RAJKISHORE GURU PRASAD KHATRI Vs. JWALA PRASAD BHIMRAJ

JUDGEMENT

(1.) THIS appeal by the defendants is directed against an order of the Additional District Judge, Satna, dated 8th September 1971, rejecting their application for stay of the proceedings in suit, under section 34 of the Arbitration Act.

(2.) SHORTLY stated, the facts are that the plaintiff brought the suit for dissolution of partnership and rendition of accounts of the firm styled, "m/s Om builders and Miners" Satna, constituted under the deed of partnership dated 29th October 1966. In the plaint, the plaintiff has levelled various charges of fraud, misappropriation of fund and other acts of misconduct against the defendants, seeking a dissolution of the firm on the ground that it was just and equitable under section 44 (f) and (g) of the Partnership Act. It was alleged that due to the acts of malfeasance and misfeasance on the part of the defendants, as pleaded, the business of the partnership had come to a stand still and, indeed, could not be continued except at a loss.

(3.) IN their application under section 34 of the Act, the defendants sought stay of the proceedings on the ground that under the arbitration clause, the arbitrators had power to decide whether or not the partnership should be dissolved, and to settle the accounts upon its dissolution and, therefore, the disputes which had arisen, including those which carried such charges of misconduct as had been made, should be decided by the domestic forum which the parties had chosen and, therefore, the proceedings in suit ought to be stayed. Incidently, the defendants, in their application, also joined issue on the various allegations made against them.