Challenging the order passed under Section 8 of the Arbitration and Conciliation Act, 1996 in I.A.No.201 of 2011 in O.S.No.422 of 2010 on the file of the Principal Sub Court, Palakkad, the plaintiff came up with this Revision.

2. The application in I.A.No.201 of 2011 was filed by the defendant for a reference under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') based on the arbitration clause incorporated in the partnership agreement. The suit was filed for dissolution of partnership and for consequential settlement of accounts by deputing a Chartered Accountant for collection of accounts and its details. The lower court has granted a reference under Section 8 of the Act by allowing I.A.No.201 of 2011, which is under challenge in this Revision.

3. Heard Sri.P.B.Krishnan, learned counsel appearing for the petitioner, and Sri. Jacob Sebastian, learned counsel appearing for the respondent.

4. The arbitration clause incorporated in the agreement is in the following lines:

“all questions arising in or relating to the management and administration of the partnership business and any difference of opinion between the partners either as regards to any provisions in this deed or any other matter relating to the business shall be decided in accordance with the provisions of the Indian Arbitration Act then in force.”

Based on the same, it was argued by the learned counsel for the defendant that since there is a valid arbitration clause, the relief sought for in the plaint can only be agitated before an Arbitrator. It was also submitted that the relief sought for settlement of accounts pertaining to the partnership and discharge of the existing liabilities would come under the purview of the arbitration clause incorporated in the agreement.

5. It is now well settled that statutory remedy which would end in judgment in rem can be adjudicated only by a civil court. The purpose of arbitration should be understood in the light of the settled position that arbitrator cannot usurp the jurisdiction vested in a civil court under any statute either to declare a particular thing or status or right of a party, which would result in a judgment in rem. Dissolution of partnership is a statutory remedy under Section 44 of the Partnership Act and it is a declaration to the effect that the partnership would stand as dissolved. It is a judgment in rem and hence it can be agitated only in a civil court as it is a statutory remedy which would result in a judgment in rem. It really amounts to declaration of the status of a party.

6. The learned counsel for the petitioner took support from the decision of the Apex Court in Ranjit Kumar Bose and another v. Anannya Chowdhury and another (AIR 2014 SC 1534) wherein the Apex Court had taken the same view after referring various judicial pronouncements rendered by the Apex Court in that regard. The question was again considered in Booz Allen and Hamilton INC v. SBI Home Finance Limited and others ((2011) 5 SCC 532). There is difference between a judgment in rem and a judgment in personam. A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. A 'judgment in personam' is, in form as well as in substance, something which would bind on the parties to the suit and it operates only upon those who have been duly made parties and then privies, being against the person merely, and not settling the status of any person or thing. On the other hand, a 'judgment in rem' is one pronounced upon the status of some particular person or thing binds all persons. Dissolution of a partnership amounts to statutory declaration and hence it cannot be referred for arbitration under Section 8 of the Act.

7. Learned counsel for the respondent/defendant submitted that even if a remedy of dissolution of partnership would result in a judgment in rem, the further relief sought in the