Satinder Singh and others vs Bachan Singh and others

J.V. Gupta, J.—This order will dispose of Civil Revision Nos. 2741 and 2740 of 1985, as the question involved is common in these two cases and both the petitions have been filed against the same order.

Plaintiff, Bachan Singh, filed the suit for dissolution of the partnership and rendition of accounts etc. Therein, the defendants moved an application u/s 34 of the Arbitration Act for stay of the suit because of the arbitration clause in the partnership deed between the parties. At the same time, the plaintiff also moved an application for appointment of the receiver under Order 40 Rule 1, Civil Procedure Code. Both these applications were contested by the respective parties. The trial Court came to the conclusion that in view of the arbitration clause in the agreement between the parties, the suit was to be stayed u/s 34 of the Arbitration Act and consequently stayed the same However, as regards the application filed by the plaintiff for the appointment of the receiver, the trial Court did not pass any order and left the matter open to be decided by the Arbitrator. Ultimately, the order of the trial Court reads as under :--

In view of my above discussion I accept the application of defendant Nos. 4 to 8 and stay the suit u/s 34 of the Arbitration Act, and will not like to give any finding on the application for appointment of receiver and the same is left open to that, the aggrieved party may get any relief regarding the appointment of receiver under the Indian Arbitration Act. Accordingly, the suit is stayed.

Dissatisfied with the same, the plaintiff filed two appeals in the Court of District Judge, Ludhiana. The learned District Judge came to the conclusion that in view of the authorities of this Court reported in Sewa Ram Ahmednagar Vs. Raj Rani and Another, and Narinder Singh Randhawa and another v. Hardial Singh Dhillon (1985) 88 P.L.R. 422 the proceedings in the suit could not be stayed u/s 34 of the Arbitration Act. It was further found that though the trial Court had not passed any specific orders for refusing to appoint the receiver but at the same time, the orders was of final nature regarding the non-appointment of the receiver and, therefore, the appeal as such was maintainable. Consequently, the order for the appointment of the receiver was also passed.

Dissatisfied with the same, the defendants have filed these two petitions in this Court.

The learned counsel for the petitioner contended that there being an arbitration clause in the partnership deed, the suit was rightly stayed by the trial Court but the view taken by the lower appellate Court was wrong and illegal. As regards the appointment of the receiver, it was contended on behalf of the learned counsel that the trial Court did not pass any final order and, therefore, no appeal as such was maintainable against the said orders. In any case, argued the learned counsel, that no case for appointment of the receiver was made out and on the facts and circumstances of the case, no receiver could be appointed by the lower appellate Court. On the other hand, the learned counsel for the plaintiff-respondent, submitted that even if there was an arbitration clause since relief of rendition of accounts was claimed in the suit, the same could not be stayed u/s 34 of the Arbitration Act. He also referred to the judgments relied upon by the lower appellate Court. As regards the appointment of the receiver, the learned counsel argued that the trial Court''s order was final in not appointing the receiver and, therefore, it was an appealable order as such.

After hearing the learned counsel for the parties, I am of the considered view that there is no justification for interfering in the order passed by the lower appellate Court on the application u/s 34 of the Arbitraion Act in not staying the suit. To that extent, the order of the lower appellate Court is right. The trial Court will proceed with the suit in accordance with law.

As regards the appointment of the receiver, no orders were passed by the trial Court and, therefore, no appeal as such was competent. In case the lower appellate Court was of the opinion that the suit should not have been stayed u/s 34 of the Arbitration Act, then in that situation, the case should have been sent back to the trial Court for deciding the application for appointment of the receiver. In any case, after hearing the learned counsel for the parties, I do not find that any case for appointment of the receiver, as such is made out. However, the trial Court will be at liberary to pass any order as to putting the parties to term in order to safeguard their interests in the suit, after hearing both the parties.

Consequently, Civil Revision No. 2741 of 1985 is allowed and the order of the appellate Court appointing the receiver is set aside, whereas Civil Revision No 2740 of 1985 against the order of the lower appellate Court rejecting the application u/s 34 of the Arbitration Act is dismissed. The parties have been directed to appear before the trial Court on 20-12-1985.