The dissolution of a partnership firm can be decided by an arbitrator if the arbitration agreement provides for the reference of all disputes and questions arising during the partnership or afterwards to arbitration.

( 1 ) THIS is an application, basically, for the purpose of passing an order for dissolution of the registered partnership firm, M/s Bansal Distributors and further order for the purpose of winding up of the affairs of the partnership firm along with various incidental prayers including injunction etc.

( 2 ) THIS application is made under a suit being C. S. No. 527 of 2000.

( 3 ) IN the said suit, an application was made for the purpose of various interlocutory reliefs.

( 4 ) ULTIMATELY, by an order dated 28th February, 2000, a Single Bench of this High Court was pleased to refer the disputes and controversies between the parties involved in a suit to an appropriate forum in view of the Arbitration Clause for appointment of arbitrator with a rider that the arbitration clause does not provide the machinery for referring the disputes for adjudication by the Arbitrator as no specific name has been mentioned nor the same has been appointed.

( 5 ) FROM such order, an appeal was preferred by the petitioner herein when an Appeal Bench of this Court by an order dated 28th March, 2000, gave directions to the petitioner to make an appropriate application for interlocutory relief before a Single Bench of this Court.

( 6 ) THE respondent took the point that when an order was passed in an application under Section 8 of the Arbitration and Conciliation Act, 1996, no appeal can be preferred from such order.

( 7 ) IN this context, from annexure to the copy of the application under Section 8 of the Act as handed over to court, I find the arbitration clause which is as follows :"15. All disputes and questions whatsoever which shall arise during the partnership or afterwards, between the partners or their respective representative or between one partner and the representative of the other partner relating to the business of affairs of the firm or the rights, duties and liabilities of any person under this instrument, shall be referred to one Arbitrator if the parties agree upon one, otherwise in accordance with and subject to the provisions of the Arbitration Act, 1940. "

( 8 ) THEREFORE, now, it is crystal clear that the power to refer parties to arbitration when there is an arbitration agreement available before the judicial authority before which such action is brought has been applied hereunder by the Single Bench of this Court from which such appeal was preferred.

( 9 ) THEREFORE, any interlecutory application as directed by the appeal court is in the nature of interlecutory relief arising out of such arbitration proceedings as to be initiated or has been initiated. By virtue of such appeal court's order, the petitioner herein, cannot take a chance of making an interlecutory application in the suit itself.

( 10 ) THE petitioner has taken a plea that there are two parts of the decision to be made in the suit. One is in respect of dissolution of partnership firm and other is dispute as to the accounts etc.

( 11 ) THEREFORE, such dissolution of the firm by virtue of Section 44 of the Indian Partnership Act, 1932, cannot be regarded as a dispute before the Arbitrator. But for such reason application has to be made under the Arbitration and Conciliation Act, 1996,either before the Court or before the Arbitrator, but once the dispute in respect of the parties pursuant to the direction of the Court under Section 8 of the Act has been referred for arbitration, suit court has no business to interfere with the same as if the suit Court has still seisin in respect of the suit.

( 12 ) MOREEVER, the respondent has pointed out that once it is decided by the Single Bench in the interlocutory application in connection with the suit that the disputes should be referred to arbitration, the same cannot be re-opened in another interlocutory application before the suit Court. Such action is hit by principles of res judicata or analogous thereto.

( 13 ) THE petitioner has contended that the aforesaid arbitration clause speaks for the