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1984 Supreme(Guj) 138

Gujarat High Court
Judgename :R.J.SHAH
MADHUKANTABEN NAGINDAS SHETH - Appellant
Versus
ARVINDLAL KANTILAL - Respondent
APPEAL FROM ORDER 110 of 1981
Decided On : 06/27/1984

Advocates Appeared: D.NANAVATI, M.D.PANDYA, S.K.ZAVERI

Headnote:

Arbitration Act 1940 – Section 34 – Indian Partnership Act 1932 – Sec. 42 – Remuneration for managing firm – Appeal from order arises at the instance of the original plaintiff who has challenged the order passed in Special Civil Suit by second Joint Civil Judge (Senior Division ) wherein the above applications preferred under sec. 34 of the Arbitration Act 1940 were allowed and the suit of the plaintiff was ordered to be stayed – Held, It was submitted that sec. 34 of the Arbitration Act does not cover agreements to arbitrate which are contained in the partnership deed – This submission is to be merely stated to be rejected – There are no such limitations under sec. 34 of the Arbitration Act – There is nothing in sec. 34 which points in the direction that arbitration clauses contained in partnership agreements are not covered by the same – It is not shown on authority by the learned advocate for the appellant that the said sec. 34 excludes agreements to arbitrate which are obtained in partnership deeds from its operation – Appeal Dismissed

R. J. SHAH, J.

( 1 ) THIS appeal from order arises at the instance of the original plaintiff who has challenged the order dated GIst October 1980 passed below Exhs. 9 and 13 in Special Civil Suit No. 27 of 1979 by second Joint Civil Judge (Senior Division ). Godhra wherein the above applications preferred under sec. 34 of the Arbitration Act 1940 were allowed and the suit of the plaintiff was ordered to be stayed.

( 2 ) IN order to appreciate the rival contentions it would be necessary to state a few relevant facts. The plaintiff is the widow of one Nagindas Kalidas Sheth who expired on 12/11/1978 The deceased husband of the plaintiff was a party to the deed of partnership dated 13/12/1977 of the firm which was carrying on business in the name and style of Messrs. Arvindlal Kantilal and Co. The plaintiff claims that she is the sole heir of the deceased. The plaintiff has alleged that when her husband expired he had as deposit an amount of more than Rs. 1 lakh in the said firm Rs. 1 20 0 as fixed capital and he was receiving some remuneration for managing the firm. The deceased husband was also entitled to a share of profits of the said firm till the time he expired. The plaintiff further alleges that after the death of her husband she had demanded the aforesaid from the defendants but no heed was paid to the same. Ultimately she served a notice dated 29/01/1979 through an advocate and defendant no. 1 replied to the same but the defendants had not paid any heed to her demands and had declined to account. The plaintiff has the-refore filed the aforesaid suit for accounts as well as for the appointment of a Receiver of defendant no. 1 firm in respect of which a new deed dated 18/12/1978 had been executed

( 3 ) EXH. 9 is an application which was preferred by defendant no. 2 under sec. 14 of the Arbitration Act praying for stay of the suit. Exhibit 13 is another application preferred by defendant no. 1 under the signature of defendant no. 2 as a partner wherein also it has been prayed that the suit be stayed under the said sec. 34. Both the applications are similar and raise the same contentions. The said applications were resisted by the plaintiff as per the reply Exhibit 14. The trial Court in the aforesaid circumstances had disposed of the said application in favour of the defendants ordering stay of the proceedings as per the order under appeal.

( 4 ) MR. S. K. Zaveri the learned advocate for the appellant has contended in the first place that as the suit has been filed against the new firm pursuant to the aforesaid partnership deed dated 18/12/1978 and not against the old firm wherein the deceased husband of the plaintiff was a partner there is no subsisting arbitration agreement between the parties at all and therefore no question of staying the suit under the said sec. 34 would arise. The order under appeal is therefore vitiated on this score. Reading the plaint as a whole it is evident that the said contention is without any foundation. If the suit was against the new firm alone then the plaintiff could not have prayed for accounts from the defendants up to the death of her husband from the new firm. The relief at paragraph 7. 1 of the plaint clearly shows that the plaintiff had asked for accounts from defendant no. 1 firm up to the date 12/11/1978 that is to say from S. Y. 2035 up to the date of her husbands death. Apart from that the relief at plaint paragraph 7. 3 is specifically against the new firm and a prayer is made for appointment of a Receiver of that firm. While asking for relief at paragraph 7. 1 of the plaint the plaintiff has not stated that the said relief for accounts should be given by the firm which had entered into a new agreement dated 18/12/1978 Furthermore in the title of the plaint the plaintiff has nowhere clarified that defendant no. 1 firm only means the firm which has come into existence pursuant to the partnership deed dated 18/12/1978 The plaintiff would not have failed to mention the same if the















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