The existence of an arbitration clause is not a ground to reject the plaint as being barred by law.

JUDGMENT

1. The suit relates to a partnership firm under the name and style of M/s Bapalal & Co. (the Firm). The 1st plaintiff was one of the partners of the Firm, the 2nd plaintiff is the son of late Surendra M.Mehta, who was one of the partners of the Firm, the 3rd plaintiff is the widow of Tushaar S.Mehta, another former partner of the Firm, and the 4th plaintiff is the daughter of Suresh B.Mehta, former partner of the Firm. The deceased 1st defendant was a partner of the Firm until his death and defendants 8 to 10 are his legal heirs. The 2nd defendant is the sister of late Pranav H.Mehta, who was a partner of the Firm. The 3rd and 4th defendants are the children of late Tushaar S.Mehta, who was a partner of the Firm. The 5th to 7th defendants are persons who purchased the assets of the Firm from the continuing partners. The plaintiffs sued inter alia for declarations in respect of various conveyances executed by the continuing partners of the Firm and for complete dissolution of the Firm and settlement of the accounts thereof.

2. Three applications were presented to reject the plaint. Application No.9067 of 2022 was filed by the 1st defendant. Since the 1st defendant died after the suit was instituted, the said application does not survive for consideration. Instead, Application No.2981 of 2022 was filed by one of his legal heirs, the 8th defendant, for rejection of the plaint. Similarly, Application No.378 of 2023 was filed for rejection of the plaint by the 2nd defendant. These two applications survive for consideration and all three applications are disposed of by this common order.

3. Oral arguments were advanced on behalf of: the applicant/8th defendant in A.No.2981 of 2023 by Mrs.Sudharshana Sunder, learned counsel; the applicant/2nd defendant in A.No.378 of 2023 by Mr.U.Karunakaran, learned counsel; the 5th to 7th defendants in the suit by Mr.T.K.Ramkumar, learned counsel; the plaintiffs by Mrs.L.Maithili, learned counsel; and the 3rd and 4th defendants by Mr.Roshan Balasubramanian, learned counsel.

4. Learned counsel for the applicant/8th defendant submitted that one group of partners retired from the Firm in 1984. By drawing reference to a letter dated 25.06.1984 from the Firm to the Bank of India, learned counsel submitted that the Firm informed the Bank about the retirement of four partners, namely, Surendra M. Mehta, Suresh B. Mehta, Naresh M. Mehta and Tushaar S. Mehta. She also pointed out that the retired partners signed this document. She next referred to the deed of partial dissolution dated 09.12.1985 and pointed out that the deed specified that the Group A partners, namely, Surendra M. Mehta, Suresh B. Mehta, Tushaar S.Mehta and Naresh M.Mehta had retired from the Firm by permitting the other partners, namely, Harshkant S.Mehta, Sreekant S.Mehta and Pranav H.Mehta to carry on the business of the Firm with effect from 26.06.1984.

5. Learned counsel submitted further that the Firm was orginally formed on 28.10.1981 and reconstituted on 06.06.1983. As per the reconstituted partnership deed, she submitted that the retiring partner is not entitled to the goodwill or assets of the Firm. The rights of such retiring partners are limited to the amount standing to the credit of the respective partner and the profit accrued up to the date of retirement of such partner. On a combined reading of the partnership deed and the partial dissolution deed, learned counsel contended that the partners who retired cannot make a claim for the goodwill or assets or seek dissolution of the Firm.

6. The next contention of learned counsel was that a suit was filed by one of the retired partners, Naresh M.Mehta, before the City Civil Court at Bombay in S.C.No.4762 of 1994. The suit was directed against Pranav H.Mehta and Sreekant S.Mehta and decided by judgment and decree dated 27.11.2002. Learned counsel pointed out that the Court concluded that the partners referred to as Group A partners under the deed of partial dissolution retired f