PATNA HIGH COURT
Sarjoo Prasad and C.P.Sinha JJ.
Mahendra Lal Kushiary
Versus
Gurdeyal Singh
Civil Revision No. 694 of 1950 ;
Decided On : DECEMBER 7, 1950
PARTNERSHIP ACT - S. 69 - APPLICATION - ARBITRATION - S. 8 - DISSOLUTION OF PARTNERSHIP - SUIT FOR - NOT BARRED - APPLICATION FOR REFERENCE TO ARBITRATION - MAINTAINABLE.
Fact of the Case:
A partnership business was run by Mahendra Lal Kushiary and Gobinda Chandra Chakravarty. Later, Gurdeyal Singh joined the partnership in place of Gobinda Chandra Chakravarty. Differences arose between the partners, and Mahendra Lal Kushiary sent a notice to Gurdeyal Singh dissolving the partnership. He also filed a title suit for dissolution of partnership and accounting. Gurdeyal Singh applied to the court for referring the matter to arbitration under S. 8 of the Arbitration Act. The court allowed the application and referred the matter to arbitration. Mahendra Lal Kushiary filed an application for review of the order, contending that S. 69 of the Partnership Act barred the application for arbitration. The court dismissed the application for review.
Finding of the Court:
The court held that S. 69 of the Partnership Act was not a bar to the application for arbitration. The court observed that S. 69 (3) (a) of the Partnership Act provides an exception to the bar imposed by S. 69 (1) and (2) in respect of suits for dissolution of partnership and accounting. The court further held that the application for arbitration was maintainable under S. 8 of the Arbitration Act.
Issues: Whether S. 69 of the Partnership Act barred the application for arbitration.
Ratio Decidendi: The court held that S. 69 of the Partnership Act was not a bar to the application for arbitration because: * S. 69 (3) (a) of the Partnership Act provides an exception to the bar imposed by S. 69 (1) and (2) in respect of suits for dissolution of partnership and accounting. * The application for arbitration was maintainable under S. 8 of the Arbitration Act.
Final Decision: The court dismissed the application for revision with costs.
C.P.Sinha, J.
1. This is an application in revision on the following facts. There was a partnership business between one Mahendra Lal Kushiary, the present petitioner, and one Gobinda Chandra Chakravarty for the purpose of running a motor business in the name and style of Sarju Motor Company. Later on Gurdeyal Singh, opposite party, agreed to join the partnership business in place of Gobinda Chandra Chakravarty, and a deed of agreement dated 17-3 1948, was executed by the present opposite party. One of the conditions of the agreement was that in case of any dispute or difference between the parties the matter would be referred to arbitration. Subsequently, difference arose between the parties and the petitioner Mahendra Lal Kushiary sent a notice to the applicant on 17-1-1950 dissolving the partnership, and later on he also filed a title suit No. 44 of 1950 in the Court of the Munsif, Hazaribagh Gurdeyal Singh, the opposite party filed an application before the learned Subordinate Judge for referring the matter in dispute to arbitration under the provision of S. 8, Arbitration Act, and the learned Subordinate Judge allowed the application on hearing the parties, and decided to refer the matter to arbitration, and the parties were called upon to suggest names of arbitrators within a time fixed by the Court, and the suit pending before the learned Munsif was stayed.
2. The present petitioner having felt aggrieved by the order of the learned Subordinate Judge referring the matter in dispute to arbitration filed an application in revision in this Court (civil Eevision No 496 of 1950) This application however, was dismissed on 3-8-1950. Having failed in this Court, the petitioner filed an application under S. 151, Civil P. C. in the Court of the Subordinate Judge, Hazaribagh, for reviewing the order of 12 7-1950, sending the matter to arbitration. The ground of review made out in the application was that as the partnership consisting oi the petitioner and the opposite party was not a registered partnership under the provisions of the Indian Partnership Act (IX of 1982), S. 69 of that Act was a bar to the application for sending the matter in dispute to arbitration, and that, therefore, the order of 12-7-1950, passed by the Court below was without jurisdiction. This application in review has been dismissed by the Court below and hence this application in revision to this Court.
3. It hasbeen argued, as was argued in the Court below, that S. 69 of the Partnership Act was a bar to the application of the opposite party for sending the matter in dispute to arbitration and the order sending the same to arbitration was without jurisdiction. The learned counsel appearing for the opposite party has argued, firstly, that in view of the order in civil Revision No. 496 of 1950 of this Court no such application for review of the order of the Court below, dated 12 7-1960, lay in the Court below, and, secondly, that S, 69 of the Indian Partnership Act has no application to the facta of the present case.
4. It is true that the order, sending the matter in dispute between the parties having been affirmed by the order of this Court in the afore Said Civil Eevision No. 496 of 1950, the decision of the learned Court below dated 12-7 1950, was binding between the parties thereto as it became final when the application in revision against that order waB dismissed by this Court, and in that view of the matter it was not open to the petitioner to re-open the matter again. But the matter in regard to the bar of S 69 of the Partnership Act has been argued by both the parties, and I consider that to decide the case finally, it is necessary to give our opinion in regard to the application or non-application of S. 69, to the facts of the present case.
5. Sec. 69 (3) of the Partnership Act lays down:
"The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shal
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