MADAN MOHAN AGARWAL Vs. SURESH AGARWAL

JUDGEMENT

(1.) The dispute between partners of the firm M/s. Chaturbhujdas Vallabhdas and members of their families was referred for decision of the two Arbitrators one each appointed by the parties. The Arbitrators gave an award on 1-12-1994 which was made a rule of the Court on 1-5-1996.

(2.) The present applicant preferred an appeal against rejection of his objections to the award which was registered as M.A. No. 740/96. We decided in the Division Bench that appeal on 19-12-1996. The appeal was partly allowed and the award was remitted for reconsideration in accordance with Section 16(1)(c) of the Arbitration Act, 1940. The relevant observations and operative part of the judgment of this Court in M.A. No. 740/96 decided on 19-12-1996 are reproduced hereunder as there is variance between the parties on the effect of the decision of this Court on the award originally passed on 1-4-1994 and decree passed thereon :

(3.) In accordance with the directions made in the appeal (quoted above) the arbitrators have reconsidered the award and passed a supplementary award on 2-7-1997. In the supplementary award, decision has been rendered by the arbitrators with regard to the debts and liabilities of the partnership firm. At this stage, it is necessary to mention that instead of setting aside the award made on 2-12-1994 by the arbtirators, this Court in M.A. No. 740/96 considered it fit to remit the award under Section 161 (1)(c) of the Arbitration Act because in its opinion it contained a legal error. It has been held that the award is contrary to Sections 46 and 48 of the Partnership Act in asmuch as the arbitrators without considering the debts and liabilities of the firm apportioned the capital and investments of the partners. In the partnership, the partners are only entitled to the residue after working out the profits and loss. Holding thus, the conclusion of the Court recorded is as under :-