BANWARI LAL Vs. OM PRAKASH

JUDGEMENT

(1.) This is an appeal Under Sec. 39(1)(vi) of the Arbitration Act, 1940, against the order of Additional District Judge, No. 2, Jaipur City, dated April 8, 1972, by which he refused to set aside the award of the arbitrator. On basis of the award, he passed a decree for Rs.9,231.40 paisa with proportionate cost and interest pendente lite and further at rate of 6% per annum till the date of realization.

(2.) The facts of the case may be mentioned briefly only to the extent to which they are relevant for the purposes of this appeal.

(3.) The plaintiff respondent carried on a business in the name of M/s Jaipur Electric and General Industries and on November 1, 1962, the defendant appellant Banwari Lal and defendant respondent Ramesh Kumar agreed to form a partnership along with the plaintiff to carry on the aforesaid business in the same name. The terms and conditions of the partnership were reduced to writing in deed dated November 2, 1962. However, this partnership business did not last long and after some differences arose between the parties, they agreed to part with each other. The plaintiff agreed to retire from the partnership and after settling the accounts, it was agreed between the parties that a sum of Rs.0,098.50 was payable to the plaintiff. In lieu of this agreed amount, the defendants issued a crossed -cheque, in favour of the plaintiff on December 31, 1962. A deed of retirement was executed by the parties. However, when the cheque was presented to the Bank for encashment, the same was refused on the instructions of the drawer. The plaintiff then brought a suit for the recovery of this amount along with interest. The defendant moved the Court, with an application under Sec. 34 of the Indian Arbitration Act for referring the dispute to arbitration in accordance with the terms of the partnership deed and for the stay of the suit. However, it was held by the trial court on January 31, 1964, when the partnership deed had been superseded by the dissolution deed and in the dissolution deed, there was no clause to refer the dispute to the arbitration so the application was dismissed Thereafter, the defendant filed a written statement and also admitted that they issued a cheque for Rs.10,098 50.00 but they justified the stopping of the payment of the same on the ground that some other amounts were to be recovered from the plaintiff. According to the defendant, a sum of Rs.9,487.00 - was to be transferred to the defendants, in accordance with the partnership agreement and as this amount was not transferred so they had withheld the payment of cheque. Another adjustment sought by the defendants was of Rs.875.00 - said to be paid at the instance of the plaintiff to discharge the liability of the old concern. After this counter claim was made in the written -statement, the plaintiff moved an application that the dispute regarding amount, claimed by the defendant in his written statement arose out of the partnership -agreement and therefore, this matter may be referred to arbitration in accordance with the terms of the partnership deed. This application was accepted and the dispute was referred to Shri Avadh Bihari Lal Mathur Advocate as Arbitrator to consider the point in dispute. The Arbitrator filed his award on September 15, 1970. Except for a sum of Rs.867.00 - which the defendant wanted to adjust, the other items of Rs.2,370.00 -and Rs.7,000.00 - were not accepted. According to the Arbitrator, this amount could have been realised by the defendants from the concerned firms and they were not entitled to any adjustment against Rs.10,098.00 - payable to the plaintiff.