TIRLOK CHAND JAIN Vs. SWASTIKA STRIPS P LTD

JUDGEMENT

(1.) THE short but interesting question of law that arises in this case is : whether, in a petition under Sections 433, 434, 439, 582 and 583 of the Companies Act, 1956, filed for the winding up of the company, a prayer made under Section 34 of the Arbitration Act, 1940, for referring the matter to the arbitrator can at all be granted. The following facts furnish the backdrop of the controversy raised.

(2.) THE petitioners along with others were the members of a private firm and on March 16, 1989, the respondent-company was also inducted as one of the partners in the firm and a new partnership deed was executed on that very day. As per mutual agreement between the partners, a profit and loss account for the period ending March 15, 1989, was prepared and it was duly credited/debited to the individual accounts of the partners. Thereafter, on March 31, 1989, the company and ten others who were the members of the partnership concern decided mutually to dissolve the firm. The balance-sheet as also the profit and loss account of the firm were prepared. It was agreed between the partners that the company would take over all the assets, and liabilities as a going concern as per the balance-sheet drawn as on March 31, 1989. It was further agreed that the company which was described as a continuing partner in the deed of dissolution would pay to the outgoing partners the amounts standing to their credit in their respective accounts as per the balance-sheet drawn up as oh March 31, 1989. One of the important conditions, i. e. , No. 15 of the partnership deed dated March 16, 1989, was as follows : "that any dispute or differences which may arise amongst the partners or their representatives with regard to the construction, meaning and effect of this deed or any part thereof or regarding the accounts, profits and losses of the business, or the rights and liabilities of the partners under the deed of dissolution or winding up of the business or any other matter relating to the firm shall be referred to arbitration. "

(3.) A bare reading of Clause 15 of the partnership deed dated March 16, 1989, clearly indicates that it has no relevance to the relief prayed for in Company Petition No. 39 of 1990, i. e. , for the winding of the respondent-company. It is beyond dispute that proceedings under Section 433/434 read with Section 439 of the Companies Act are in a completely different jurisdiction than the one under which remedy or relief can be sought by way of arbitration. It is fallacious to conceive that the proceedings for winding up under the above-noted Sections of the Companies Act, in any way, are the proceedings for the recovery of any amount. On the contrary, the above-noted provisions, record or codify the circumstances/grounds on which a company can be ordered to be wound up by the court. So, none of the disputes referred to in the above-noted Clause 15 of the partnership agreement can be co-related to the relief in Company Petition No. 39 of 1990. For this conclusion of mine, I seek support from the following earlier pronouncements of this court as well as the other High Courts: (i) Salaq Ram v. New Suraj Finance and Chit Fund Co. Pvt. Ltd. (Company Application No. 8 of 1979 in Company Petition No. 147 of 1978 -- decided on July 12, 1979), (ii) Maruti Ltd. v. B. G. Shirke and Co. P. Ltd. [1981] 51 Comp Cas 11 ; [1981] PLR 732, (iii) Thakur Paper Mills Ltd. , In re, AIR 1968 Patna 289 ; [1969] 39 Comp Cas 47 (Patna) and (iv) Hind Mercantile Corporation Pvt. Ltd. v. J. H. Rayner and Co. Ltd, [ 1971 ] 41 Comp Cas 548 (Mad ). No judgment taking a contrary view has been brought to my notice by learned counsel for the applicants.