P SESHAMA NAIDU Vs. P SANJEEVA NAIDU

JUDGEMENT

(1.) THE short point that arises in this revision petition is whether relief of injunction sought for by one of the partners against another restraining the latter from interfering with carrying on the business of the partnership firm by the former is a dispute that can be referred to arbitration as per the clause in the Partnership Deed agreeing to refer all disputes and questions arising between parties to arbitration. THE petitioner and respondent are partners along with three others of Vijayalakshmi Picture Palace, a firm carrying on the business of exhibiting films. Clause 18 of the deed says that "all disputes and questions arising in between the parties hereto shall be referred to arbitration by arbitrators, one to be appointed by each party for settlement". One of the partners, respondent herein, filed suit in the Court of Principal District Munsif, Srikalahasti, against another partner, who is the petitioner herein, for permanent injunction restraining the petitioner from interfering with running and management of the theatre. In the plaint he alleged that the petitioner never evinced any interest in the affairs of the firm, that he did not sign the accounts which are periodically submitted to the Income Tax Department and other tax authorities and that the petitioner has no right to demand to handover the management of the theatre to him. In Para 6 of the plaint, he states that if the defendant has got any grievance, he has to seek the help of either Court or arbitration. He also alleges that the petitioner due to family disputes and due to vengence tried to dose the theatre by locking the front gate preventing the audience from entering into the theatre on 30-6-1993. THE petitioner filed I.A.No. 279 of 1993 under Section 34 of the Arbitration Act (for short 'the Act') invoking Clause 18 of the Partnership Agreement. While the trail Court allowed the I.A., the appellate Court dismissed it upholding the contention of the respondent-plaintiff that the arbitration clause can be invoked only if there is a dispute and that it is nowhere stated in the petition for stay whether any particular dispute is in existence between the parties so that it can be referred to arbitration. Aggrieved by this, the defendant has come up in this revision.

(2.) SHRI. A. Chandraiah Naidu, learned counsel for the petitioner, submits that from the allegations in the plaint, it is clear that there is dispute between the parties regarding management of the theatre and that the lower appellate Court has erred in holding that there is no dispute to refer to arbitration. He also submits that in order to invoke arbitration clause, the dispute need not be raised by the person invoking arbitration clause and that it is enough if there is a dispute. In support of his plea, he relies on a decision of Calcutta High Court in Governor General vs. Associated Live-Stock Farm. This is opposed by the learned counsel for the respondent, Sri. P. Gangarami Reddy, relying on Hindustan Copper Ltd. vs. Assam Bearing Agencies and M/s. Vasanji Navji and Co. vs. M/s. K.P.C. Spinners.

(3.) THE learned counsel for the respondent has submitted relying on a decision of Division Bench of this Court in T. Premkumar vs. R. Anjaneyulu, that when the trial Court has taken all the relevant considerations into account in coming to the conclusion that discretion vested in it under Section 34 of the Act should not be exercised, it would be proper for the appellate court to interfere with that discretion. I am afraid, this is not at all applicable. THE question raised before the Courts below and here is a question of law viz., that as the petitioner has not raised the dispute, he cannot apply for stay. In facts, the trial Court exercised its discretion and allowed the I.A., while there was no occasion for the appellate Court to consider the case on merits. Agreeing with the decision of Calcutta High Court in Governor General vs. Associated Live-Stock Farm (1 supra), I hold that the suit is liable to be stayed.