Deepak Nagpal vs Kamal Nagpal
1995 Latest Caselaw 974 Del

JUDGMENT

Manmohan Sarin, J.

1. This is a petition filed under Section 20 of the Arbitration Act by the plaintiff.

The plaintiff and the defendant are brothers and have been carrying on business in Partnership in the name and style of "Carlton Cafe" at Kashmeri Gate, Delhi. The execution of the Partnership Deed dated 1.2.1985, is admitted between the parties. The said Partnership Deed contains an Arbitration Agreement in the following terms :

"That if any partner wishes to retire from partnership business he shall give at least two months notice of his intention to do so when a balance-sheet of the assets and liabilities shall be prepared and after settlement of accounts by the parties the firm shall be dissolved. In case of any dispute regarding the partnership business it shall be referred to arbitration in accordance with the provisions of Indian Arbitration Act."

2. The pleadings in the case are complete. The allegation of the plaintiff is that disputes have arisen regarding the partnership business and the running of the business has become virtually impossible on account of the losses being suffered. The firm is in financial distress and the plaintiff had to contribute from his own resources. The plaintiff claims that he has pooled in personally a sum of Rs. 15,615.80p and Rs. l,24,621.00p. It is stated that the telephone stands disconnected for non-payment of bills and there are amounts due to creditors. The plaintiff blames the defendant for this state of affairs.

3. The defendant in the reply has stated that the petition has been filed mala fide with the oblique purpose of obstructing the defendant from selling his share in property No. F-10/18, Model Town, Delhi, which is the residential house inherited from their father.

4. The defendant also contended that the petition was not maintainable in the absence of notice for dissolution of the firm. The Arbitration Agreement between the parties is not in dispute.

The matter had come up on 8.12.1995. The defendant was willing for appointment of a mutually acceptable Arbitrator, preferably one from the family. However, agreement could not be reached between the parties on a mutually acceptable Arbitrator from within the family.

5. The learned Counsel for the defendant had submitted that failing agreement on a mutually acceptable Arbitrator, the Court may appoint an independent Arbitrator subject to the defendant's objection on the maintainability of the petition. The defendant's objection on the maintainability of the petition is without merit. The plaintiff has placed on record a copy of the notice dated 19.7.1995, sent to the defendant. Even assuming that notice was not served, the petition under Section 20 of the Arbitration Act can itself be treated as a notice. The fact that there are disputes is not denied inasmuch as the defendant himself accuses the plaintiff of siphoning away the funds of the partnership business in the written statement.

6. In these circumstances, let the Arbitration agreement between the parties be filed. I, further, appoint Mr. M.L. Jain, Advocate, 7, Lawyers' Chamber, Delhi High Court, New Delhi, former Registrar of this Court as the Sole Arbitrator to arbitrate upon all the disputes arising out of and in relation to the partnership business including the dissolution of the firm and the division of its assets. The fee of the learned Arbitrator in the first instance is fixed at Rs. 10,000.00/-, to be borne equally by both the parties.

The petition is allowed and disposed of in the above terms.