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2010 Supreme(Mad) 3222
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE G. RAJASURIA
Valan @ R.G. Thirumavalavan, Pookollai, Peraurani Taluk, Thanjavur Dist
Versus
ARR Vee Pipes & Others
A.No.3765 of 2009 and O.A.No.105 of 2010
Decided On :08-03-2010
For the Petitioners:T. Girija, N.S. Nandakumar & N. Krishnakumar, Advocates.
For the Respondent:R. Thiyagarajan, Vasudha & M. Palanivel, Advocates.
Partners entitled to seek interim measures under Section 9 of the Arbitration and Conciliation Act to protect partnership interests and resolve disputes through arbitration.
Headnote:
Arbitration and Conciliation Act - Partnership Dispute - Section 9(ii) (a), 9(ii) (b), 9(ii) (c) - Summary of Acts and Sections
Fact of the Case:
Partnership dispute involving allegations of siphoning off funds and interference with banking operations. Dispute arose from a reconstituted partnership and allegations of misrepresentation and non-cooperation.
Finding of the Court:
Partners entitled to interim measures to protect the partnership's functioning. Appointment of an Advocate Commissioner to take inventory of business records. Emphasized adherence to partnership agreements and resorting to arbitration for dispute resolution.
Issues: 1. Entitlement to appoint an Advocate Commissioner for inventory of business records. 2. Entitlement to interim injunction to restrain interference with banking operations.
Ratio Decidendi: Partners entitled to seek interim measures under Section 9 of the Arbitration and Conciliation Act to protect partnership interests. Disputes to be resolved through arbitration as per partnership agreements.
Final Decision: Partners entitled to interim measures for protection of partnership interests. Appointment of Advocate Commissioner for inventory. Emphasis on adherence to partnership agreements and resorting to arbitration for dispute resolution.
G. RAJASURIA, J.
1. Broadly but briefly, narratively but precisely, the relevant facts absolutely necessary and germane for the disposal of these two applications would run thus:
(a) A.No.3765 of 2009 has been filed seeking the following relief: - To appoint an Advocate Commissioner to visit the registered office off the 1st respondent firm at No.22, Old No.38, III East Street, Kamarajar Nagar, Thiruvanmiyur, Chennai 600 041, Factory premises at Manapet, Bahoor Commune, Pondicherry and Branch office at No.17, Shanmugam Road, Vilva Nagar, Manjakuppam, Cuddalore 1 and to take inventory of bill books, day books and ledgers of accounts, invoices and files, licence files relating to Pollution control, ESI, PF, Employees under factory ac and other labour laws, sales tax and income tax files, delivery registers, inward and outward gate pass registers, production charts, labour contract files, suppliers contract files, bank loan files and bank pas books with transaction details, stocks of finished goods, raw materials, goods in process and all other relevant details communications and records of the business and to submit a report to this Honble Court so as to secure and protect the interest of the partners in general and the applicant as a partner in particular in the partnership business of the 1st respondent firm as an interim measure before arbitration proceedings as provided under section 9(ii) (a), 9(ii) (b), 9(ii) (c) of the Arbitration and Conciliation Act, 1996 pending disposal of arbitration proceedings. (extracted as such)
(b) O.A.No.105 of 2010 has been filed seeking the following relief: -
To pass an interim injunction by restraining the 1st and 2nd respondents from interfering with the banking operation of the applicant in its Cash Credit Account No.4757 held in Indian Overseas Bank, Indira Nagar Branch, Adyar, Chennai 600 020 by permitting the 1st applicant herein to sign the cheques and operate the account subject to such directions of this Honble Court. (extracted as such)
(c) Counters have been filed by the respondents concerned in the respective applications, disputing and gainsaying, refuting and denying the averments in the affidavits accompanying the applications.
2. The points for consideration are as to:
1. Whether the applicant in A.No.3765 of 2009 is entitled to get a Commissioner appointed for the purpose which is found spelt out in the said application?
2. Whether the applicants in O.A.No.105 of 2010 are entitled to get an injunction as prayed for?
3. The gist and kernel, the pith and marrow of the relevant facts would run thus:
(a) There emerged a partnership among four persons, namely, Ramachandran, Valavan @ Thirumavalavan, Jayaraman and Ravi kumar, vide partnership deed dated 15.12.2004. The purpose of the partnership was to run a factory relating to manufacture of stone pipes. According to Ramachandran, the said partnership got dissolved under certain terms and conditions and it was reconstituted on 05.02.2009 having the following persons as partners:
1. S.Ramachandran
2. V.Banumathi, w/o erstwhile partner, namely Valavan
3. R.Nalini, W/o the said Ramachandran; and
4. S.Ravikumar, who happened to be the partner in the earlier partnership also.
(b) While so, according to Ramachandran, the said Valavan and his kith and kin indulged in activities which were detrimental to the smooth running of the newly constituted partnership. However, it is the contention on the side of Valavan and his kith and kin that the said Ramachandran siphoned off the funds of the partnership and he is having a separate proprietary concern called Keyem Engineering Enterprises and with that he siphoned off the funds of the partnership and thereby depriving the right of Valavan and his kith and kin.
4. Tersely and briefly, the arguments of Mr.R.Thiagarajan, the learned counsel for the applicants in O.A.No.105 of 2010 and for Respondents 1 and 2 in A.No.3765 of 2009 and would run thus:
(a) Section 9 of the Arbit
