YASMIN KHALIQUE Vs. MUKHTAR ALAM

JUDGEMENT

(1.) This application is for setting aside of an interim Award dated 12th November, 2020 passed by a learned Sole Arbitrator by which a Deed of Partnership dated 1st April, 2006 of the petitioner no. 3, partnership firm was declared to be a Partnership at Will and the partnership firm was further declared dissolved consequent to a notice dated 17th November, 2018 issued by the respondent Award-holder under the provisions of the Indian Partnership Act, 1932 (the Act). The petitioner, who seeks setting aside of the Award, was the claimant before the learned Arbitrator.

(2.) The ground of challenge to the impugned Award is that the Deed of Partnership dated 1st April, 2006 is not a Partnership at Will and that the impugned Award is perverse and is patently illegal. It is also the contention of the petitioners that the notice dated 17th November, 2018 for dissolution of the partnership firm (petitioner no. 3 herein) invalidated the orders of injunction passed by this court against the respondent. The petitioner has also challenged the imposition of costs of Rs. 10 lakhs as being exorbitant and perverse.

(3.) Mr. Shyamal Sarkar, learned Senior Counsel appearing for the petitioners/Award-debtors, submits that the arbitrator's finding on the issue of bad faith in the context of the origin of the business and use of the trademark MUSA KA GUL was outside the scope of the reference amounting to an error of jurisdiction. Counsel submits that there was no evidence to support the said finding of the Arbitrator and that the finding was at the 'invitation' of the respondent, which deprived the petitioners of an opportunity to assail the said finding. Counsel further challenges the finding that Clause 3 of the Deed of Partnership would remain intact and unaffected by Clauses 13 and 14 which deal with a partner's right to retirement and the consequences following the death of a partner, respectively. Counsel submits that the Arbitrator failed to identify the correct clauses of the contract and therefore failed to arrive at a harmonious construction of the clauses as well as the intention of the parties. Counsel seeks to place emphasis on the fact that where the Partnership Deed contained a provision for retirement of a partner, the partnership cannot be a partnership at will and hence a notice of dissolution would merely act as a notice of retirement and not as a notice for the purpose of dissolution of the partnership firm. Counsel stresses on the bad faith angle to the notice in view of the fact that the notice is against orders of injunction passed by this court. Counsel relies on a passage from Pollock and Mulla on the Law of Partnership (8th Edition) to the effect that the intention to dissolve a firm may be inferred from circumstances showing that the partner has, in fact, abandoned his interest in the business and that the inference may be made from the facts of each case as to whether a partner's interest in the partnership firm has been abandoned or not. Counsel submits that the facts of the case clearly show that the respondent has not abandoned his interest in the partnership business even after notice of dissolution and that the respondent has waived the effect of the notice of dissolution by continuing with the business of the partnership firm.