Smt. Veena Duggal And Ors. vs Mr. Harbhajan Singh Vedi And Anr.
2002 Latest Caselaw 1381 Del

JUDGMENT

S. Mukerjee, J.

1. This matter was fixed in the category of "Short Cause" for final disposal.

2. On 10th July 2002, none appeared for defendant No. 1 despite waiting uptil 3.45 p.m.. Accordingly the counsel present viz. Shri Kuljeet Rawal for the plaintiff and Mr. Kirti Uppal for respondent No. 2 were heard and judgment and reserved after the said learned counsel closed their submissions.

3. This is a petition under Section 20 of the Arbitration Act, 1940 which has been registered as Suit No. 2313-A/86.

4. The petitioners in this case are the widow and three daughters of Late Shri K.K. Duggal, who was an architect by training and profession and a partner in a firm known as Gulf Design Group Along with the two respondents. This firm had its head office at Sharjah and was doing business in Kuwait. The partnership came into effect from 1st January, 1975, but was reduced in writing only in the year 1978.

5. Mr. K.K. Duggal died in a car accident near Rampur in the State of Uttar Pradesh, on 26th May, 1985, leaving behind the petitioners as the only legal heirs.

6. It is the case of the petitioners that after the execution of partnership deed between Mr. K.K. Duggal and respondents 1 and 2, which is Annexure A1 to the petition, the partners decided by mutual agreement, to enhance their monthly drawing to 750 Kuwait Dinars per month instead of 500 Kuwaiti Dinars per month, as provided in Clause 16 of the partnership deed, and applicable earlier.

7. The case of the petitioners is that after the death of Mr. K.K. Duggal, the respondents paid to the petitioner No. 1 the amount of KD 750 per month up to 31st October 1985 i.e. for almost five months, but thereafter did not pay anything at all up to the date of filing of the Suit viz. for a period of about twelve months, which had elapsed till then.

8. The petitioner further submits that repeated requests made to the respondents to provide copies of balance-sheets of Gulf Design Group for the years 1984-85, for both the station Sharjah and Kuwait, which was required by her to know the amounts due to her late husband and about the financial affairs position of the firm, all went in vain.

9. The petitioners further submit that upon finding the business dealings of the respondents to be unfair and un business-like, and perceiving that the respondents are bent upon to take advantage of the weakness and helplessness of the petitioners, they decided to opt out of the partnership in terms of Clause 21 of the partnership deed, and through their letter dated 28th August, 1986, they claimed a share in the partnership.

10. The petitioner also conveyed her claim as on the date of filing of suit, as follows:-

A.

1/3rd share of partners capital.

  -Dh           333,333

 
  B.
  1/3rd  of  accumulated profits  yet  to  be credited  to  current account.
  -Dh     1,535,311

 
  C.
  Share  in  Goodwill  @20%
  -Dh   148,919

 
  D.
  Total  amount  lying to  the  credit  of Mr.K.K.Duggal's Account.
  -Dh   474,459

 
  E.
  Twelve  monthsremuneration  @ KD  750
  -Dh   112,500

 
  
  Total
  Dh.   26,04,522



 

 Dh. 26,04,522 being equivalent to Rs. 91,15,827.00 as per then prevailing exchange rate.  

 

11. It is further the case of the petitioners that petitioner No. 1 had a meeting with the respondent No. 1 in Sharjah on 26th and 27th October 1986, where it was agreed that the matters be referred to arbitration and thereupon the petition was filed.

12. The petitioner finally contends that respondent 1 and 2 while not paying to the petitioner their share in the firm Gulf Design Group, have formed two private limited companies being Act Developers Private Limited and Prominent Construction Team Private Limited, having registered offices at M-65, Connaught Place, New Delhi and the total investment in these companies, is from out of the partnership businesses of Gulf Design Group and another firm Architectural Construction Team being run in partnership by late Shri K.K. Duggal and respondents 1 and 2.

13. The respondents are stated to behaving assets and to be residing at Delhi and also working for gain. On that basis, the proceedings have been initiated in this Court.

14. Though written statement was filed by defendants disputing inter-alia the territorial jurisdiction of this Court, and contending that late Shri K.K. Duggal had allegedly overdrawn large amounts and therefore he was owing some money back to the firm. No one appeared on behalf of respondent No. 1 to make any submission in support of the pleadings which are on record. In fact, since no one appeared on behalf of respondent No. 1, the arguments were proceeded against ex parte vide order dated 10th July, 2002.

15. Learned counsel for respondent No. 2 Mr. Kirti Uppal, has very fairly submitted that the relief claimed in the petition being only of reference to arbitration, he has no objection to the appointment of arbitrator provided that all aspects of the matter, including the existence of territorial jurisdiction or otherwise, and other defenses, be also adjudicated upon by the arbitrator.

16. I have gone through the affidavit by way of evidence filed by the petitioner on her own behalf as well as on the behalf of her minor children. The said evidence duly corroborates the stand of the petitioner. In particular, clear-cut desposition have been made regarding the respondents being subject to the jurisdiction of this Court.

17. The respondent No. 1 has filed an application being IA 4246/1999 in the connected Suit No. 2709/1986 for seeking liberty to file additional affidavit by way of rebuttal evidence. Though additional affidavit was filed but whether the same was to be taken on record or not was to be decided at the stage of preliminary issue. Thereafter the matter appears to have adjourned for one reason or another for the last about three years.

18. On 10th July, 2002 as there was no appearance on behalf of respondent No. 1, the matter was herd and orders were reserved. A such no submission was made regarding IA 4256/1999 in the connected Suit No. 2709/1986 which was accordingly dismissed. The effect of disposal of the said application is that additional affidavit though filed is not taken on record.

19. Even otherwise as per the unrebutted testimony of the petitioner which is on record, it stands established that this Court had territorial jurisdiction to decide on this petition. In fact the issue No. 1, as framed on 4th December, 1998, had placed the onus upon the respondent. While respondent No. 1 is not present and therefore did not make any submission at all, the respondent No. 2 was agreeable to matter being referred to sole arbitrator to be appointed by this Court, subject to all contentions being decided by the Sole Arbitrator.

20. In view of the above, no issue having been pressed or got framed by the respondent, in any manner challenging the existence of the arbitration clause, the petitioners would be entitled to a relief of appointment of a sole arbitrator, to whom the disputes, as contained in petition filed by the petitioners, shall stand referred for learned Sole Arbitrator to adjudicate in accordance with law within a period of four months from today.

21. I accordingly appoint Hon'ble Mr. Justice A.K. Srivastava (Retd. Judge of this court) as a sole arbitrator to adjudicate upon and decide the disputes raised by the petitioners as contained in and arising out of the petition under Section 20 of the Arbitrator Act. he will be entitled to fix his own remuneration to be shared equally by the parties subject however to overall ceiling of Rs. 50,000/- in each case considering that there are three matters which stand consolidated.

22. Copy of this order be issued dusty to learned counsel for the parties and also be remitted by Registered Post to sole arbitrator for entering upon the reference and taking further action thereupon in accordance with law.

23. Petition stands disposed of but with no orders as to costs.