Sunita Vilas Goankar vs Kalpana Tapan Bose And 3 Ors
2021 Latest Caselaw 3271 Bom

                                                                31-app572-19.doc

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                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    ORDINARY ORIGINAL CIVIL JURISDICTION


                    ARBITRATION APPEAL NO.572 OF 2019
                                   IN
                   ARBITRATION PETITION NO.428 OF 2018
                                  WITH
                     NOTICE OF MOTION NO.997 OF 2019
                                   IN
                    ARBITRATION APPEAL NO.572 OF 2019


      Ms.Sunita V. Gaonkar                                    ...Appellant /
                                                              ...Applicant
                  V/s.

      Kalpana T. Bose & Ors.                                  ...Respondents


      Dr.Uday P. Warunjikar for the Appellant / Applicant.

      Mr.Nigel Quraishy i/b Mr.Dushyant Krishnan for the Respondent
      Nos.1 to 3.


                                CORAM : R.D. DHANUKA &
                                        V.G. BISHT, JJ.

DATE : 22ND FEBRUARY, 2021.

P.C. :-

1. By this appeal filed under section 37 of the Arbitration &

Conciliation Act, 1996, the appellant (original petitioner) has

impugned the judgment delivered by the learned single Judge dated

23rd August, 2019 partly rejecting the arbitration petition filed by the

appellant (original petitioner). None of the respondents have

impugned the order passed by the learned single Judge.

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2. Some of the relevant facts for the purpose of deciding this

appeal are as under :

On 12th October, 1998, a partnership deed was executed

between the parties. Mr. Tapan Bose, the husband of the respondent

no.1 and the father of the respondent nos.2 and 3 was the partner of

the said partnership firm holding 25% share in the partnership firm.

The said Mr.Tapan Bose expired in the month of February, 2002.

Upon demise of the said Tapan Bose, remaining partners executed a

fresh deed of partnership - cum - retirement deed on 12 th June,

2002. The appellant continued to hold 50% in the partnership firm,

whereas Mr. Nitin Bose claimed 50% under the said partnership

deed dated 12th June, 2012.

3. On 6th January, 2017, the respondent nos.1 to 3 (original

claimants) applied for declaration that the deed of partnership dated

12th June, 2012 between the parties to the said partnership firm was

void-ab-initio, to declare that the respondent nos.1 to 3 were entitled

to be made partners in the partnership firms M/s.Saikrupa Medical &

General Stores along with the appellant herein and the respondent

no.4 and to enter into a partnership deed effective from 12 th June,

2002. The respondent nos.1,2 and 3 claimed 8.33% share each.

They also prayed for an order and direction against the appellant and

the respondent no.4 to pay the sum of Rs.3,21,05,641/- being their

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share in the property of the said firm from 2 nd February, 2002 till the

date of decree with interest at the rate of 18% p.a. and in the

alternate to declare that the said firm under the partnership deed

dated 12th October, 1998 is valid and subsisting. The said statement

of claim was resisted by the appellant by filing statement of defence

before the arbitral tribunal.

4. Learned arbitrator made an award on 20 th January, 2018

declaring the partnership deed dated 12th June, 2002 as void-ab-

initio. Learned arbitrator declared that the Respondent nos.2 and 3

herein are entitled to be made partners of the said partnership firm

and their respective shares being 12.5% each. The appellant and the

respondent no.4 were directed to execute a fresh partnership deed

evidencing the share of the respondent nos.2 and 3 (original claimant

nos.1 and 2) in the partnership firm and declared that appellant and

the respondent no.4 were jointly and severally liable to pay to the

respondent nos.1 to 3 an amount of Rs.40,88,250/- being their share

of the profits in the firm and directed the appellant to pay the cost of

Rs.3,00,000/-.

5. Being aggrieved by the said arbitral award, the appellant

herein preferred arbitration petition under section 34 of the Arbitration

& Conciliation Act, 1996 before this Court. The respondent no.4 did

not file any arbitration petition impugning the said award. By the

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judgment dated 23rd August, 2019, the learned single Judge partly

allowed the said arbitration petition and reduced the profit awarded

by the learned arbitrator in the sum of Rs.8,21,250/- towards 25%

share in daily profit of Rs.3000/- working out to Rs.750/- as against

the amount of Rs.40,88,250/- awarded by the learned arbitrator.

6. Dr.Warunjikar, learned counsel for the appellant invited

our attention to some of the paragraphs of the arbitral award and the

findings of the learned single Judge in the impugned judgment. The

first submission of the learned counsel for the appellant is that

though the learned arbitrator rightly rejected the claim made by the

claimant no.1 on the ground of limitation, learned arbitrator allowed

the claim made by the claimant nos.2 and 3 and did not apply the

same basis on which the claim made by the claimant no.1 was

rejected by the learned arbitrator. He invited our attention to the

averments made in paragraph 13 of the statement of claim and

would submit that though it was admitted that the respondent no.1

had come to know about the said partnership deed dated 12 th

February, 2002 in the year 2005, learned arbitrator did not dismiss

the entire claim on the ground of limitation, which was filed on 6 th

January, 2017 after expiry of more than 11 years from the date of

knowledge of the respondent no.1.

7. It is submitted by the learned counsel that the respondent

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no.2 became major in the year 2009 and the respondent no.3

became major in the year 2012. The claims thus filed by the

respondent nos.2 and 3 in the year 2017 were ex-facie barred by law

of limitation. Learned counsel strongly placed reliance on the cross-

examination of the respondent no.2 and more particularly reply to

questions 31 to 33 and would submit that though the respondent no.2

had admitted in the cross-examination that she was aware of the

complaint filed by the respondent no.1 and had also visited the police

station when the respondent no.1 had filed the complaint in the year

2013, learned arbitrator did not take into consideration the date of

knowledge of the respondent no.2 about the Partnership Deed in the

year 2013 and did not dismiss the claim filed by the claimant no.2

filed on 6th January, 2017. He submitted that the learned single

Judge also over looked this part of evidence reflecting the date of

knowledge of the respondent no.2 about the partnership deed

executed in the year 2012.

8. Learned counsel for the appellant invited our attention to

the averments made in paragraph 12 of the statement of claim and

would submit that though the respondent no.1 had admitted that after

the demise of her husband, who was a partner in the said firm, the

respondent no.1 was working in the partnership firm and was being

paid certain amounts till September, 2016, the learned single Judge

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did not take into consideration the admission on the part of the

respondent nos. 1 to 3 and awarded the claim for profit in the

partnership firm for the period of three years.

9. The next submission of the learned counsel for the

appellant is that the respondent no.4 herein had admitted that he will

have share of 50% in the partnership firm as against his original

share of 25% and would take care of the family members of Tapan

Bose, learned arbitrator has held the appellant equally liable to pay

the awarded sum to the respondent nos. 1 to 3. In support of this

submission, learned counsel invited our attention to the reply given

by the respondent no.4 in his cross-examination and more

particularly question 11 accepting suggestion put to him by the

learned advocate that the respondent no.4 had unlawfully deprived

the claimants of their share in the partnership firm since 2002.

10. Mr. Quraishy, learned counsel for the respondent nos.1 to

3 on the other hand insofar as the issue of limitation raised by the

appellant is concerned submits that the respondent no.2 had derived

the knowledge about the said partnership deed dated 12 th June, 2002

in the year 2015. He invited our attention to the cross-examination of

the respondent no.2 by the appellant's advocate and more

particularly the answer to questions 26 to 28 and would submit that

the respondent no.2 had stated that when her father had expired, she

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was 12 years old. She came to know that her father was a partner in

the partnership firm only when her mother explained the same to her

in the year 2015. She admitted that she had never accompanied her

mother to the partnership firm.

11. Insofar as reliance placed on the evidence of the

respondent no.2 recorded in questions 31 to 33 is concerned, it is

submitted by the learned counsel that the said witness had

categorically denied that she was aware of the contents of the

complaint filed by her mother in the year 2013. He submits that in

any event the entire evidence was considered by the learned

arbitrator in right perspective and had recorded the findings of fact

on the issue of limitation being mixed question of fact and law and

rightly did not interfere with the award on the issue of limitation in the

order passed under section 34 of the Arbitration & Conciliation Act,

1996 for the entire period.

12. It is submitted by the learned counsel for the appellant that

the appellant has not raised any ground in the petition filed under

section 34 of the Arbitration & Conciliation Act to the effect that the

cross-examination of the claimant no.2 recorded in questions 31 to

33 was though brought to the notice of the learned single Judge has

not been considered in the impugned judgment. Learned counsel

invited our attention to two clauses from the original partnership deed

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and the partnership deed executed in the year 2002. He submits that

on the date of demise of any one of the partner from the partnership

firm, the legal heirs of that partner were entitled to become partner in

the firm automatically. He submits that since the learned arbitrator

came to the conclusion that the respondent no.1 was not entitled to

seek relief of becoming the partner in the partnership firm, the other

two legal heirs of the deceased partner rightly have been granted

share of 12.5% each in the partnership deed.

13. Insofar as the submission of the learned counsel for the

appellant that the learned arbitrator could not have held the appellant

liable, learned counsel strongly placed reliance on section 37 of the

Partnership Act and would submit that since the appellant and the

respondent no.4 continued the business of the partnership firm

without final settlement of accounts of the deceased husband of the

respondent no.1 and the father of the respondent nos.2 and 3, the

remaining partners were liable to pay to the legal heirs of the

deceased partner the profits that had been earned by the partnership

firm till such accounts were finally settled.

REASONS AND CONCLUSION :-

14. Insofar as the issue of limitation raised by the learned

counsel for the appellant is concerned, the cross-examination of the

respondent no.2 would clearly indicate that on a specific question

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asked to the said witness as to when she came to know that her

father was a partner in the partnership firm, the said witness

answered that she came to know that her father was a partner in the

firm only when her mother explained to her in the year 2015. There

was no further cross-examination on that aspect by the appellant.

She also denied that she was aware of the contents of the complaint

made by the respondent no.1 before the concerned police station. It

was thus proved beyond reasonable doubt that the respondent no.2

came to know about the partnership executed in 2002 only in the

year 2015. Admittedly the arbitration clause was invoked within three

years from the date of knowledge of the respondent no.2. The

respondent no.3 supported the case of the respondent no.2.

Limitation did not commence from the date of the respondent nos.2

and 3 attaining the age of majority but commenced from the date of

their knowledge about the Deed of Partnership in 2015.

15. Learned arbitrator has considered this aspect in detail in

the impugned award and after considering oral evidence as well as

the pleading and submissions made by both the parties rendered a

finding that the claims made by the respondent no.2 and 3 were not

barred by law of limitation and accordingly granted various reliefs.

Learned single Judge also considered this aspect in great detail

however reduced the claim of profit which was granted by the

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learned arbitrator for the period of 15 years to the period of three

years prior to the date of invocation of the arbitration agreement. The

respondent nos.1 to 3 (original claimants) have not challenged that

part of the judgment rendered by the learned single Judge.

16. Insofar as the submission of Dr.Warunjikar that the

learned arbitrator or the learned single Judge did not consider the

cross-examination of respondent no.2 in question nos. 34 to 37 in the

impugned judgment is concerned, it is not in dispute that the

appellant did not apply for clarification of the order before the learned

single Judge nor has raised any such ground in the appeal memo.

We are thus not inclined to accept this submission of the learned

counsel for the appellant.

17. The issue of limitation is a mixed question of fact and law.

Learned arbitrator as well as learned single Judge has considered

the issue of limitation in detail. We find no patent illegality or

perversity on the part of the learned arbitrator or any infirmity in the

order passed by the learned single Judge on the issue of limitation

raised by the appellant.

18. Insofar as the submission of the learned counsel for the

appellant that though it was admitted by the respondent nos.1 to 3 in

the statement of claim that the respondent no.1 was working since

1998 and had been paid certain amount till 2016, learned arbitrator

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did not consider that part of the submissions in the impugned award

nor by the learned single Judge in the impugned judgment is

concerned, no such ground has been raised by the appellant before

the learned single Judge. We cannot thus allow the appellant to urge

this submission for the first time across the bar at this stage.

19. Insofar as the last submission of Dr.Warunjikar, learned

counsel for the appellant that the respondent no.4 had admitted in his

cross-examination that the legal heirs of the deceased partner was

not paid any amount and thus the learned arbitrator at most could

have awarded the claim only against the respondent no.4 and not the

appellant herein is concerned, we have perused the cross-

examination of the respondent no.4 by the appellant. In question 10

of the cross-examination, the respondent no.4 in a suggestion put to

the respondent no.4 by the appellant that the legal heirs of the

appellant were not paid their dues since 2002, respondent no.4

admitted such suggestion. In our view, this suggestion would

support the case of the respondent nos.1 to 3 and not the appellant.

The fact that the respondent nos.1 to 3 were not paid their share has

been admitted by the appellant herself by putting her case to

respondent no.4.

20. Be that as it may, in view of sections 25 and 26 of the

Partnership Act, 1932, every partner is liable, jointly and severally

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with all other partners and also for all acts of the firm done while he

was a partner. Learned counsel for the appellant did not dispute that

he was also the signatory to the said partnership deed entered in

the year 2002 and was entitled to 50% share. If according to him, the

respondent no.4 could not have entered into such partnership deed,

the appellant would not have signed such partnership deed. We are

thus not inclined to accept the said submission made by the learned

counsel that the learned arbitrator ought to have granted monetary

relief only against the respondent no.4 and not the appellant. The

appellant being the partner of the partnership firm and had not settled

the accounts of the deceased partner and continued the partnership

firm and did not accept the legal heirs of the deceased partner as

partner by entering into the partnership firm, was equally liable to pay

jointly and severally with the respondent no.4.

21. Section 37 of the Partnership Act, 1932 clearly indicates

that if the other partners have not settled the account as between

them and the out going partner or his estate, the outgoing partner or

the estate would be entitled to claim the share in the profit earned by

the partnership firm till such accounts are settled in future.

22. The power of Court under section 37 of the Arbitration &

Conciliation Act, 1996 are more limited than the powers of the Court

under section 34 of the Arbitration & Conciliation Act, 1996. Though

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our powers are limited, we have granted sufficient hearing to the

appellant on all the issues raised by the appellant.

23. In our view, the appeal is totally devoid of merit and is

accordingly dismissed. There shall be no order as to costs.

24. In view of dismissal of the arbitration appeal, the notice of

motion does not survive and is accordingly dismissed.

(V.G. BISHT, J.)                                 (R.D. DHANUKA, J.)



                   Digitally signed
  Vasant           by Vasant A. Idhol

  A. Idhol         Date: 2021.02.25
                   11:49:27 +0530