IMPORTANT POINT
Expulsion of a partner must adhere to the partnership agreement and principles of natural justice, requiring good faith and adequate opportunity for response.

JUDGMENT :

I.P. MUKERJI, J.

1. All these appeals involve identical questions of fact and law and are being disposed of by this common judgment and order.

2. Each of the appeals arises out of a judgment and order dated 22nd December, 2023 made by a learned single judge of this court in an application under Section 9 of the Arbitration and Conciliation Act, 1996. By this judgment and order a show cause notice dated 20th October, 2023 issued by a partnership firm to one of its partners, Meraj Yusha asking him to show cause why he should not be expelled and the decision on it by the firm dated 15th November, 2023 expelling him from the partnership was stayed for a period of six weeks from the date of the order or until any contrary or further order was passed by the arbitral tribunal, to be constituted. The arbitral tribunal in terms of this order was to be constituted within four weeks of its pronouncement. It has been constituted. The learned arbitrator has entered upon the reference.

3. The dispute concerns a partnership firm M/s Serajuddin & Company. It has two offices, one registered, at P-16, 72, Bentinck Street, Kolkata- 700001 and the other described as the head office at 19/A Abdul Hamid Street, 1st Floor, Kolkata-700069.

4. Up to a point of time it had five partners Meraj Yusha, Sarosh Yazdani, Seraj Yusha, Mohammad Intekhab Alam and Hamida Khatoon. The firm was reconstituted from time to time, lastly on 18th July, 2019 with six partners Meraj Yusha, Hamida Khatoon, Mohammad Intekhab Alam, Sarosh Yazdani, Seraj Yusha and Mohammad Mofazzalur Rahman.

5. On 16th June, 2023 Mohammed Mofazzalur Rahman died, very prematurely.

6. The firm has a large business which started in or about 1957 of excavation and operation of mines of minerals and ores obtained on a lease from the government of the Balda Block Iron Ore mine in the district of Keonjhar, then Orissa and now Odisha.

7. Meraj Yusha, Sarosh Yazdani and Seraj Yusha are full blood brothers. They own shares in and are directors of Yazdani Steel and Power Limited (YSPL) Yazdani International Private Limited, Serajuddin & Co. Pvt. Ltd and F. Serajuddin Exports Pvt. Ltd. Each of the above three persons has 24.19% share holding in F. Serajuddin Exports Pvt. Ltd., 19.96% in Serajuddin & Co. Pvt. Ltd. and 32.81% in Yazdani International Private Limited. In YSPL, Sarosh Yazdani has 11.80% share, Seraj Yusha has 10.68% share and Meraj Yusha has 11.80% share.

8. After its reconstitution in 2019 the shares in the partnership were as follows:

9. Some clauses in the partnership deed are of vital importance.

10. Clause 14 stipulates that Mohammad Mofazzalur Rahman and Seraj Yusha would act as Joint Managing Partners of the firm with power to “negotiate and contract on behalf of the firm” with power under Clause 15 to delegate their functions to any other partner. Clause 18 authorizes the Joint Managing Partners to open and operate bank accounts in the name of the firm. Clause 20 deals with the power of the majority of the partners to expel a partner. Clause 21 authorizes the majority of the partners to take decisions.

11. There was unanimity and cooperation between the partners till the middle of 2023, when Mohammad Mofazzalur Rahman died. Clause 13 of the Partnership Deed provides that in case of death of a partner, his legal heirs would have the option of joining the partnership. According to Seraj and the other two partners Hamida and Intakaf Alam, (also referred to hereafter as the majority of the partners) reconstitution of the partnership was not an easy and quick process. It would take time. In that view of the matter, the Managing Committee wa