GULABCHAND GAMBHIRMAL Vs. KUDILAL GOVINDRAM

JUDGEMENT

(1.) THIS appeal by the plaintiff is from a judgment and decree of a Division Bench of the Madhya Bharat High Court dated 2nd December 1948. It was filed in the madhya Bharat High Court under Section 25 of the Madhya Bharat High Court of judicature Act 1949 as it stood before it was amended by Madhaya Bharat Act No. 3 of 1950.

(2.) THE suit out of which this appeal arises was instituted on 6th November 1947 by gulabchand Tongya against the heirs and legal representatives of Govindram seksaria on the Original Side of the High Court of the former Indore State for specific performance of an agreement whereby, it is said, Govindram Seksaria agreed to sell to the appellant his share in a firm the business of which was to act as managing agents of the Indore Malwa United Mills Ltd. , Indore. The suit was tried by Sanghi J. , who on 11th June 1948 made a decree in favour of the plaintiff directing that on payment by the plaintiff to the defendant of 5/32 of the capital deed of assigning a two and a half anna share in a rupee out of their share in the aforesaid partnership and declaring that

(3.) THE facts giving rise to this appeal are these. Govindram Seksaria, Brijlal ramjidas, Balasari Ju-harmal and four other persons entered into a deed of partnership (Ex. No. 1, Part-I, Page-23 of the printed Paper-Book) on 17th July 1935 for carrying on the business of "acting as managing agents and selling agents of the Indore Malwa United Mills, Ltd. ," a company owning a textile mill in indore. Towards the end of 1940 serious disputes arose between two groups of partners one headed by Govindram Seksaria and another by Brijlal and Bi-lasrai, which it appears became a subject-matter of public discussion, leaflets, pamphlets, propaganda and counter-propaganda. On 21-11-1940, the Board of Directors of the Malwa Mills appointed a committee to enquire into certain allegations against govindram Seksaria, Brijlal and Bilasrai. The committee consisted of Mr. R. C. Jail as Chairman, and Seth Hiralal and the plaintiff Gulabchand as members. The disputes between the part-ners continued and came to a head. The groups continued and it became apparent that nothing short of retirement of one of the groups would end the trouble. The partners then referred their differences to the arbitration of Col. Dinanath, the Prime Minister of the former Holkar State. On 8-2-1941, the arbitrator made an award deciding that Govindram Seksaria should buy up the five annas share of Brijilal Ramjidas and Bilsrai Juharmal at par and that the latter should sell their respective shares of annas two and a half each in the rupee at par and also sell the debentures held by them to Govindram seksaria at par. The award further provided that the outgoing partners in the managing agency would be entitled to the managing agency and selling agency commission and also interest on their invested capital excluding the debentures till the day of payment of the invested capital which was to be paid within one month; and further that the outgoing partners would be liable for all acts or defaults which they might have previously committed as members of the manag-ging agency of the Indore Malwa united Mills. On 12th February 1941 Brijlal and Bilasrai instituted a suit in the Bombay High court against Govindram and other partners of the Managing agency contesting the validity of the award made by Col. Dinanath and asking for a declaration that the award was invalid and that they continued to be the partners in the firm, and for consequential relief. On 25th February 1941, Govindram Seksaria made an application to the District court at Indore for the award being filed. That application was subsequently transferred to the Indore High Court and the award was upheld and made a rule of the Court by a learned Judge of the Indore High Court on 29th October 1941. The suit instituted in the Bombay High Court was dismissed by Chagla J. (as he then was) on the ground that the real substance of the dispute between the parties had been determined by a decision of the Indore High Court upholding the award which was binding between the parties in the suit before him under Section 13 C. P. C. The decision of the learned Single Judge was upheld in appeal by a division Bench of the Bombay High Court and ultimately also by the Privy Council on 2nd July 1947.