High Court Of Delhi
ASHOK KUMAR MITTAL - Appellant
Versus
ASHWANI KAPOOR - Respondent
O.M.P. : 49 of 2005
Decided On : 05/27/2005
Arbitration and Conciliation Act - Dissolution of Partnership - Sections 9, 43, 45, 47, 53 of the Indian Partnership Act - Summary of Acts and Sections
Fact of the Case:
Partnership formed to run a hotel. Disputes arose, leading to dissolution of the partnership. Disputes referred to arbitration. One partner sought protection to continue running the hotel, while the other sought to restrain him.
Finding of the Court:
Partnership dissolved, no partner has the right to continue the business to the exclusion of others. Appointment of a Receiver necessary to protect the interests of the ousted partner. Receiver appointed to wind up the business.
Issues: Dispute over the right to continue running the hotel after partnership dissolution.
Ratio Decidendi: After dissolution, no partner can continue the business to the exclusion of others. Appointment of a Receiver is necessary to protect the interests of the ousted partner.
Final Decision: Partnership dissolved, Receiver appointed to wind up the business. Petitioner restrained from running the business to the exclusion of others.
( 1 ) THIS order shall dispose of OMP No. 49/2005 and OMP No. 121/2005 which are petitions under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the act only) filed by the partners, who were running a hotel named ;hotel Ashoka Continental at 8370, Arakashan Road, Paharganj, Delhi.
( 2 ) IN OMP No. 49/2005, the petitioner, ashok Kumar Mittal, who continues to be in possession of the hotel and running its business seeks protection, as an interim measure, restraining the other partner and his son from obstructing him in running the hotel and also seeks to restrain them from getting revoked the license granted to the partnership firm for running the hotel.
( 3 ) ON the other hand, the other two partners Ashwani Kapoor and his son Naresh kapoor, who are the petitioners in OMP No. 121/2005, seek interim orders to restrain ashok Kumar Mittal, from running the business of the said hotel and using the goodwill, assets and properties and removal of the assets of the partnership business, books of accounts etc. . till the Award is made and published by the Arbitrator.
( 4 ) THE facts relevant for the disposal of these two petitions, briefly stated are that the three partners, Ashok Kumar Mittal, ashwani Kapoor and his son Naresh Kapoor, entered into a partnership for running a hotel under the name and style of hotel ashoka continental vide a Partnership Deed dated 1st April, 1994. Ashok Kumar Mittal as Karta of HUF was having 50% share and ashwani Kapoor and his son Naresh Kapoor were having 25% share each therein. Therefore, in a way, both the groups were having 50% share each. The wives of Ashok Kumar mittal and Ashwani Kapoor purchased properties No. 8370 to 8374 and 8376, arakashan Road, Ram Nagar. Paharganj, new Delhi, from various persons and after making additions, alterations, renovations therein developed it as one single building which was leased to the partnership firm vide a Lease Deed dated 1st April. 1994. The said composite building was re-numbered as 8370, Arakashan Road, Paharganj, New delhi. The business continued for about 11 years but then certain disputes and differences arose between the partners on account of which Ashwani Kapoor and his son served a notice dated 27th January, 2005, upon ashok Kumar Mittal dissolving the partnership firm and calling up him to either purchase the entire unit from them or hand over the unit to them and in case it was not feasible, go to Arbitration for adjudication of disputes in terms of arbitration clause contained in the Partnership Deed. It is stated that an Arbitrator has already been appointed who is seized of the matter.
( 5 ) THE petitioner, Ashwani Kapoor and his son Naresh Kapoor in OMP No. 121/ 2005, pray for restraining Ashok Kumar mittal for carrying on the business of the aforesaid hotel inasmuch as he is indulging in illegal activities and using the premises, cash and assets of the partnership firm to their exclusion which is likely to cause irreparable loss/injury to them.
( 6 ) ON the other hand, petitioner Ashok kumar Mittal in OMP No. 49/2005. who is in control of the hotels, pleads that there are no good grounds for stopping the running business as the accounts between the partners would be settled in the course of the arbitration proceedings and any partner, who is in a position to pay to other partners would be permitted to run the hotel.
( 7 ) I have heard learned counsel for the parties and gone through the records.
( 8 ) LEARNED counsel for the petitioners, ashwani Kapoor and his son Naresh Kapoor, in OMP No. 121/2005 contends that after the dissolution of the partnership, which is admitted, the other partner, Ashok Kumar mittal, has no right to continue the business of the erstwhile partnership to the exclusion of other partners and only winding up proceedings have to be undertaken in terms of Sections 43, 45, 47 and 53 of the indian Partnership Act. It is argued that sections 41 (c) and 41 (e) do not
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