Parties are bound by the arbitration clause in the partnership deed, and if the dispute falls within the scope of the arbitration clause, the suit can be stayed under Section 34 of the Arbitration Act.

R.L. Anand, J. - This is a civil revision and has been directed against the order dated 12.12.1997 passed by the Additional District Judge, Gurdaspur, who allowed the appeal of the defendants and stayed the suit under Section 34 of the Arbitration Act by setting aside the order dated 19.8.1994 passed by Sub Judge 1st Class, Batala, who dismissed the application under Section 34 of the Arbitration Act.

2. Some facts can be noticed in the following manner and these facts I am writing from the copy of the plaint which was handed over to this Court by the learned counsel for the parties :-

3. HUF Rajesh Kumar Gupta and Sons and others filed a suit for rendition of accounts and for payment of amount which was found due to the plaintiffs from the defendants Kewal Kumar Gupta and HUF Ravinder Kumar Gupta and Sons. The plaintiffs also prayed for perpetual injunction restraining the defendants from carrying on the trade and business of firm M/s Rajesh Kumar and Brothers, G.T. Road, Batala or transferring or alienating any part or portion of the assets of the said firm. The case set up by the plaintiffs before the trial Court was that plaintiff i.e. HUF Rajesh Kumar Gupta and Sons through Rajesh Kumar Gupta as its Karta entered into a partnership for the purpose of carrying on the joint business in partnership with the defendants under the name and style of M/s Rajesh Kumar and Brothers, G.T. Road, Batala. A regular deed of partnership was executed by the parties on 1.4.1987 and the partnership came into existence with effect from 1.4.1987 itself. It was also a clause of the partnership deed that account books of the firm were to be maintained and kept at the business premises of the firm. The share of the parties in the profit and loss was as under :

(i) Sh. Kewal Kumar Gupta 20%

(ii) Sh. Ravinder Kumar Gupta Karta of his HUF 40%

(iii) Sh. Rajesh Kumar Gupta Karta of his HUF 40%

4. In paras No. 4, 5 and 6 the plaintiffs have alleged as follows :

"4. That the defendants are head-strong persons and have threatened the plaintiff that they will carry on the business of the firm exclusively by themselves without joining the plaintiffs in any transaction and that they will not allow the plaintiffs to carry on the business of the firm. The defendants further threatened that they will transfer or alienate any part or portion of the firm assets, properties or premises without joining the plaintiffs in the said transaction. The said threatened action of the defendants is illegal, ultra vires, high-handed and amounts to an actionable nuisance and they are liable to be restrained by the issuance of perpetual injunctions as prayed for in the heading of the plaint which is the only efficacious remedy available to the plaintiffs in the circumstances of the case. The defendants should not carry on any business or transaction of the firm without joining the plaintiffs or transfer or alienate any part or portion of the firm assets, properties or premises.

5. That, the defendants are in possession of all the account books of the firm and are accounting party. The accounts of the partnership have neither been rendered by the defendants nor settled between the parties.

6. That, the plaintiffs have requested the defendants to render the account of the partnership business to the plaintiffs and on such rendition and settlement of accounts to pay the amount of profits etc. which is found due to the plaintiffs and return them the assets contributed by them but they have refused to do so since yesterday. The defendants have also refused to join the plaintiffs in the carrying on the business or the firm although the same is not yet dissolved, and on the other hand threaten to hand over the assets of the firm to any other persons."

5. Before filing the written statement and taking any steps the defendants filed an application under Section 34 of the Arbitration Act and prayed for the stay of suit.

6. The parties placed the original partnership deed before the