IMPORTANT POINT
Legal heirs of a deceased partner are bound by the arbitration clause in the partnership deed, allowing disputes to be referred to arbitration despite the death of a partner.

JUDGMENT :

Robin Phukan, J.

Heard Mr. P.J. Saikia, learned Senior Counsel, assisted by Mr. A.K. Gupta, learned counsel for the appellant and Mr. S. Dutta, learned Senior counsel, assisted by Ms. S. Mochahari, learned counsel for the respondents.

2. This appeal, under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996, is directed against the order dated 09.08.2024, passed by the learned Civil Judge (Senior Division), Dibrugarh, in Misc. (J) Case No. 206/2024, arising out of Commercial Suit No. 02/2024.

3. It is to be noted here that vide impugned order dated 09.08.2024, the learned Civil Judge (Senior Division), Dibrugarh (‘trial Court’, for short) had dismissed the Petition No. 3608/2024, filed by the appellant/defendant No. 1, under Section 8 of the Arbitration and Conciliation Act, 1996 (‘Act of 1996’, for short), praying for dismissal of the analogous Commercial Suit by referring the parties to go for arbitration, under Section 8 of the Act of 1996.

4. The background facts, leading to filing of the present appeal, are briefly stated as under :

“The respondents Nos. 1 to 4 herein as plaintiffs have instituted a Commercial Suit No. 02/2024, against the present appellant and proforma respondents. The claim of the respondents of the aforesaid Commercial Suit is that they are legal heirs and representatives of Late Sampat Lal Verma and that there was a partnership firm in the name and style of M/s Verma Market, which came into existence on 01.04.1984 and thereafter, continued vide deed of partnership, dated 01.04.1992, as per terms and conditions incorporated in the said partnership deed, and that the appellant, along with Lalmati Devi Verma and Sampat Lal Verma, were the partners of the said partnership firm having 1/3rd share each in the said partnership firm and the said firm constructed multi storey RCC buildings on different plots and also own different businesses including Hotel Maurya, and that one of the partners, namely, Lalmati Devi Verma expired on 24.12.2022, and after the death of Lalmati Devi Verma, the partnership firm continued with two partners viz. the appellant and Sampat Lal Verma and since the legal heirs of Lalmati Devi Verma were not interested to take any share in the partnership firm, they relinquished their share in favour of the two continuing partners. Thereafter, Sampat Lal Verma expired on 21.11.2023 and on the demise of Sampat Lal Verma, the partnership firm stands dissolved automatically on 21.11.2023, as one of the two remaining partners expired and that the plaintiffs being the legal heirs of deceased partner, namely, Sampat Lal Verma, were not interested in continuing the firm or constitute a fresh partnership firm and as such, on 26.01.2024, the plaintiff No. 1 requested the appellant to render the accounts of the firm and disburse half share of the surplus and property of the partnership firm, but the appellant refused to do the same. It is also stated that even after dissolution of the firm, the appellant willfully and persistently committed breach relating to the affairs of the dissolved partnership firm and also utilized the money of the partnership firm for his personal use and that the appellant is also planning to grab the entire share and property of the partnership firm by manipulating the accounts of the firm and that the aforesaid illegal acts of the appellant casted a cloud of doubt in the mind of the plaintiffs about their half share in the property/surplus of the dissolved partnership firm and therefore, prayed for a decree of declaration that the partnership firm, namely, M/s Verma Market had already been dissolved on the death of Sampat Lal Verma or alternatively a decree for dissolution of the partnership firm and for declaration that the plaintiffs are entitled to half share of the surplus and proceed of the assets and properties of the firm after meeting the liabilities of the firm and for disbursal of the half share of partnership firm and for appointment of receiver