RAJENDRA J JOSHI Vs. DILIP J JOSHI

JUDGEMENT

(1.) BY this petition filed under section 34 of the Arbitration Act, the petitioner challenges the award of sole arbitrator dated 3-5-1999. The petitioner and the respondents are partners of the firm Engineers Combine. The petitioner and the respondents are brothers. As the dispute arose between the parties, an arbitrator who is the father of the petitioner and the respondents was appointed to resolve the dispute between the parties. What was referred to the sole arbitrator was the differences and disputes between the partners. The petitioner had sought dissolution of the firm and accounts and payment to him of his share in the firm. By the award, the arbitrator rejected the prayers for dissolution, however, directed that the petitioner be retired as a partner of the firm with effect from 28-2-1999. The arbitrator took into consideration the profit of another business carried on by the petitioner under the name and style of "tejal Engineering Works" and treated those profits as profits of the firm and on valuation of the petitioners share in the firm, the arbitrator directed that the petitioner should pay to the firm an amount of Rs. 1,39,400/ -. The arbitrator found that certain amounts were due from the firm to the respondent No. 3 and to one Dave Group. By the award it was directed that the partners should sell some of its immoveable properties to pay the amounts to the respondent No. 3 and Dave Group.

(2.) THE learned Counsel for the petitioner challenged the award on several grounds. The first ground on which the award has been challenged is that the directions contained in the award for retirement of the petitioner is illegal and was beyond the power of the arbitrator. He submitted that as per the provision of Clause 24 of the Partnership Deed, a partner can retire by giving 90 days notice of retirement to the other partners. The learned Counsel submits that though it is true that the petitioner had addressed a letter dated 3rd October, 1998 to the arbitrator, wherein he has expressed his desire to retire, the petitioner subsequently filed his submission before the arbitrator, where he did not claim to be retired but instead he insisted on dissolution of the firm. According to the learned Counsel, therefore, the direction in the award is clearly illegal. The learned Counsel also submits that even if the letter dated 3rd October, 1998 is taken to be a notice of retirement, it could have been made effective from the date on which the period of 90 days expired. However, instead, the arbitrator has chosen an arbitrary date for retirement of the petitioner namely 28-2-1999. The learned Counsel further submits that the arbitrator had no authority in law to direct the retirement of the petitioner.

(3.) ON behalf of the respondent it was contended, that in view of the letter of the petitioner addressed to the arbitrator dated 3rd October, 1998 where he had expressed his desire to retire, the arbitrator was perfectly justified in directing the retirement of the petitioner.