DHANRAJ Vs. PRATAP

JUDGEMENT

(1.) THESE two appeals arise out of the orders dated 19-5-78 passed by the Additional District Judge, Sirohi in Civil Suits Nos. 10/74 and 12/77, whereby the defendant-appellant's applications under Section 34 of the Arbitration Act were rejected and the defendant was directed to file written statement in both the suits. As common questions are involved in both the appeals, so, I propose to dispose of both the appeals by this common judgment.

(2.) THE facts giving rise to the present appeals may be noticed. THEre was a partnership between the plaintiffs and the defendant under the name and style of M/s. Bhagwati Iron and Steel Re-rolling Mills, Rani. THE partnership came into existence on 13-11-66. THE said partnership was dissolved with effect from 11-6-69 and a deed of dissolution was executed on 12-7-69, Under this deed of dissolution, the defendant Dhanraj was under an obligation to make payment of Rs. 27065.10 due to the firm carried on by the plaintiffs. THE payment of this amount was to be made in yearly instalment of Rs. 4,000. According to the plaintiffs some payment was made by the defendant under this document and when some instalments became due, the plaintiffs first instituted a suit for recovery of Rs. 14,880, which is registered as Suit No. 10/74. When further instalments became due and remained unpaid, the plaintiff instituted another suit, which was registered as original Suit No. 12/77. In both these suits, the defendant made an application under Section 34 of the Arbitration Act. THE defendant, inter alia, stated in his application under Section 34 that the deed of dissolution dated 12-7-69 was got executed by practising fraud and undue influence. It was also stated that the defendant had moved an application under Section 20 of the Arbitration Act on 1-6-74. This application was resisted by the plaintiff. THE learned Additional District Judge after hearing both the sides, rejected the application under Section 34 by the orders under appeal. THE learned Additional District Judge taking into consideration that the District Judge, Pali has rejected the application under Section 20 on 16-11-74 and he further expressed the view that as per the allegations in the plaint, the partnership was dissolved and a fresh agreement was entered into between the parties and under the fresh agreement. the defendant undertook to pay a sum of Rs. 27,065.10 and it is this question, which is involved in the present suits, So, on that basis, he dismissed the defendant's application under Section 34 of the Arbitration Act. Dissatisfied with the orders of the learned Additional District Judge, the defendant Dhanraj has preferred these appeals,

(3.) SHRI Samdaria, on the other hand, urged that in the application under Section 34 of the Arbitration Act, the validity of the deed of dissolution cannot be enquired into. If the defendant so desired, he could have availed the remedy, which may have been available to him for seeking a declaration to the effect that the deed of dissolution is void on account of the fact that it was got executed by practising fraud or undue influence. He urged that prima facie, the deed of dissolution contains fresh agreement for payment of a sum of Rs. 27,065.10, to the partnership firm and so, necessarily the arbitration clause does not survive.