LAL CHAND Vs. CHUNNI LAL

JUDGEMENT

(1.) This C.M.A. Under Section 39 of the Arbitration Act (for short the 'Act') has been directed against the order dated 1.10.1994, passed by learned Additional District Judge No. 6, Jaipur City, Jaipur, rejecting the application under Section 34 of the Act in suit No. 130/91.

(2.) Brief relevant facts of this appeal are that the plaintiff respondent Chunni Lal filed a suit for dissolution of partnership firm and rendition of accounts, with the allegations that the appellant and respondent No. 1 Chunni Lal started a business in partnership in the name of M/S Lal Chand Moti Lal Oil Mills on 1.10.1980; that the partnership was at Will; that the disputes arose between the parties; and that the appellant included his son Rakesh Kumar, respondent No. 2 in the partnership business in illegal way and got electricity connection in his name even though there was an electricity connection in the name of partnership firm itself. In Para No. 7 of the plaint, it has been mentioned that on 10.10.1990, Serva Shri Gouri Shankar Thawaria, Ram Nath, Shiv Prasad Kanungo, Damodar Das Agrawal and Sita Ram Agrawal were appointed arbitrators and it was expected from them that they would resolve the dispute by the end of December, 1990, but no steps were taken by them. Not only this, the arbitrators expressed their inability to resolve the dispute. It was prayed that a decree be passed declaring that the partnership firm started on 1.10.1980 stood dissolved either from the date of the suit or from the date of decree as the Court may think proper. It was further prayed that a Commissioner be appointed who after taking accounts of the firm make partition between the appellant and the respondent No. 1, Prayer for appointment of receiver of the properties of firm was also made. On receipt of summon of the suit, the appellant filed an application under Section 34 of the Act, with the allegations that in Para No. 16 of the partnership -deed dated 1.10.1980, it was specifically mentioned that all the disputes of partnership firm between the partners would be referred for arbitration under the Act and that the appellant was and is, still prepared for arbitration. In Para No. 4, it has been mentioned that the partnership firm continued upto 1.10.1983. On 30.9.1984, a new -partnership firm was constituted between the parties in which condition No. 11 was similar. It has been further mentioned that on 10.10.1990, the parties appointed arbitrators as mentioned in Para No. 7 of the plaint. The matter is still pending for arbitration with the arbitrators. If the arbitrators did not act, other arbitrators can be appointed under the Act. It was prayed that proceedings of the suit be stayed.

(3.) In reply to the said application, the plaintiff respondent mentioned that on 3.6.1991, Shri Shiv Prasad Kanungo (Arbitrator) on behalf of all the arbitrators gave in writing that they were unable to arbitrate the matter. He also handed -over the original letter which was given to the arbitrators by the plaintiff -respondent. It has been further mentioned in the reply that defendant No. 2 was not a party to the partnership deed and as such if any award is given by the arbitrators, that can not be binding on the defendant No. 2. The learned Judge vide his order dated 18.7.1991; dismissed the application holding that there was sufficient reason as to why the matter should not be referred to arbitrators in accordance with the Act. Being aggrieved with the said order the defendant -appellant has filed this appeal.