SAMBHU NATH RAMESHCHANDRA SARCAR Vs. SURENDRA MANILAL JHAVERI

JUDGEMENT

(1.) THIS is a Notice of Motion taken out by the defendant for stay of the suit under Section 34 of the Arbitration Act, 1940. This Motion is resisted by the plaintiff on three grounds, namely, (1) that the affidavit in support of this Notice of Motion does not contain the necessary averments and, therefore, the Motion is not maintainable on the ground that it does not make out any case entitling the defendant to obtain stay of the suit, (2) the defendant was not ready and willing at the date when the suit was filed to do all things necessary to the proper conduct of the arbitration, and (3) after the filing of the suit the defendant has not been ready and willing and has not remained ready and willing to do all things necessary to the proper conduct of the arbitration.

(2.) IN order to understand these contentions it is necessary to set out a few facts and dates. The plaintiff and the defendant entered into a partnership agreement on March 13, 1970 under which the partnership was deemed to have commenced from January 1, 1970 and was to be a partnership at will. Clause 27 of the said partnership agreement is the arbitration clause and is in the following terms: 27. If during the continuation of the said partnership or at any time afterwards any difference shall arise between the said partners or between any of them and the heirs, executors or administrators of the other partner or between their respective heirs, executors or administrators in regard to the construction or meaning of any of the terms and conditions herein contained or as to any division, act or thing to be made or done or omitted to be done in pursuance hereof as to any matter or thing relating to the said partnership or the affairs thereof, such difference shall be referred to the arbitration of two arbitrators, one to. be appointed by each party in difference (whether consisting of one or more person or persons), and in case of the said arbitrators being equally divided in their opinion, to an Umpire appointed by the said arbitrators before their entering on the consideration of the matter referred to them or in case of their default by the said parties in difference. The decision of the said arbitrators or the said Umpire (as the case may be) shall be binding upon all the parties. By his attorneys' letter dated March 23, 1976 addressed to the plaintiff, the defendant, after making certain charges against the plaintiff, stated that by the said letter he was giving to the plaintiff notice dissolving the said partnership with effect from the midnight of March 31, 1976. The last three paragraphs of the said letter stated as follows: Our client is getting the accounts of the partnership made up for the last year, i.e. upto 31st December, 1975, and also getting the accounts of the partnership made up upto 31st day of March, 1976, the date on which the partnership shall stand dissolved and the same is expected to be ready soon. We are instructed by our client to request you to come down to Bombay at as early a date as possible so that the accounts of the partnership may be made up and the affairs of the partnership be wound up to the mutual satisfaction of the parties in accordance with law and the partnership agreement. Please treat this as a notice of dissolution of the partnership.

(3.) WHEN this Notice of Motion first reached hearing before me on August 18, 1976, an application was made on behalf of the plaintiff for leave to file a further affidavit in reply in view of the facts which had transpired subsequent to the taking out of the Notice of Motion and which I have recited above. The Motion was thereupon adjourned to August 20, 1976 and the leave asked for granted to the plaintiff. The plaintiff thereupon filed a further affidavit in reply made by the plaintiff's constituted attorney Dinesh Shantilal Bhat and affirmed on August 11, 1976. In this affidavit in reply, after referring to the said exchange of letters between the attorneys of the parties about the adjournment of the suit by consent and the said consent adjournment, it was contended that by his act in asking for time to file the written -statement the defendant should be deemed to have abandoned the enforcement of the arbitration agreement and that the Notice of Motion had become infructuous.