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IN THE HIGH COURT OF BOMBAY
S.M. Jhunjhunuwala, J.
Harishankar Singhania and others.... Plaintiffs.
Versus
Dr. Gaur Hari Singhania others.... Defendants.
Chamber Summons No. 863 of 1992, in Arbitration Suit No. 1904 of 1992 decided on 13-2-1996.
Advocates appeared :
S.H. Doctor with D.J. Khambatta i/b Malvi Ranchoddas Co., for defendants 1 to 9 in support.
M.H. Shah with Ms. A. Wandrewala i/b Mulla Mulla Craigie Blunt Caroe, for defendants 10 to 17.
D.D. Madon with Milind Vasudeo i/b Hariani Co., for plaintiffs to show cause.
Section 20 of the Act deals with application to the file in Court arbitration agreement. As per Section 20, all or any of the parties to an arbitration agreement may apply to have it filed in Court and a reference made to arbitration. As per sub-section (2), the application under Section 20 must be in writing. Such an application, when filed, will be numbered and registered as a suit with the applicant as plaintiff and the other party as defendant. Mere numbering and registration of the application as a suit will not, however, change the nature of the proceeding and the application does not become a suit within the meaning of the Code of Civil Procedure, 1908 and clause XII of the Letters Patent. For the determination of the question whether a proceeding is a suit within the meaning of clause XII of the Letters Patent the test to be applied is not whether it is initiated by presentation of plaint, or by summons or by notice. But whether the proceeding is intended to terminate in a final adjudication of the rights by a decree in that proceeding. In the case of application under Section 20 of the Act, all that the Court is required to do is to pass an order filing the agreement and making an order of reference. The proceedings come to an end by the passing of the said order. The wordings of sub-section (2) of Section 20 that the application shall be numbered and registered as a suit do suggest that it is not a suit in the fullest sense of the term. Hence, an application under Section 20 of the Act is not to be treated as a suit within the meaning of clause XII of the Letters Patent and leave as contemplated in clause XII is not required to be obtained before filing such application. Accordingly, since no leave under clause XII of the Letter Patent was required to be obtained by the plaintiffs prior to filing of the application registered and numbered as Arbitration Suit No. 1904 of 1992 the question of revocation of such leave does not arise.
2. On the terms and conditions reduced to writing in the Deed of Partnership executed on 21st February, 1980, plaintiffs 1, 2 and 3 representing their respective Hindu Undivided Families, one Shripati Singhania and defendants 1, 4, 7 and 10 and original defendants No. 14 representing their respective Hindu Undivided Families entered into partnership for carrying on business in the firm name and style of 'Jugilal Kamlapath Bankers' (for short, 'the said firm'). The said firm held substantial assets and properties including immoveable properties, money in Bank account and shares in various companies. Such properties were situated at Bombay, Calcutta and Kanpur. Since disputes and differences arose amongst the partners in the said firm, the partners of the said firm agreed to settle their disputes by dissolving the said firm and dividing the assets of the said firm amongst themselves. A Deed of Dissolution dated 26th March, 1987 was executed and the said firm was dissolved with effect from 19th March, 1987. The said Deed of Dissolution contained an arbitration agreement. By and under the said Deed of Dissolution, the parties thereto agreed to divide and distribute various assets of the said firm as specified therein.
3. As per Clause 4 of the said Deed of Dissolution, the parties thereto agreed to distribute the immovable properties mentioned in Annexture II thereto free from all encumbrances in proportion to their respective shares in the partnership. The distribution was to be completed as soon as possible and the parties were to strive to accomplish the same by 31st May, 1987. By Clause 7(a) of the said Deed of Dissolution, the parties thereto agreed to do all such other acts, deeds and things and execute such further deeds and documents as might be necessary or required for more fully assuring the ownership of and exercise of the rights in relation to the assets to be divided and distributed amongst the partners and for completing the winding up of the partnership. By Clause 11 of the said Deed of Dissolution the parties thereto agreed to sign and execute all such further documents to do execute or perform such further acts or things as might be required to implement or give effect to the said Deed of Dissolution.
4. In pursuance of the said Deed of Dissolution, the immovable properties were to be distributed amongst the parties thereto in species free from all encumbrances. A Supplementary Agreement dated 28th March, 1987 was also executed wherein defendants 1, 4 and 7 took upon themselves the responsibility of obtaining vacant possession free from encumbrances in respect of Kanpur Properties and the defendant No. 10 and original defendant No. 14 took upon themselves the responsibility of obtaining vacant possession free from encumbrances in respect of the said properties. In the facts of the case, it appears that the said Supplementary Agreement was executed in part implementation and in part performance of the said Clauses 4, 7(a) and 11 of the said Deed of Dissolution relating to the winding up of the affairs of the said partnership. It may be mentioned here that the said Shripati Singhania who was then partner in the said firm died on 4th December, 1988 leaving behind him plaintiffs 4, 5, 6 and 7 as his heirs. The original defendant No. 14 died on 22nd June, 1992. According to the plaintiffs, the defendants 14-A to 14-C are the only heirs of the original defendant No. 14 as per law of interstate succession. However, in view of the Last Will and Testament left by the original defendant No. 14, the defendants 14-A to 14-D are executors in his estate.
The disputes and differences having arisen, the plaintiffs intended to file an application under the prov
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