MULCHAND DOSHI Vs. DALAM CHAND BENGANI

JUDGEMENT

(1.) DISPUTES and differences arose between Khin Karan Doshi, Dhanraj Doshi, Mulchand Doshi and Dalam Chand Bengani, the four partners of the firm of Novelty Engineering Works. There was an agreement to refer the disputes to the arbitration on the 7th Aug. 1974. The said disputes were, accordingly, referred to the arbitration of two arbitrators and they appointed on the 8th August, 1974 one Umpire. The joint arbitrators having failed to arrive at a unanimous decision, referred the matter to the Umpire. The Umpire on the 5th of December, 1974 wrote to the parties and held sittings. There was a meeting on the 7th of December, 1974. This meeting is recited in the award. The minutes of the meeting were signed by the parties. On the 20th of December, 1974 another meeting was held by the Umpire when all the parties were present and by consent of all the parties M/s. Fulchand Manmal, a firm, which was a creditor of the partnership firm in question, was added as a party to the reference. The said minutes were also signed by all the parties. On the 3lst of December, 1974 an award was made by the Umpire. The said award was signed by all the parties as well as by Fulchand Manmal. The award is important for the purpose of examining the contentions of the partners. The award after reciting the facts and circumstances of this case, inter alia, provided as follows: -- "1. I Award that Dalamchand Bengani will retire on and from the 31st day of December, 1974 from the business of Messrs. Novelty Engineering Works and will be paid a sum of Rs. 1, 708-74 p. (Rupees One Thousand Seven Hundred Eight and paise Seventy-four) towards his capital and share in the partnership business by the continuing partners in full and final settlement of all his claim. I further Award that a sum of Rs. 1,66,000/-(Rupees One Lac and Sixty-six Thousand), which is lying credited to the firm of M/s. Fulchand Manmal which amount was procured by Shri Dalamchand Bengani for the purpose of the business of Novelty Engineering Works would be paid back by the said firm Novelty Engineering Works and the continuing partners Shri K.K. Doshi, Shri M.C. Doshi and Shri D.R. Doshi for which they have executed a Promissory Note of date in favour of the said Messrs. Fulchand Manmall and the said amount will be repaid by them with interest at the rate of 12% per annum payable every month till the entire amount is paid off. The said entire amount with the interest has been agreed to be repaid by the continuing partners in the following instalments to the said Messrs- Fulchand Manmall :-- Rs. 41,500/- on or before the 31st December, 1975; Rs. 41,500/- on or before the 31st December, 1976; Rs. 41,500/- on or before the 31st December, 1977; Rs. 41,500/- on or before the 31st December; 1978; 2. That the said sum of Rs. 1,66,000/-payable to Messrs. Ful Chand Manmall will form a charge on the assets and machineries of Messrs. Novelty Engineering Works, which are at present valued at Rs. 4,00,000/- (Rupees Four Lacs) approximately and the same shall be deemed to be charged for payment of Rs. 1,66,000/-with interest, but for the purpose of their business the continuing partners shall be entitled to create charge with any Bank or financial institution. A list of assets and machineries are shown in the Schedule hereunder written and the said continuing partners will not do or cause to be done any act whereby the security is in any way impaired and/or jeopardised and/or reduced. In default of payment of any instalment the said Messrs. Fulchand Manmall may take steps for realisation of the money in any manner they may like. 3. That upon payment of the dues of Sri Dalamchand Bengani, he will cease to be partner and will sign the necessary Deed of Retirement and will also cease to have any right, title and interest of any nature whatsoever in the partnership assets and properties. 4. THat the continuing partners will share profit and losses in future in equal shares. 5. That the continuing partners shall be entitled to all licences, tenancy rights, quota rights, benefits of pending contracts, book-debts and good-will, telephone connections, machineries, stock, furnaces, sheds etc. of the said business as going concern. 6. That the continuing partners shall bear and pay all the liabilities statutory or otherwise arising out of all or any of the transactions done or otherwise upto the date of retirement, of Dalamchand Bengani and shall keep the said Dalamchand Bengani indemnified against any claim or demand in respect thereof and/or arising therefrom. 7. That each of the partners shall bear and pay their respective income-tax liabilities."

(2.) THEREAFTER the Umpire wrote on the 31st of December. 1974 to all the parties including Fulchand Manmall informing them that he had made the award. In implementation of the award on the same day a promissory note of Rs. 1,66,000/'-was executed on the 31st of December. 1974 by Khin Karan Doshi. Dhanraj Doshi, and Mulchand Doshi in favour of Dalam Chand Bengani by way of security for the payment of the sum of Rs. 1,66,000/- by the firm of Novelty Engineering Works to Fulchand Manmall. On the 6th of May, 1976 notice of the filing the award was served on all the parties. THEREAFTER, an application was made on the 23rd of June, 1976 by Khin Karan Doshi and another for setting aside of the award. It was contended, inter alia in the said application that the award purported to create, declare or assign or limit or extinguish the right, title or interest of the parties in the immoveable properties of the value of more than Rs. 100/- and, therefore, the award required registration. It was submitted that the award being unregistered was bad and a nullity and, therefore, should not be given effect to and should be set aside. I rejected the said contentions on the grounds inter alia, that there was no necessary averment to indicate that the award in question dealt with the rights of the parties in immoveable properties of the value of more than Rs. 100/-. I held that in this case this contention involved mixed questions of law and facts and in the absence of necessary averments it was not possible to go into that question in that application. I, further, held that so far as interest and rights are concerned, on the retirement of a partner the other two partners became entitled to the share of the outgoing partner. Therefore, from that point of view, in my opinion, it did not require registration Accordingly the application was dismissed by me and judgment in accordance with the award was passed.

(3.) IN these circumstances, Mulchand Doshi has made this application for determination of the validity, effect and admissibility of the award dated the 31st of December, 1974 and the judgment and decree passed on the 23rd of March. 1977 and for a declaration that the award was inadmissible for want of registration and accordingly the decree was void and for other consequential reliefs.