MANGILAL FATERAM MAHESARI Vs. DEVICHARAN MANGALLAL

JUDGEMENT

(1.) THIS order disposes of three civil revisions viz. Nos. 345 of 1946, 346 of 1946 and 446 of 1946. Ganeshlal, Mangilal and Nathmal were partners of a partnership firm and of them Ganeshlal instituted Civil Suit No. 21B of 1946 in the Court of the Second Civil Judge, Second Class, Kasim, for dissolution of partnership and accounts. Devicharan Mangallal Kalar who was one of the creditors of the partnership firm applied under Section 7, Provincial Insolvency Act to have the three partners of the partnership declared insolvents. The parties i.e., the creditor and the partners agreed to refer the dispute in the suit and the proceedings to an arbitration of three arbitrators, one of them was to be nominated by the applicant (creditor), the other by the three partners and the third by the Insolvency Court. An application was accordingly filed on 26th April 1946 to the Insolvency Court and another application was filed to the same effect in civil Suit No. 21B of 1946 and it was requested that the Insolvency Court should appoint the third arbitrator and a reference be made for the decision of the dispute as stated above. The Insolvency Court refused to nominate an arbitrator and to make a reference on the ground that it was not a civil Court and under Section

(2.) (c), Arbitration Act it had no jurisdiction to make a reference. The civil Court also rejected the application filed in Civil Suit No. 21-B of 1946 as a result of the order of the Insolvency Court. The partners filed an appeal against the order of the Insolvency Court but the order of the Insolvency Court was upheld by the District Judge, Akola in civil Appeal No. 16 of 1946. 2. Civil Revision No. 345 of 1946 was filed against the order passed in civil Suit No. 21B of 1946 dismissing the application to make a reference. Civil Revision No. 846 of 1946 was filed against the order in the civil shit refusing to stay the progress of the suit till the disposal of the civil appeal against the order of the insolvency Court and this revision is now wholly infructuous and Civil Revision No. 446 of 1946 is filed against the appellate order confirming the order of the insolvency Court. The main revision is thus Civil Revision No. 446 of 1946.

(3.) SECTIONS 5 and 7, Arbitration Act lead to the conclusion reached by the appellate Court. It shows that after the commencement of the insolvency proceedings the person proceeded against has no right to agree to a reference to arbitration. Reliance was placed on the definition of District Court to show that the insolvency Court is essentially a civil Court but in my opinion that definition and Section 3, Provincial Insolvency Act show that the insolvency Court is a special Court and not a civil Court within the 'meaning of Section 2(c), Arbitration Act.