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Karnataka High Court
Judges : Krishnan
VITTALA NELLI - Appellant
Versus
GOPALAKRISHNA NELLI - Respondent
C. R. P. 6464 Of 1990
Decided On : 06/03/1992
Arbitration Act - Partnership Dispute - Section 34 - Summary of Acts and Sections: Section 34 of the Arbitration Act was invoked by the defendant seeking a stay of the suit. The court discussed the interpretation of 'taking any other steps in the proceedings' and its implications on the defendant's right to arbitration. The court also highlighted the erroneous application of law by the lower courts and the binding nature of the Supreme Court's decision on the matter.
Fact of the Case:
The plaintiff, the brother of the defendant, filed a suit seeking a declaration of no partnership with the defendant and permanent injunction. The defendant sought a stay of the suit under Section 34 of the Arbitration Act, which was dismissed by the lower courts.
Finding of the Court:
The court found that the lower courts erred in their application of the law and misinterpreted the defendant's actions as giving up the right to arbitration. The court also emphasized the binding nature of the Supreme Court's decision on the matter.
Issues: The issues revolved around the interpretation of 'taking any other steps in the proceedings' under Section 34 of the Arbitration Act and the erroneous application of law by the lower courts.
Ratio Decidendi: The court's decision was based on the erroneous application of law by the lower courts and the binding nature of the Supreme Court's decision on the matter.
Final Decision: The court set aside the orders of the lower courts and remitted the case back to the trial court for disposal in accordance with the law and the court's observations.
( 1 ) THE Revision petitioner is the defendant in O. S. 729 of 1989 on the file of Munsiff, Shimoga and being aggrieved by the dismissal of his application for stay of the suit under Section 34 of the Arbitration Act (for short 'the Act') by the learned Munsiff and also dismissal of the appeal preferred by him against that order by the learned Civil Judge, has preferred this Revision petition.
( 2 ) FOR the sake of convenience, I shall refer to the parties by virtue of their ranks before the trial court.
( 3 ) THE plaintiff who is no other than the brother of the defendant filed the suit seeking for a declaration that there is no partnership between him and the defendant, in respect of Nelli prakash Lodging and for permanent injunction restraining the defendant from dealing with 36 rooms of his (plaintiff's) share and also for recovery of damages of Rs. 42,000/- for a period of 7 months from 15-11-86 to 15-6-87. The case put forward by him in brief is as follows: the building in which Hotel Manohara Cafe and Nelli Prakash Lodging exist in Nehru Road, shimoga, belonged to his father Janardhana Nelli who made a settlement in respect of the suit property on 13-10-80 and divided the building into two portions and northern portion was given to the plaintiff and southern portion was given to the defendant. 36 rooms in the 1st and 2nd floor came to the share of the plaintiff and 24 rooms in the said floors came to the share of the defendant. To facilitate the running of the Hotel Manohara Cafe, the defendant leased his portion of the ground floor to him under lease deed dated 25-3-81 for a period of 5 years and after the expiry of the said period, it was extended for another period of 5 years, viz. , till 25-3-91. With reference to the lodging rooms situated in the 1st and 2nd floor, plaintiff and defendant entered into a partnership to run the lodging business and defendant was the person in charge of the partnership business and the said partnership was at will. In the year 1986 as differences arose between the parties, plaintiff issued notice dissolving the partnership, but the defendant had sent an untenable reply and therefore, he has been obliged to file this suit seeking for the relief of declaration and injunction referred to above.
( 4 ) THE suit was filed in the first instance in the Court of Principal Civil Judge, Shimoga, and it was registered as O. S. 155/87. When this suit was taken up after registration of the same on 4-7-87, Sri K. M. S. who had entered caveat on behalf of the defendant took notice and sought for time to file vakalath and objections to. A. Consequently, the case was adjourned to 18-7-87. On that date Sri K. M. S. filed power for the defendant and he also filed a Memo that he intended to file an application for stay of further proceedings in the case under Section 34 of the Arbitration act and sought for adjournment of the case to file the said application. The case was adjourned to 31-7-87 and on that date the Advocate for the defendant filed. A. II under Section 34 of the arbitration Act. This application of the defendant was opposed by the plaintiff and at that stage on account of the enhancement of the pecuniary jurisdiction of the Munsiff, the case came to be transferred to the file of Munsiff, Shimoga and registered as O. S. 729 of 1989. The learned munsiff after hearing both the sides dismissed. A. II by his order dated 26-3-90, The defendant aggrieved by this order of the learned Munsiff preferred MA 31/1990 and as the said appeal also came to be dismissed he has preferred the present Revision Petition,
( 5 ) BEFORE adverting to the several contentions advanced in this Revision Petition, it may be noticed that the defendant in the course of the affidavit filed in support of. A. II has asserted that the partnership entered into between him and the plaintiff had not come to an end and it could not be dissolved during the period of continuance of lease period of Manohara Cafe Hote
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