SMT. VIMLESH BANSAL WIFE OF PREM PRAKASH BANSAL Vs. ASHOK KUMAR SON OF SHRI BAIJ NATH, AGED 53 YEARS, R/O NEW COLONY, WAREHOUSE ROAD, BAYANA, DISTRICT BHARATPUR (RAJASTHAN)

JUDGEMENT

(1.) This application under Section 11 of the Arbitration and Conciliation Act, 1996, has been filed by three applicants, namely, Smt. Vimlesh Bansal, Smt. Shakuntala and Anand Kumar Singhal, praying for appointment of an independent arbitrator for resolving their disputes with non-applicant Ashok Kumar. Facts, as disclosed in the memo of application, are that a partnership firm was constituted on 07.06.1999 in the name and style of M/s. Shakti Udyog Sangh having its office at Shri Prem Prakash Bansal, New Sabji Mandi, Station Road, Bayana, District Bharatpur. However, the office of the firm was shifted to the residence of the non-applicant with the consent of the parties. The business of the firm was of sale and manufacturing of stone grits. As per the mutual agreement, all the partners arranged for capital required to run the business of the firm. It was also agreed that each of the partner shall get interest at the rate of 12% per annum on their share of capital investment in the firm. The partners also agreed for their entitlement to receive remuneration as per Article 6 of the Partnership Deed executed on 07.06.1999. Applicant Anand Kumar Bansal had 30% share, applicant Smt. Shakuntala Bansal had 10% share, applicant Smt. Vimlesh Bansal had 30% share in the partnership firm. Non-applicant also had his 30% share in the partnership firm. Partnership firm had opened its account No.10011467 with the branch of Bank of Baroda, Station Road, Bayana, District Bharatpur, in the name of applicant Smt. Vimlesh Bansal and she is the fourth party in the firm and had 30% share capital. Clause 12 of the partnership deed, supra, provided that all matter of differences relating to the partnership shall be referred to arbitrator appointed by the partners as per provision of the Arbitration Act, and the decision of the arbitrator shall be binding upon all the partners.

(2.) Mrs. Anjoo Shukla, learned counsel for applicants, argued that ever since the office of the firm was shifted to the residence of non-applicant, he started violating the conditions contained in the clauses of the partnership deed. The non-applicant has taken entire business of the firm and its machinery and assets exclusively in his hands and is misappropriating it as per his own free will and without even consulting or informing the applicants. The non-applicant has established a parallel industry having similar business and has caused huge financial loss to the partnership firm. Although, the material was produced in the partnership firm but the non-applicant conducted entire sale and transactions of it in the name of his own firm so much so that the non-applicant eventually closed the functioning and production of the partnership firm and started to devote entire work to his own firm. After 06.06.2005, the non-applicant had no transaction with the bank but he opened another account and dealing with the business of his own profit and causing huge financial loss to the partnership firm. Despite persistent request by the applicants, the non-applicant in the last week of August, 2009, completely refused to abide by the terms and conditions of the partnership deed. The applicants therefore served a legal notice through their counsel on 21.08.2009 calling upon him to dissolve the firm and to produce and furnish the accounts and other documents of the firm, which were in his possession and also to give complete account of business activities of the firm after June, 2005, and further to stop using crusher machine. He was also called upon to furnish name of arbitrator within thirty days of service thereof, failing which appropriate steps shall be taken to file proper application. When the non-applicant did not respondent thereto, another notice was served through advocate on 09.09.2011, wherein similar demand was made. Even then the non applicant failed to reply such notice.

(3.) Learned counsel for applicants, in support of her arguments, has relied on judgments of the Supreme Court in Visa International Ltd. v. Continental Resources (USA) Ltd. - AIR 2009 SC 1366 , and argued that the Supreme Court in the facts of that case as well as from the exchange of correspondence between the parties that there has not been any satisfaction recorded by the parties with respect to their claims and there was no mutual satisfaction arrived at between them as regards the dispute and further the claims were not barred by limitation, held that there is a live issue subsisting between the parties requiring its resolution and a clear case was made out for appointment of arbitrator to decide disputes between the parties.