ROOPAK BAMBHA Vs. K C BHANDARI

JUDGEMENT

(1.) THIS is an application under Section 34 of the Arbitration Act moved by the defendant-applicant praying for stay of the proceedings in Civil Suit and to enable the parties to have their disputes settled by having recourse to the arbitration proceedings in accordance with the arbitration clause contained in the partnership deed and dissolution deed.

(2.) PLAINTIFF has claimed a decree for Rs. 2,59,689.96 paise on account of principal and interest. It is alleged that he had been running business of medicines at Dharamshala under the name and style of M/s. Deepak Medical Agency with one Smt. Lakshami Devi as a partner in the said firm. It is alleged that the firm was dissolved on 31/10/1989 and the plaintiff became its sole proprietor. Defendant K.C. Bhandari subsequently joined the plaintiff as a partner to the tune of 50% on and from 31/10/1989, but the partnership deed was executed on 12th Feb. 1990. This partnership firm of the plaintiff and defendant was dissolved on 13th Feb. 1990 and it was agreed that the capital accounts of the plaintiff as on 1st Nov. 1989 in the books of the firm shall be treated as loan to the defendant to be repaid by him by 31/03/1990. A balance sheet was also prepared, which showed a capital of Rs.1,12,969.96 paise in the name of the plaintiff as on 1st Nov. 1989. In addition to this, Rs. 18,000.00 was the loan of one B. P. Bambha and Rs. 20,000.00 from M/s. B. P. Bambha and sons. The balance sheet was duly signed by the defendant after admitting the contents to be true. The two loans of Shri B. P. Bhambha and M/s. B. P. Bambha and sons were later on purchased by the plaintiff by way of assignment on 11th Feb. 1991. Thus, the total amount due to the plaintiff from defendant as it stood on 31st Oct. 1989 was Rs. 1,50,969.96. This amount was agreed to be paid by the defendant on 31/03/1990. In part performance of the terms and conditions of the deed of dissolution, defendant gave an account payee cheque dated 31/03/1990 from the account of the firm. This cheque was presented by the plaintiff to the banker's for collection, but the same was returned on 25/04/1990 with the remarks 'refer to drawer'. That dispite demands thereafter the defendant has fail to pay the amount. In this background, plaintiff has claimed a decree for the amount along with interest at the rate of 24% Per annum till the date of suit and also a future interest from the date of filing of the suit till payment.

(3.) WHEN the case was taken up on 10th Sept. 1993, for recording plaintiff's evidence and then his witnesses were present, Mr. S.S. Kanwar put in appearance and stated that ex parte evidence be not recorded since he has instructions to put in appearances on behalf of the defendant and appropriate application for setting aside ex parte proceedings would be made. After hearing the learned counsel for the parties, ex parte proceedings were set aside subject to the defendant paying costs of Rs. 1,000.00. Plaintiff's witnesses were discharged. Six weeks' time was allowed to the defendant to file written statement.