SUBAL CHANDRA BHUR Vs. MDIBRAHIM

JUDGEMENT

(1.) This is an application on the part of one Subal Chandra Bhur for stay of Suit No. 12 of 1948 pending in this Court in which he is one of the defendants. The facts leading up to the present application are as follows : By a deed of partnership dated 19 February 1940 three persons namely the petitioner, Khan Bahadur Md. Ibrahim and Musaji Mchamed Dadabhoy agreed to carry on a catering and supply business at the Military and Prisoners of War Camp at Ramgarh to fulfil certain contracts placed by the military authorities with Khan Bahadur Md. Ibrahim. Clause 18 of that deed of partnership provides for arbitration in case of dispute between the partners in the following terms: All disputes which shall arise between the partners or any of them or between any partner or partners and the legal representatives of any other partner or between their respective legal representatives and whether during or after the determination of the partnership and whether in relation to the interpretation of these presents or to any act or omission of any party to the dispute or as to any act which ought to be done by the parties in dispute or any of them or in relation to any other matter whatsoever touching the partnership affairs shall be referred to a single arbitrator in case the parties agree upon one, otherwise to two arbitrators one to be appointed by each party to the difference in accordance with and subject to the provisions of the Indian Arbitration Act or any statutory modification thereof.

(2.) It is alleged by Khan Bahadur, Md. Ibrahim that the military authorities after making several complaints against the management of the business ultimately terminated the contracts with effect from 22 April, 1942. Since then the Prisoners of War Camp has been removed from Ramgarh. No other contract has been offered to the firm and none is to be expected and in the circumstances the partnership automatically came to an end on and from 22 April, 1942. It is the case of Khan Bahadur that the other partners namely the petitioner and Dadabhoy are in possession of the partnership assets except some furniture and they have not furnished any account and that he has been excluded from all knowledge of the affairs of the partnership. The petitioner says that the accounts of the partnership upto July 1941 were duly audited and signed and accepted by all the partners as correct, that subsequent accounts up to December 1941 has also been audited and the audit of the accounts from January 1942 was in course of preparation by the auditors but was interrupted by the conduct of Khan Bahadur and certain criminal proceedings and that on accounts being taken at least Rs. 28,000 would be found due by Khan Bahadur to his partners.

(3.) Khan Bahadur's case further is that the military authorities requisitioned the production of the books of accounts and vouchers of the firm before a Military Court of Enquiry in connexion with a case of bribery. Khan Bahadur attempted to comply with the requisition of the military authorities and there was forcible opposition on the part and on behalf of the other partners. There were then two criminal proceedings one by Khan Bahadur and the other by the brother of the petitioner. The books of account were seized by the police and were lodged in the Court of the Sub-Divisional Magistrate at Ranchi. The petitioner replies that Khan Bahadur procured the military authorities to issue the requisition and under the guise of complying therewith he tried to get exclusive possession of the books of account with the object of tampering with them. It appears that during the pendency of the criminal proceedings the four parties thereto namely the three partners and the brother of the petitioner agreed to go to arbitration. An agreement in writing was executed by the four parties and the criminal proceedings were adjourned. This agreement is annexure "B" to Khan Bahadur's affidavit in opposition to the present application. By this agreement, three named persons were appointed arbitrators who were authorised to take all available evidence from the parties and decide the pending criminal cases and adjudicate upon the claim of the firm against Khan Bahadur as well as the other partners on account of any loan or other transaction. There were about 14 sittings but the arbitration ultimately proved to be infructuous. Khan Bahadur says that the arbitration fell through by reason of the conduct of his other partners while the petitioner states that it fell through by reason of the fact that Khan Bahadur refused to proceed with the arbitration and in fact filed a petition to that effect and made it impossible for the arbitrators to go on and in fact caused one of the arbitrators to decline to act any further.