The main legal point established is that the suit property did not form part of the partnership concern's assets, and the petitioners failed to demonstrate the respondent's conduct as detrimental to the partnership's interest.

Sanjay Karol, J-Shri Deepak Arora and Shri Jatinder Bir Singh (hereinafter referred to as the petitioners) have filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) against Shri Vijay Khanna (hereinafter referred to as the respondent).

2. The petitioners are claiming relief to the effect that the respondent be restrained from disposing, transferring, alienating etc. the physical possession of the partnership property bearing Khasra No.172, 173, 239, 237 and 240, measuring 0-15-24 hectares, situated in Mohal Kand Mauza Khanyara, Tehsil Dharamshala, District Kangra, (hereinafter referred to as the suit property) upon which hotel in the name and style of M/s Snow Hermitage Resorts is being run. The petitioners are also seeking appointment of a Receiver to take possession and charge of the suit property along with the superstructure; an independent auditor be appointed to audit the accounts of the partnership firm and the respondents be restrained from encashing the FDRs issued by the State Bank of India, Dharamshala.

3. The petitioners have alleged that in terms of deed of partnership dated 26.3.2003 petitioners and the respondent became partners (Shri Deepak Arora -25%, Shri Jatinder Bir Singh – 25% and Shri Vijay Khanna – 50%) in the entire hotel project set up by the respondent. All the partners were given the status of working partners and were entitled to draw salary. The respondent, however, was given the responsibility of actively conducting the day to day working of the business and smooth running of the hotel project. In terms of deed of partnership, the respondent had to sell to the petitioners, 50% share in the hotel project including land, super structure, furniture and fixtures thereupon. The respondent failed to comply with the statutory formalities of taking permission under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter referred to as the Tenancy Act). The petitioners have put in money in the project, the respondent is acting in breach of terms and conditions of the partnership deed and his conduct is detrimental to the rights and interest of the petitioners. He had been siphoning off huge amount of money received by him from various sources in cash. Since June, 2006 the petitioners have not received any profit or salary or remuneration from the partnership business. The respondent had borrowed Rs.32 lacs from the State Bank of India, Dharamshala Branch in which the petitioners became co-borrowers and the suit property alongwith the hotel/super structure was also mortgaged. With the efforts of the petitioners, the entire amount stood paid but now the respondent is attempting to take back the documents of title with dishonest intention of alienating the suit property which in fact is the asset of the partnership concern. Vide letter dated 24.8.2007 petitioners informed the Bank and requested them not to release the documents of title to the respondent. The respondent has transferred funds from the partnership account and got prepared FDRs amounting to Rs.7,40,000/- from the State Bank of India. The petitioners having been left with no option dissolved the partnership vide letter dated 26.5.2008 and vide legal notice dated 20.6.2008, Clause 16 of the partnership deed containing an arbitration clause was invoked.

4. The respondent has failed to (a) file statutory returns under the income tax, sales tax, luxury tax laws etc. (b) siphoned off funds received from the travel agent and further attempted to remove the already appointed travel agent with a person convenient to him (c) the Income Tax authorities have taken cognizance of the transaction entered into by the respondent in cash and as such issued notice dated 25.4.2008 (d) the affairs of the partnership business is being carried out in a manner which are detrimental to the interest of partners. The same is evident from the fact that three cheques issued by