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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, V.G. BISHT, JJ.
Hasina Mohamed Shafik Laljee - Appellant
Versus
Fatima Correa Nee Fatima Yakubali - Respondent
Appeal No. 28 of 2020 In Arbitration Petition No. 792 of 2018 With Interim Application (L) No. 9905 of 2020
Decided on : 22-06-2021
Arbitration and Conciliation Act, 1996 - Sections 37, 34, 9 - Partnership Act - Sections 37, 46, 48, 50 - Deed of Partnership - Misrepresentation - Collection of rent in name of firm - No accounts of Profits Provided - Arbitration Award - Challenged - Arbitral Tribunal made an award declaring that respondent (original claimant) is entitled to 51% share in profits of the Dharavi property as co-owner and will continue to receive her share in the profits till winding up in terms of clauses 13 and 14 in the Deed of Partnership - Arbitral Tribunal also directed appellants to pay to respondent 51% of profits from Dharavi property from 1982 till date of award and thereafter till winding up - Arbitral Tribunal did not grant any interest in favour of the respondent till date of award. - Arbitral Tribunal however granted interest at rate of 9% per annum in favour of respondent on share of profits till final payment and also awarded cost quantified at Rs.20 lacs in favour of the respondent. - Being aggrieved by said Arbitral award appellants filed arbitration petition before this Court. - Single Judge dismissed said arbitration petition filed by appellants. - Being aggrieved by said judgment appellants preferred this appeal under section 37 of Arbitration Act.
Finding of the Court:
Senior counsel for appellants could not point out any infirmity from impugned judgment rendered by Single Judge refusing to interfere with arbitral award. - Single Judge also has dealt with all arguments advanced by parties in said detailed judgment and has rightly refused to interfere with impugned award. - Appellants themselves had admitted in statement of defence that said Dharavi property was acquired by Partnership Firm and that said Yakubali and Mohamed Shafik were co-owners of said property. - There was thus no lis between parties in so far as issue whether said Dharavi property was an asset of suit firm and that said Yakubali and Mohamed Shafik were owners of said property. - Even if it is considered that said Dharavi property was an asset of suit firm and both partners were entitled to share in said asset, no partner can claim any specific portion of said property is concerned, though this submission has merit, actual division of said Dharavi property can be applied in execution proceedings - Scope of powers of Appellate Court under Section 37 of Arbitration Act are more limited than limited powers of the Court hearing the petition under Section 34 of Arbitration Act. - No case is made out by appellants for exercising such limited powers by Appellate Court in this appeal to interfere with impugned award as well as impugned judgment rendered - Impugned award passed by Arbitral Tribunal declaring that respondent herein (original claimant) is entitled to 51% share in Dharavi property as Coowner is upheld. - Impugned direction in arbitral award that respondent herein would continue to receive her share in the profits till winding up in terms of clauses 13 and 14 of Deed of Partnership and that appellants to pay respondent 51% of the profit from Dharavi property from 1982 till date of award and thereafter till winding up is set aside since account between partners are not settled by Arbitral Tribunal. - Award directing appellants to pay interest on that share of profits till final payment from date of award is set aside.
Result: Appeal Partly Allowed
JUDGMENT :
R.D. Dhanuka, J. :
By this Appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘Arbitration Act’), the appellants have impugned the order dated 11th July, 2019 passed by the learned Single Judge dismissing the Arbitration Petition filed by the appellants under Section 34 of the Arbitration Act. By consent of parties, appeal was heard finally.
Some of the relevant facts for the purpose of deciding this Appeal are as under :-
2. The appellants were the original petitioners in the Arbitration Petition filed under Section 34 of the Arbitration Act and the respondent was the original respondent in the Arbitral proceedings. Before October 1960, Mr. Mahomedali Esmail, the grand father-in-law of the respondent no.1 and great grand father of the appellant nos. 2 to 4 were carrying on the business of tanners, export and import and were dealers in hides and skin, shares and other allied lines under the name and style of M/s. Mohamedali Esmail, a sole proprietary concern. Vide a Deed of Partnership dated 9th November, 1960, Mr. Mohamedali Esmail constituted a partnership firm with Mr. Yakubali Mohamedali Sewjee (hereinafter referred to as ‘Yakubali’) w.e.f. 21st October, 1960 for carrying out the same business in the same name.
3. On 17th January, 1961, M/s. Mahomedali Esmail entered into an agreement and acquired all the assets and liabilities of the said sole proprietary concern. After the death of Mr. Mahomedali Esmail on 26th April, 1965, Yakubali invited his nephew, one Mr. Mohamed Shafik Habib Hajibhoy Laljee to join him as a partner to carry out similar business. Vide a Deed of Partnership dated 1st June, 1965, Yakubali and Mohamed Shafik constituted a registered partnership firm in the name and style of M/s.Mohamedali Esmail. The said firm carried out the business of import and exports of hides & skin and various other items.
4. It is the case of the respondent that the Yakubali solely contributed to the capital of the said firm including money, name, client base, goodwill of the previous firm etc. Yakubali and Mohamed Shafik shared the profits and losses in ratio of 51% - 49% respectively. The said partnership was a partnership at will. It is the case of the respondent that the business of the said firm was carried out from 703, Stock Exchange Tower, Dalal Street, Mumbai - 400 001. The said premises were owned by the Yakubali and he allowed the said partnership firm to use the same for carrying out its business.
5. The respondent (original claimant) is the grand daughter and the appellant nos.2 and 3 are great grand children of one late Mr. Mohamedali Esmail. The appellant no.1 is the respondent’s deceased cousin’s wife. The appellant nos. 2 and 3 are the daughters of the appellant no.1. It is the case of the respondent that after her marriage on 16th January, 1974, she shifted permanently to Kuwait with her husband. The respondent lived in Kuwait for almost four decades and occasionally visited her parents in Mumbai.
6. It is the case of the respondent that vide Indenture dated 28th February, 1978, (i) Salmabai Abdullamia, (ii) Amin Bibi Shaik Ahmed, (iii) Hafsabibi Abdul Hafiz, (iv) Fatmabibi Shaik Mahmud, (v) Rukiya Bibi Shaik Mohamed and (vi) Rashidabibi Abubakar styled as ‘the Vendors’ granted, sold, assigned, released and conveyed into the said partnership firm styled as ‘the Purchaser’ (i) Government land situate in the Registration District of Sub-Registrar of Bombay City and Bombay Suburban at Dharavi, Mahim bearing Collector’s Old Nos. 4, 16 and 27 New Nos. 16493, A/16493, 1505, B/16505 and 16517, New Survey Nos. 1-A/3743, 1-2/3743, 1/3742, 4/3741, 2-3/3741 and 1/3742 and bearing C.S. No. 342 (part) admeasuring approximately 3329 sq. yards equivalent to 3042.7 sq. mtrs. or thereabouts together with tenements and dwelling houses standing thereon; and (ii) Leasehold land situate in the Registration District of Sub-Registrar of Bombay City and Bombay Suburban at Dharavi, Mahim bearing
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