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2006 Supreme(AP) 255

Andhra Pradesh High Court
Judges : D.S.R.VERMA, P.SWAROOP REDDY
Krishna Sarma - Appellant
Versus
Ramesh Kumar Joshi - Respondent
Decided On : 02-24-06

Headnote:Arbitration & Conciliation Act, 1996 - Section 8 - Reference - power of Court to refer disputes - Court cannot mechanically or for mere acting refer parties to arbitration

       Held : A perusal of sub-section (1) of section 8 of the Act makes it clear that in order to make an application under Section 8 of the Act, the subject matter of the suit shall also be the subject matter of arbitration In other words, only those disputes, which are specifically agreed to be arbitrated alone, can be the subject matter of the arbitration and upon satisfaction of the same, the Court can subject the parties to arbitration

       The court cannot, mechanically or for mere asking, merely because the arbitration agreement had been presented, refer the parties for arbitration It implies that it is necessary for the Court or the Judicial authority to go into the facts of the case

D. S. R. VARMA, J.

( 1 ) HEARD both sides.

( 2 ) SINCE the parties being common and the issue involved being inter-related, both the Civil Miscellaneous Appeal and the Civil revision Petition are being disposed of by this common judgment.

( 3 ) C. M. A. No. 4381 of 2004 is directed against the order and decree, dt. 9-11-2004. passed by the District Judge, East Godavari at Rajahmundry, allowing the application i. A. No. 2316 of 2004 in O. S. No. 77 of 2004, filed under Order XL Rule 1 of the Code of civil Procedure seeking to appoint a receiver in respect of M/s. Venkata Naga Devi Picture palace, a cinema theatre in Rajahmundry, while C. R. P. No. 5995 of 2004 is directed against the order and decree, dt. 9-11 -2004, passed by the District Judge, East Godavari at Flajahmundry, dismissing the application i A No. 2623 of 2004 in O. S. No. 77 of 2004, filed under Section 8 of the Arbitration and conciliation Act, 1996 (for brevity "the Act"), seeking to refer the dispute to an Arbitrator as per Clause 17 of the Partnership Deed of m/s. Venkata Naga Devi Picture Palace, rajahmundry.

( 4 ) INASMUCH as the prime issue is - whether the matter is liable to be referred to an Arbitrator, we will first deal with the Civil revision Petition and the Civil Miscellaneous appeal later.

( 5 ) THE petitioner is defendant No. 1, respondent No. 1 is the plaintiff and respondent Nos. 2 and 3 are defendant Nos. 2 and 3 respectively in the suit.

( 6 ) FOR the sake of convenience, in this common judgment, the parties will be referred to as per their array in the suit.

( 7 ) THE suit was filed for winding up of the partnership firm and rendition of accounts.

( 8 ) THE Court below, having heard the learned counsel appearing for both sides in the above mentioned applications, passed the impugned common order, dt. 9-11-2004, allowing the application I. A. No. 2316 of 2004, filed by the plaintiff, while dismissing the application I. A. No. 2623 of 2003, filed by defendant Nos. 1 to 3.

( 9 ) CHALLENGING the said order of dismissal in application I. A. No. 2623 of 2004, defendant no. 1 filed the present Civil Revision Petition.

( 10 ) FOR better appreciation of the case, we deem it imperative to refer to the facts, in brief:the suit, as already noticed, is filed for winding up of the partnership firm and rendition of accounts. The backdrop for filing the suit is that one late Narayana Prasada sarma had three sons. Defendant No. 1 is the eldest son, Hari Ram Khaldelwal is the second son and Bhanwari Lal Sarma is the third son. All the three sons started an enterprise by lending a cinema theatre called Venkata naga Devi Picture Palace . Originally, the said business had been started, as a partnership, by all the three brothers in the year 1997. Subsequently, a fresh Partnership deed, dated 28-5-1992, was entered into among the three brothers having equal one- third share each. Thereafter, the third son, by name, Bhanwari Lal Sarma, died on 1-1-1999. Defendant Nos. 2 and 3 are his sons. The another brother Hari Ram khaldelwal also died on 18-1-2000. The plaintiff is the son-in-law of Hari Ram khaldelwal. His main contention in the suit is that he is the legatee under a Will executed by his father-in-law and hence he claims to become a partner of the firm. It is his further contention that as per the conditions of the partnership Deed, the firm does not dissolve on the death of any of the partners and that the same would continue with the legal representatives of the deceased partner or partners and, accordingly, defendant Nos. 2 and 3 became partners of the firm. He further claims that he automatically becomes a partner by virtue of the same clause in the partnership Deed with the further support of the Will said to have been executed by his father-in-law.

( 11 ) HE further contended that since the other partners have been preventing him from his participation in the business of the firm, he sought for dissolution of the firm since the partnership was one at Wi

































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