HARSH WARDHAN SINGH Vs. MAHESH WARDHAN SINGH

JUDGEMENT

(1.) The plaintiff- petitioner filed a suit for dissolution of the firm and rendition of accounts claiming that under the registered partnership deed with defendant-respondents No. 1 & 2. it was agreed that the partnership was at will and upto 30.9.1998 and all partners had mutually settled their accounts till that date and thereafter the business of the concern was being conducted and supervised by defendant-respondent No.2 through her husband defendant-respondent No.3 and all the books of accounts were also being maintained by defendant-respondents No. 2 and 3, are now in their custody and they are the accounting parties. After 30.9.1998, defendant-respondents No.2 & 3 opened another account in the name of the firm with the Punjab National Bank, Arya Chowk, Bathinda without the consent of the plaintiff-petitioner and earlier the account of the firm was opened with Canara Bank and the same was being operated jointly as per terms of the partnership deed. The business of the firm is being run by defendant-respondent No. 3 who is not a partner of the firm and he along with defendant-respondent No. 2 are keeping the custody of entire books of the firm with the purpose of depriving the plaintiff-petitioner of the actual account i.e. profit and loss account of the firm besides defendant-respondent No. 3 has also started claiming to be the sole proprietor of the firm. These defendant-respondents No. 2 & 3 have again changed the bank account and opened the same with Bank of India without allowing any access to the account books and rendition of the accounts of the firm to the plaintiff-petitioner and inspite of the request of the petitioner, the defendant-respondents have not dissolved the firm so far compelling him to file a suit for dissolution of the firm and rendition of the accounts.

(2.) Defendant-respondents No. 2 & 3 filed an application under Section 34 of the Arbitration Act seeking the stay of further proceedings in view of clause 9 of partnership deed by which dispute between the parties was to be referred to the arbitration. It was further claimed that the dispute ought to have been referred firstly to an Arbitrator to be appointed by the parties according to clause 9 of the partnership deed but instead of referring the matter to the arbitration, the plaintiff-petitioner has initiated the legal proceedings in contravention of the arbitration clause. The defendants further claimed that at the time when the proceedings were commenced they were and are still ready and willing to do all things necessary for the proper conduct of the arbitration between the parties. The application was opposed by the plaintiff-petitioner claiming that defendant respondent No.3 had no locus standi to seek the stay of further proceedings under section 34 of the Arbitration Act being not a party to the partnership. The plaintiff petitioner admitted the existence of arbitration clause 9 in the agreement. However, he claimed that he is not estopped from filling the suit in view of the circumstances and the facts alleged in the same. The civil Court can well adjudicate upon the rights between the parties and-if so considered, the Court can appoint an Arbitrator. The suit, being not in violation of the terms with regard to the arbitration is maintainable besides the defendant-respondents No. 2 & 3 were never ready and willing as alleged and he prayed for the dismissal of the application.

(3.) Learned trial Court, after hearing the counsel for the parties and being satisfied, held that it was not a case where the arbitration clause provided reference of dispute to any particular arbitrator or the manner in which the arbitrator can be appointed. The suit, being for dissolution of the firm and rendition of accounts, can not be stayed in view of the vagueness of the arbitration clause and, thus, the application filed by defendant-respondents No. 2 & 3 was dismissed.