The dissolution of a partnership firm necessitates balancing the interests of involved parties, ensuring fair access to firm assets and proper accounting of liabilities under the Indian Partnership Act.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)

O.M.P. (I)(COMM.) 315/2019 & I.A. 14094/2021 (u/S. 151 of the Code of Civil Procedure, 1908 on behalf of Respondents seeking modification of Order dated 12th October, 2021)

1. This Court, by way of a separate order passed today in ARB. P. 172/2020, has appointed a Sole Arbitrator for adjudication of disputes pertaining to and arising from a `Deed of Partnership' dated 05th July, 2014, executed between Late Mr. Chander Shekhar Dhawan [Respondent No. 1] and the Petitioner, in relation to the constitution of a partnership firm in the name and style of Dhawan Printers and Packers [Respondent No. 2]. The deceased partner is now represented through his legal representatives.

2. With the arbitral tribunal in place, the question that now arises is whether any interim measure is required to be put in place till such time the tribunal enters upon the reference.

Facts in brief:

3. Petitioner and Respondent No. 1 each held 50% share in Respondent No. 2 firm. Petitioner contends that he was initially being paid a sum Rs.20,000/- towards his share in the income of Respondent No. 2 firm. Later, this was reduced to Rs.10,000/- per month by Respondent No. 1, and stopped altogether from June, 2019. Now, despite repeated requests, Respondent No. 1 refuses to share the books of accounts and details of the assets of Respondent No. 2 firm. Petitioner was thus compelled to serve a notice dated 23rd July 2019 upon Respondent No. 1, stating his intention to dissolve Respondent No. 2 firm w.e.f. 31st August 2019 in terms of Clause 12 of the Partnership Deed, read with Section 43 of the Indian PARTNERSHIP ACT , 1932. He also called upon Respondent No. 1 to provide true and correct accounts and details of assets of Respondent No. 2 firm and also sought inspection of its books of accounts to enable him to settle the affairs of the Respondent No. 2 firm after its dissolution.

4. Although Respondent No. 1 agreed for dissolution, he never came forward to settle the dues and profits, and continued to exclusively utilize the assets of the Respondent No. 2 firm, without compensation to the Petitioner for his share. He also contends that all the assets of Respondent No. 2 firm - including its immovable properties and goodwill - were being utilized by Respondent No. 1 (and after his death, by his legal representatives) and they are refusing to divide the assets of Respondent No. 2 firm.

5. In these circumstances, this Court vide order dated 24th September 2019, restrained Respondent No. 1 in the following words:

"Respondent No. 1 shall not dispose of, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets of the firm except in the ordinary course of business such as payment of salary and statutory dues till the next date of hearing."

6. Then on 10th June, 2020, the Court passed an interim order directing Respondent No. 1 to make an ad hoc payment of Rs.2,00,000/- to the Petitioner. The Court is now informed that the said direction has been complied with.

7. Thereafter, subsequent orders over the course of several dates note that the parties unsuccessfully attempted mediation, and could not fructify an interim arrangement. As a result, substantial time has lapsed since the invocation of Section 9 of the Act.

8. On 14th October, 2020, the Court passed the following Order:

"3. Upon notice having been issued, a detailed reply has been filed by respondent no. 1, wherein there is no de