S.S. GUPTA Vs. RAMESH KUMAR GUPTA

JUDGEMENT

(1.) This appeal is directed against order of the learned Additional District Judge, Chandigarh dated 15.05.2010 by which an application of the Appellant filed under Section 9(ii)(c) of the Arbitration and Conciliation Act, 1996 [for short "the Act"] has been dismissed with the following observations:

(2.) The brief facts of the case are that the parties to the dispute are partners of a firm vide partnership deed dated 01.04.1999. The firm is engaged in the business of manufacturing and trading of polythene, granules and fitting polymers etc. under the name and style of M/s United Polymer Industries. The partnership firm comprises of four partners having 25% share each. The firm is mainly dealing with the Gas Authority of India Limited as stockist. It is alleged that Respondent Nos. 2 and 3, namely R.K. Gupta and M.L. Gupta, executed a new partnership deed dated 26.02.2007 and submitted it to the Gas Authority of India Limited to carry on same business under the name and style of M/s United Polymer Industries situated at the same premises i.e. Plot No. 136-140/85, Industrial Area, Phase-I, Chandigarh (U.T.) where the Appellant and Respondents are carrying on the business by virtue of partnership deed dated 01.04.1999. The Appellant objected to the conduct of Respondent Nos. 2 and 3 who had assured that they would not work to the detriment and interest of the partnership created vide partnership deed dated 01.04.1999, but still they submitted new partnership deed dated 26.02.2007 to the HDFC Bank for opening a new bank account to enable them to divert the funds of the firm constituted vide partnership deed dated 01.04.1999. Respondent Nos. 1 to 3 filed an application under Section 9 of the Act before the learned Civil Court, who vide his order dated 25.02.2008, restrained the Appellant from participating in day to day working of the partnership firm constituted vide partnership deed dated 01.04.1999. The relevant part of the order passed on 25.02.2008 by learned Additional District Judge, Chandigarh is as under:

(3.) Shri G.C. Mittal (Retired Chief Justice) was appointed as the Arbitrator. He gave his award dated 18.12.2009. The Appellant filed objection against award of the Arbitrator under Section 34 of the Act and also filed an application for seeking stay of the operation of the impugned award which has been dismissed by the learned Court below with the observations which have been mentioned in the opening part of this order. The only objection raised by the Appellant in this appeal is that being shareholder to the extent of 25% in the business, he, in law, cannot be injuncted from entering the premises of the firm. As a matter of fact, the application filed by the Appellant for staying operation of the award of the Arbitrator has been dismissed, but during pendency of the objection petition under Section 34 of the Act, the learned Court below provided safeguard to watch interest of the Appellant. The Appellant has been restrained by the learned Court below in its order dated 25.02.2008 passed under Section 9 of the Act, during the pendency of the arbitration proceedings, from interfering in day to day working and management of the partnership firm. The stay order has been made a part of the arbitration award by the learned Arbitrator, which reads as under: