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1995 Supreme(AP) 205

Andhra Pradesh High Court
Judges : S.DASARADHA RAMA REDDY
Vijayalakshmi Jayaram - Appellant
Versus
M.R.Parasuram - Respondent
C.M.A.No.1048 of 1982
Decided On : 04-13-95
Advocates Appeared :
Mr. J.V. Suryanarayana Rao, Mr. T. Anantha Babu, Mr. E. Mahohar, Mr. M. Kesava Rao, Mr. M. Rama Rao

Headnote:ARBITRATION ACT, Sec.34 and INDIAN PARTNERSHIP ACT, 1932, Sec.44 - Partnership deed providing stipulation as to reference of a dispute to arbitrators - Arbitrator has power to decide whether Firm can be dissolved though partnership deed does not provide dissolution of firm at the instance of one of the partners - Suit for dissolution of firm on plea of allegation of fraud against one arbitrator - Court ordering stay of trial of suit - Not sustainable.

       CODE OF CIVIL PROCEDURE, Or.22, Rule 10-A - Death of party pending suit - Counsel for the party shall inform court about date of death and furnish particulars of legal representatives.

       HELD: It is open to the parties to provide in the partnership deed a clause for dissolution at the instance of any partner either at will or on any of the grounds stated in Section 44 of the Partnership Act. After all, the arbitrator has to decide the issue not only in accordance with the clause in the agreement but also applying the law applicable and governing rights and liabilities of partner. Thus the ingredients mentioned in Section 44 of the Partnership Act are also to be taken into account by arbitrator while deciding the point whether the firm is to be dissolved or not. Thus, under clause 26 of the partnership deed, the arbitrator has power to decide whether the firm can be dissolved event though there is no specific provision in the partnership deed providing for dissolution of firm at the instance of one of the partners.

       The lower Court while exercising its discretion has proceeded on the assumption that prima facie there is no case made out regarding fraud on the part of one of the proposed arbitrators the lower court to erred in going into this question at this stage which was not necessary for it to go into. As the appellant has made certain allegations against the lower Court ought to have seen that the very same cannot act as arbitrator.

       Under Order 22 Rule 10A of the Code of Civil Procedure, in the case of death of any party, it is the duty of the counsel appearing for such party to inform the Court about the death of his client whereupon the Court will give notice of such death to the other party to take necessary steps.

       

S. DASARADHA RAMA REDDI, J.

( 1 ) THE appellant, who is the plaintiff, filed O. S. No. 103 of 1982 on the file of subordinate Court, Tirupathi, on 23-6-1982 for dissolution of partnership firm pratap Talkies (hereinafter referred to as the firm ) and preliminary decree for rendition of accounts. The partnership which was reconstituted with effect from 1-7-1976, is not at will . Under clause 17 of the deed, Ex. B-1, the firm can be dissolved by common consent of all partners and no one person has a right by himself to dissolve the partnership. As per clause 19,"the partnership shall not be dissolved by reason of death, insolvency or retirement, expulsion of any of the partners and in case of death, retirement or insolvency or expulsion of any of the partners, the retiring partners or the person or the persons in whom the estate of such insolvent partner is vested, shall be entitled to or be liable for the share of capital and profits or share of loss of such partner, on the taking of accounts upto the daie of death, retirement or insolvency or expulsion as aforesaid and shall be entitled to his share of assets of the firm, as determined bythe auditors of the firm taking all circumstances to account and in the event there being any further dispute the same shall be settled by arbitration. "as per clause 26,"with regard to any dispute arising out of this agreement or of the interpretation of any clauses hereunder and in any matter of policy or decision, day to day working, administration, finance and future development programme, such dispute shall be referred to the arbitration of Mr. M. R. Pratap and a retired High Court Judge acceptable to both the families whose decision shall be final and binding on the firm". The partnership deed was executed by the appellant-Vijayalakshmi Jayaram through her power of Attorney m. R. Pratap, M. R. Rajakrishna, M. R. Parasuram, M. P. Ranjit, w. S. Sethunarayanababu, W. S. Surendra and Kamal Seetharam, Earlier, the parties were carrying on business along with Smt. Padmini Jayaraj under the name and style of pratap Talkies in pursuance of the partnership deed dated 6-11-1972. After Smt. Padmini Jayaraj expressed her desire to leave the partnership, the firm was constituted. The main business of the partnership consists of exhibiting films in Pratap Group of theatres viz. , Pratap, Mini Pratap and Ram Raj, situated at Tirupathi. Sethunarayana Babu, respondent No. 3 herein,was managing the affairs of the firm. Later, disputes arose among the partners, the appellant, M. R. Parasuram and M. R. Rajakrishna forming one group and the others forming the opposite group. The suit was filed by the appellant alleging that her then Power of Attorney Mr. M. R. Pratap in collusion with respondents 2 to 5 acted against her interests by raising loans allegedly for the purpose of partnership but for their personal benefit and by manupulating accounts of the firm. On 24-7-1982, respondents 1 to 5 filed I. A. No. 806 of 1982 under Section 34 of the Arbitration Act in the Court below for stay of the suit proceedings on the ground that the matter has to be referred to arbitration under clause 26 of the partnership deed. Appellant and respondent No. 6 opposed the application contending that the partnership deed does notprovide for dissolution at will, that the firm can be dissolved only on the intervention of court under Section 44 of the Partnership Act and for the grounds stated therein and hence the arbitrator has no jurisdiction to go into the question of dissolution. The lower Court allowed the I. A. , and stayed the trial of the suit. Against this order, the appellant has preferred this appeal.

( 2 ) PENDING appeal, respondent No. 4 died on 11-6-1985 and notice was ordered in C. M. P. Nos. 14170 to 14173 of 1986 to his wife and minor son who are sought to be brought on record as legal representatives. The wife who was served with notice on 15-4-1988 did not choose to file any appearance in the court or any



















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