-law of the petitioner's husband. It was stated that the petitioner's father-in-law has assured the petitioner that the matter would be settled and so the arbitration was not necessary. These efforts of the father-in-law of the petitioner, however, did not succeed. According to the petitioner, her brother-in-law. Akbar Jetha mediated but it was of no avail. After both these efforts for mediation had failed, the petitioner had requested the respondent to excute a formal agreement of reference to arbitration so that the arbitration could proceed, but the respondent avoided doing so on one pretext or the other. Reference was made to a letter of 18th February 1963 written by the Advocate of the petitioner to the respondent, in which it was stated as follows:-

(3.) THE learned Judge, in granting the reliefs as prayed for in clauses (a), (c) and (d), principally considered the effect of sub-s (5) of S. 37 of the Arbitration Act, which provides for the exclusion of the period between the commencement of the arbitration and the date on which the Court had ordered that the award be set aside or that the arbitration agreement shall cease to have effect with respect to the difference referred. The period of limitation under Art. 106 of the Indian Limitation Act, 1908, for a suit for an account and a share of the profits of a dissolved partnership is three years and the time from which the period beings to run is the date of the dissolution. IN this case the partnership dissolved with effect from the 14th of July 1959 and, if Art, 106 applied, the period of limitation for filing a regular civil suit had no doubt come to an end. Under sub-s (5) of S. 37 of the Arbitration Act only an order that an award be set aside or an order that the arbitration agreement shall cease to have effect with respect to the difference referred, could enable the petitioner to claim exclusion of the period as provided therein. The order of the learned Judge shows that the fact that the suit was otherwise barred under the Indian Limitation Act considerably weighed with him in making the order as prayed for in clauses (a), (c) and (d ). There is no discussion in the judgment on the merits of the application as to whether a case had been made out by the petitioner for leave to revoke the appointment of arbitrators and for an order that the arbitration agreement shall cease to have effect. Mr. Amin's principal objection to the order of he learned Judge, therefore, was that he ignored the main requirements of the Arbitration Act before making the order that the appointments of the arbitrators should be allowed to be revoked and that the arbitration agreement should cease to have effect. Before, however, I deal with the contentions made by Mr. Amin, it would be necessary to consider a preliminary objection raised by Mr. Paranjape, learned advocate for the petitioner, to the maintainability of the appeal itself.