Ajay Bir Singh vs Krishan Partap and Others

Kamlesh Sharma, J.—The Petitioners-defendants are aggrieved by order dated 6.8.1994 passed by Additional Distt. Judge (I), Kangra at Dharamshala, whereby the appeal of Respondent No. 1 Plaintiff was allowed and order dated 18.11.1991 of Sub Judge Ist Class, Nurpur, was set aside. Sub Judge Ist Class had allowed the application of Petitioners-defendants and proforma Respondents-defendants, u/s 34 of the Arbitration Act (hereinafter called the ''Act'') and stayed the suit of Respondent No. 1-Plaintiff. Originally, in the suit, Kartar Singh Sandhu was Defendants besides, now proforma Respondent No. 2, Dalip Singh.

Both the Defendants, after putting in appearance in the suit, filed application u/s 34 of the Act. Before this application, could le decided Kartar Singh Sandhu had died and his legal representatives i.e. the present Petitioners and his widow, now proforma Respondent No. 3, were brought on record. In the appeal, filed by Respondent No. 1 -Plaintiff, before the District Judge, all the three wee made party besides Dalip Singh, now proforma-Respondent No. 2. The Petitioners and Dalip Singh chose to remain absent even after due service of the appeal and they were proceeded ex-parte. Only widow of Kartar Singh Sandhu, now proforma Respondent No. 3, had put in appearance through Shri P.P. Gupta, learned Counsel, whose power of attorney is on record. On 6.8.1994, District Judge tried conciliation for 75 minutes between the parties and brought about compromise according to which learned Counsel appearing for Smt. Kawaljit Kaur, proforma Respondent No. 3, withdrew the application u/s 34 of the act and consequently the order dated 18.11.1991 of Sub Judge 1st Class was set aside the appeal was allowed.

This Court has heard learned Counsel for the parties and gone through the record. Referring to Sub-rule (5) of Order 23 Code of Civil Procedure, Shri Bhupender Gupta, learned Counsel for the Petitioner, has urged that the statement of learned Counsel appearing for Kawaljit Kaur was only on her behalf, as such, the application, which was jointly moved on behalf of the Petitioners as well as proforma Respondent No. 2, could not be dismissed. In support of his submission, he has relied upon the judgment in Thayammal v. Rangaswami Reddy AIR 1956 Mad 15, Dangar Bharmal Handu v. Soni Devkaran Raghavji and Ors. AIR 1953 Kut 35 and Velu Malavarayan v. T.M.C. Kuppuswami Pillai AIR 1920 Mad 233. The proposition of law laid down in these judgments cannot be disputed but these judgments arc on the facts of each case in which these were delivered. So far the present case is concerned, the Petitioners as well as proforma Respondent No. 2, did not appear before District Judge despite due service on them and they were proceeded ex-parte which clearly shows that they were not contesting the appeal in which Respondent No. -l Plaintiff had challenged the order dated 18.11.1991 allowing the application u/s 34 of the Arbitration Act, which amounts to abandoning their claim in that application, as such, the District Judge was at liberty to pass the impugned order.

Even on merit, the order dated 18.11.1991, passed by Sub Judge Ist Class, cannot stand the scrutiny of this Court. After going through the plaint, this Court finds that in view of the serious allegations made therein, more specifically in para-7, that deceased Kartar Singh Sandhu, the original Defendant No. l, had fraudulently incorporated clausc-8 in the partnership deed to the disadvantage of Respondent No. 1-Plaintiff and also paragraph-8 that he was carrying on business of partnership and using and enjoying the benefits and assets thereof to the exclusion of Plaintiff since January, 1991, it was not a fit case in which application u/s 34 of the Act should have been allowed staying the suit. For holding this view, this Court takes support form the judgment of Andhra Pradesh High Court in Raja Picture Palace, Raja Picture Palace, Rajahmundry and Others Vs. Marina Jagga Rao, and Narinder Singh Randhawa and Another Vs. Hardial Singh Dhillon and Others, . In the case of Raja Picture Palace (supra), the learned Judges have held that where the suit was filed for declaration that the expulsion of the Plaintiff form the partnership firm was illegal, void, inoperative and unenforceable on the allegations inter alia that the Defendant played fraud on the Plaintiff and got introduced the clauses relating to the expulsion of a partner and reference to arbitration without knowledge and consent of the Plaintiff, the Court would not exercise its discretion to order stay of the legal proceedings u/s 34 of the Act. Similarly, in the case of Narinder Singh Randhawa and Anr. (supra), the learned Judges have held that whenever dissolution of partnership is sought u/s 44(g). then it is for the Court to decide, whether it would be just and equitable to dissolve the partnership or not and such a matter cannot be left to be gone into and decided by the arbitrator in pursuance of the arbitration clause contained in the partnership deed. For holding this view, the learned Judges have relied on Dwarka Nath Kapur v. Rameshwar Nath (1966) 68 P.L.R. (Delhi) 91 and Nitya Kumar Chatterjee v. Sukendu Chandra : AIR 1977 Cal. 130. In the present case, the suit of Respondent No. 1-Plaintiff is also for dissolution of partnership and rendition of accounts on the serious allegation made in the plaint, as such, it is not a fit case in which trial of the suit should be stayed by allowing the application u/s 34 of the Arbitration Act filed by Petitioners and others.

The result of this discussion is that there is no merit in this revision petition and it is dismissed. No order as to costs.

The trial Court is directed to proceed with the trial of the suit in accordance with law expeditiously as the suit was filed on. 14.9.1994. Parties will appear before the Sub Judge Ist Class, Nurpur, on 9th December, 1996. Records be sent to lower Courts immediately.

CMP No. 310/94:

In view of the dismissal of the civil revision, this application is also dismissed and interim stay dated 20.10.1994 stands vacated.