KARTAR SINGH Vs. MEHR SINGH

JUDGEMENT

(1.) THIS petition raises the question whether the Courts below were justified in staying. We proceedings of the suit under the provisions of section 34 of the Arbitration Act.

(2.) ON the 24th March 1944 five persons executed a deed of partnership containing an arbitration clause according to which all differences arising amongst the partners with regard to the partnership business were to be referred to an arbitrator nominated by the majority of the partners. On the 7th August 1945 they are alleged to have entered into another agreement in super session of the earlier agreement and to have dissolved the partnership. On the 13th August 1943 Mehr singh who is one of the five partners brought a suit for dissolution of partnership arid rendition of accounts against the remaining partners. Kartar singh defendant pleaded that the partnership between the parties had already been dissolved by mutual agreement, that the original agreement containing the arbitration clause has been superseded by the agreement dated the 7th August 1945, that the partnership accounts had been gone into and settled, that the partnership had come to an end and that there was in existence no dispute which needed to be settled either by an arbitrator or by a Court of law. The trial Court came to the conclusion that a dispute had arisen in regard to the partnership business and directed that this dispute be referred to an arbitrator nominated by a majority of the partners before any action could be taken in a Court of law. This decision was upheld by the lower appellate Court and Kartar Singh has come to this Court in revision.

(3.) FOR these reasons I would accept the petition, set aside the orders of the Courts below and remand the case to the trial Court with the direction that it should decide (l) whether the parties to this litigation entered into an agreement on the 7th August 1945; and if so (2) whether this agreement extinguished the agreement dated the 24th March, 1944 or constitutes a bar to the enforcement of the arbitration clause contained in the earlier agreement. If the answers to both the questions are in the affirmative, the matter cannot be referred to an arbitrator and must be decided by a Court of Law.