An arbitrator's decision on the method of accounting is an interim award and is liable to be set aside on the ground of legal misconduct and error of law apparent on the face of the award if the arbitrator pre-judges the issue of the correctness of the partnership accounts by accepting the book value of the assets without deciding the correctness of the books of accounts.

PRATIBHA BONNERJEA, J.

( 1 ) THIS application is for setting aside an interim award made and published by the arbitrator on 29. 3. 83.

( 2 ) THE disputes between the parties arose out of two partnership business carried on by the petitioner and the respondent Nos. 1, 2, 4, 5, 6 and 8 under the name and style of Messrs Govinda Sheet Metal Works and Foundary and Messrs Gopinath Paul and Sons pursuant to the deed of partnership deed dated 11. 4. 67. It is the petitioner's case that he has been completely ousted by the respondent partners and they have been misappropriating the partnership funds and manipulating the Books of Accounts by making false entries therein. It is further alleged that the respondent partners did not allow the petitioner to inspect the accounts excepting for a short period which he somehow or other managed to see. As it was not possible to carry on the said business anymore the petitioners took out an application under section 20 of the Arbitration Act for filing the arbitration agreement contained in the Partnership Deed and for referring the disputes regarding the accounts as well as for dissolution of the partnership. The said application came up for hearing on 11. 4. 79 and by consent of the parties an order was made appointing the present arbitrator to give decision on all the disputes in the petition exception the question of dissolution of the partnership but including the question as to how much would be payable to the petitioner by the respondent partners on proper accounting". The money due to the petitioner will have to be paid within the time to be fixed by the arbitrator. The arbitrator was further given liberty to engage a surveyor and an accountant, if he would think fit. It is, therefore, obvious that the petitioner did not press for the dissolution of the partnership and agreed to retire upon receipt of his just dues on proper accounting.

( 3 ) THE arbitrator entered upon the reference and at the meeting held on 26. 3. 81, the issues to be decided by the arbitrator were suggested discussed and settled and 7 issues were framed. The Issue No. 5 was as follows: - "do not the Books of Accounts of the firm depict the true and correct state of affairs?"

( 4 ) THE minutes of the said meeting also recorded:"the main issue in this discussion was whether in valuing the share payable to the claimant the accounting should be made strictly according to the provisions of the Partnership Deed and the parties could not reach an agreement on this question. The arbitrator fixed the hearing on this issue on Monday the 6. 4. 81".

( 5 ) IT is, clear, that the disagreement relating to the method of accounting cropped up incidentally on the basis of the words "proper accounting" mentioned in the order of reference dated 11. 4. 79. The parties while requesting the arbitrator to decide about the method of accounting did not refer any specific issue o this point as will be evident from the fact, that no such specific issue was framed or settled at the meeting of 26. 3. 81.

( 6 ) IT was contended by the petitioner, before the arbitrator that for taking proper accounts, the assets of the partnership must be valued on the basis of their market price and that was why a clear provision was made in the order of reference dated 11. 4. 79, for appointment of a surveyor. The respondents on the other hand contended that Clause 18 of the Partnership Deed provided the agreed method of valuation of assets and that should be strictly follows as the agreement was binding on the petitioner. For the sake of convenience, Clause 18 is set out below: -"in any case in which it may become necessary to value the assets of the business of the partnership, the same shall be taken at the written down book value as disclosed in the books of accounts on the relevant date after deducting therefrom the doubtful debts and the amount of liabilities shall also be taken at the book value as disclosed in the books of accounts after making necessa

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