BAN I RANI DE Vs. MINATI RANI DE

JUDGEMENT

(1.) THIS rule obtained by defendants 1-3 is directed against an appellate order passed in Miss. Appeal No. 138 of the Court of the ld. Additional District Judge, Alipore, reversing an order of stay of T. S. 90 of 1976' of the 2nd Court of Id. Subordinate Judge, alipore, u/s. 34 of the arbitration Act, 1940. Opp. parties 1 and 2 as plaintiffs instituted the aforesaid suit for dissolution of partnership and other reliefs against the petitioners and pro- forma Opp. parties 3 and 4. The case of the plaintiffs in brief may be stated thus :

(2.) BY a deed of partnership dated may 4, 1974, the plaintiffs and defendants 1,2 and 3 formed a partnership for the purpose of carrying on the business of public exhibition of cinemotograph under the name and style of M/s. Sreemati and Co. , under the said deed, the pro- forma defendant No. 4 who is the husband of defendant No. 2 was appointed as Manager of the business and defendant No. 5 who is husband of defendant No. 1 was appointed as Assistant Manager. The plaintiffs contributed Rs. 25,000/- each towards capital. They have one fifth share each in the business. Taking advantage of the appointment of pro- forma defendants 4 and 5 as manager and Asst. Manager, the defendants 1, 2 and 3 with the malafide intention of depriving the plaintiffs of their legitimate benefits out of the partnership business including the right to participate in the business completely ousted the plaintiffs from the business in breach of the terms of the partnership agreement. This, they did in conspiracy with each other being actively aided and abetted by the pro- forma defendants 4 and 5 The plaintiff then enumerates several instances of breach of terms of the partnership deed namely how the defendants kept the plaintiffs in the dark about the conduct of business, the number of persons employed, appointment of a Booking agent of their own choice without consultation with the plaintiffs with the object of making illegal gains without the knowledge of the plaintiffs, failure, to open any bank account either at the place of business or at Calcutta where the head office of the business is situate, manipulation of false balance sheets, illegally drawing more remuneration that what was agreed, misappropriation of funds by showing expenditure of huge amounts on account of purchase of machineries and tools but without production of any materials and vouchers in support of such purchases and the like. In the premises, the plaintiffs alleged that the defendants and each of them are guilty of conduct which has materially and prejudicially affected the carrying on of the business effectively in partnership. The plaintiffs therefore are entitled to a decree for dissolution of the partnership under section 44 of the Partnership Act. The prayers made in the suit are (1) a decree dissolving the partnership between the plaintiffs and the defendants 1, 2 and 3, (2) a preliminary decree directing the defendants 1, 2 and 3 to render to the plaintiffs accounts in respect of the business, (3) a final decree after such accounting, (4) Receiver, (5) an injunction and (6) such further or other relief's to which the plaintiffs may be found entitled.

(3.) DEFENDANTS 1 to 3, relying on clause 21 of the partnership agreement relating to reference of disputes to arbitration, prayed for stay of the suit under section 34 of the Arbitration Act. The relevant clause reads as follows :