BRIJLAL RAMJIDAS Vs. GOVINDRAM GORDHANDAS SEKSARIA

JUDGEMENT

(1.) On 17 July 1935, the two appellants, four of the five respondents, and one other person who is now represented by his heir, the fifth respondent, entered into a deed of partnership. The partnership business was "thatofactingasthemanagingagentsandsellingagentsoftheIndoreMalwaUnitedMillsLtd." and was to be carried on "at Indore or at such other place or places as the partners shall or may from time to time agree upon." An arbitration clause in the deed provided for the reference of disputes to arbitration "in accordance with and subject to the provisions of the Indian Arbitration Act, 1899, or any statutory modification thereof for the time being in force." So far as appears from the Record, the business of the partnership was always carried on at Indore.

(2.) By the end of 1940 there were disputes between the partners which appear to have become the subject of public controversy, and on 17 December 1940, the seven partners referred their differences to the arbitration of the Prime Minister of Holkar State, Indore. There is nothing in the Record to indicate that the arbitrator was asked, or agreed, to act in accordance with any law but that of Indore. On the contrary, the appellants pleaded in the course of the suit which has given rise to this appeal that the arbitration was "governed by the Indore Arbitration Act," and until the hearing at their Lordships' Bar all the parties appear to have acquiesced in this view.

(3.) On 8 February 1941, the arbitrator made an award, after conducting an inquiry which was admittedly of an informal character. It was apparent that if effect were given to this award, a dissolution of the partnership would result. After reciting that all the parties "agreed that it was impossible to carry on the present partnership any longer," the arbitrator stated his decision that the appellants should sell their "shares" in the partnership at "par" to the first respondent, and that they should sell to him, also at par, certain debentures held by them.