The main legal point established in the judgment is that disputes regarding dissolution of partnership and rendition of account should be referred for arbitration in view of the arbitration clause, and the arbitrator is competent to decide on the dissolution of the partnership and to award its dissolution.

Alok Singh, J.

1. Present petition is filed assailing the order dated 23.09.2009 passed by learned Civil Judge (Junior Division), Rajpura, whereby the application moved by the defendant No. 1-petitioner herein seeking rejection of the plaint in view of Sections 5 and 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") was rejected.

2. The brief facts of the present case are that plaintiffs-respondents herein filed suit for rendition of accounts by dissolution of partnership, contending therein that partnership deed was executed between the parties to the suit on 08.08.2008 to carry the business of sale and purchase of sick units dealing in scrap and machinery, commission agents, builders and land developers. It has further been contended that as per the partnership deed, plaintiffs share would be 25% each and share of defendant No.1 would be 50% in the profit and loss account of the business. It has further been asserted in the plaint that defendant No.l is not permitting the plaintiffs to participate in the business and is not rendering any account of the firm and has denied the plaintiffs to participate in the business, and refused to give the share of the profits of the firm.

3. On the first date of hearing, defendant No.l-petitioner herein moved an application under Order 7 Rule 11(a) and (b) of C.P.C. for rejection of plaint, inter-alia, contended therein that partnership deed contains arbitration clause and any dispute arising out of the partnership deed is to be settled by the arbitration only. It has further been averted that since controversy arising out of the partnership can be settled only by the arbitration in view of clause 19 of the partnership deed, present suit is not maintainable in view of Sections 5 and 8 of the Act.

4. Learned Trial Court vide impugned order has held that suit for dissolution of partnership and rendition of account has to be adjudicated upon by the Civil Court only and not by arbitration. Learned Trial Court vide impugned order, rejected the application moved by defendant No.1-petitioner herein.

5. I have heard learned counsel for the parties and perused the record.

6. Undisputedly, partnership deed is placed on record by the plaintiffs and in paragraph No.l of the plaint, plaintiffs have admitted execution and existence of partnership deed dated 08.08.2008. Clause 19 of the partnership deed reads as under:-

"That in case of any controversy arising out of this deed relating to this contract or breach thereof, the same shall be settled by arbitration as provided in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the award shall be binding on all the partners and their legal representatives and nominees."

7. Honble Apex Court in the matter of V.H. Patel & Company and others v. Hirubhai Himabhai Patel and others, (2000)4 Supreme Court Cases 368, in paragraph no. 11 and 12 has held as under:-

"11. A contention had been raised before us that the arbitrator has no power to dissolve a partnership firm, especially on the ground that such dissolution is based on a ground or any other ground which renders it just and equitable to dissolve and that is the power of the court. It was pointed out that mere strained relationship between the partners would not be enough to dissolve a partnership. It is not necessary for us to examine this contention in this case when the partners sought for dissolution of the partnership on various grounds enumerated in Section 44(c) to (f) may also be sufficient and may not be necessary to invoke the inherent jurisdiction of a court such as dissolution is just and equitable. If there has been breach of agreement and conduct is destructive of mutual confidence certainly such conduct can give rise to a ground for dissolution of the partnership. While mere disagreement or quarrel arising from impropriety of partners is not sufficient ground for dissolution, interference should not be refused where i