MANOJ KUMAR BHAGAT Vs. HIRALAL PANDEY

JUDGEMENT

(1.) The Court : This application under Section 34 of the Arbitration and Conciliation Act , 1996 has been filed by the respondent in an arbitration proceeding. On April 24, 2019 the sole Arbitrator published the arbitral Award. The petitioners are aggrieved by the portion of the Award by which the partnership business has been dissolved.

(2.) The petitioners submit that Clause 18 of the partnership agreement provides that any disputes or differences that may arise between the parties or their heirs or legal representatives during the subsistence of the partnership or any time thereafter shall be referred to arbitration under the Arbitration Act then in force provided always that in each of such reference the business of the partnership shall not be stopped. According to the learned Advocate for the petitioners, the sole Arbitrator did not have any jurisdiction to dissolve the partnership in view of the clause mentioned hereinabove. He relies on a decision of the Hon'ble Apex Court in the case of V.H. Patel & Company & Ors. Vs. Hirubhai Himabhai Patel & Ors., reported in (2000)4 SCC 368. The relevant paragraph of the decision is quoted below :- "12. So far as the power of the arbitrator to dissolve the partnership is concerned, the law is clear that where there is a clause in the articles of partnership or agreement or order referring all the matters in difference between the partners to arbitration, the arbitrator has power to decide whether or not the partnership shall be dissolved and to award its dissolution. Power of the arbitrator will primarily depend upon the arbitration clause and the reference made by the court to it. If under the terms of the reference all disputes and difference arising between the parties have been referred to arbitration, the arbitrator will, in general, be able to deal with all matters, including dissolution. There is no principle of law or any provision which bars an arbitrator to examine such a question. Although the learned counsel for the petitioner relied upon a passage of Pollock & Mulla, quoted earlier, that passage is only confined to the inherent powers of the court as to whether dissolution of partnership is just and equitable, but we have demonstrated in the course of our order that it is permissible for the court to refer to arbitration a dispute in relation to dissolution as well on grounds such as destruction of mutual trust and confidence between the partners which is the foundation therefor."

(3.) A preliminary objection is taken by the learned Advocate for the respondent, inter alia, that this Court was not the principal Civil Court of Original Jurisdiction to decide this application and the entire subject matter relates to the District of Darjeeling. An application under section 9 of the said Act was also filed by the respondent before the Learned District Judge at Darjeeling. However, the said application was withdrawn due to commencement of the arbitration proceeding.