Ashwani Kumar Verma vs Rajbir Singh & Anr.
2009 Latest Caselaw 2304 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                  Date of Reserve: April 28, 2009
                                                     Date of Order: May 28, 2009

+OMP 464/2008
%                                                                      28.05.2009
    Ashwani Kumar Verma                                         ...Petitioner
    Through : Mr. Vineet Chadha, Advocate

      Versus

      Rajbir Singh & Anr.                                      ...Respondent
      Through: Mr. D.P. Bhatia, Advocate


      JUSTICE SHIV NARAYAN DHINGRA

1.    Whether reporters of local papers may be allowed to see the judgment?

2.    To be referred to the reporter or not?

3.    Whether judgment should be reported in Digest?


      JUDGMENT

This petition has been made by the petitioner under Section 9 of the

Arbitration & Conciliation Act, 1996 (for short, "the Act") stating therein that

he was a partner in the firm New Jagran Enterprise vide a partnership deed

dated 3rd May 2003. He submits that respondent No.1 who was also a partner

of the firm had forged and fabricated various documents including his letter

of resignation from the partnership and respondent No.2 in order to mislead

the bankers, had written letters that only respondent No.1 was to operate the

bank account. Same misrepresentation was made to various other clients of

the firm and under this misrepresentation, respondent No.1 collected dues

from parties on behalf of the firm. Respondent No.1 also impleaded the

petitioner in false case of the theft of a truck belonging to the partnership

firm. A prayer was made that the respondent should be restrained from

collecting, realizing and misappropriate the payments due from the debtors

OMP 464.08 Ashwani Kumar Verma v. Rajbir Singh & anr. Page 1 Of 6 of the said firm including acceptance of cash bills, cheques etc and he should

be restrained from raising funds from the market in the name of partnership

firm and from transferring, selling, alienating or creating third party rights qua

the partnership assets and operating bank account standing in the name of

the firm, issuing any cheque on behalf of the firm and in favour of the persons

including the creditors.

2. Vide an order dated 3rd September 2008, this Court had issued an ex

parte interim injunction in favour of the petitioner observing that the

petitioner has made out a prima facie case and thus Court restrained the

respondent from operating the existing bank account of the firm and from

opening any new bank account in the name of the firm and from receiving

payments from the creditors of the said firm in any form other than by

cheque or pay orders and from depositing such pay order/ cheque in any

bank account other than the existing bank account.

3. The contention of the respondent No.1 is that the petitioner had

resigned from the firm vide retirement deed dated 26 th April 2008 and all the

accounts of the petitioner were settled. A copy of retirement deed has been

placed on record.

4. The contention of the petitioner is that this retirement deed was a

forged document.

5. A perusal of the documents filed by the parties would show that on 9 th

April 2008, Mr. J.B. Bansal, Advocate on behalf of respondent served a notice

on the petitioner wherein it was categorically stated that the petitioner was

OMP 464.08 Ashwani Kumar Verma v. Rajbir Singh & anr. Page 2 Of 6 partner of the firm New Jagran Enterprises along with one Mr. Kapil who were

looking after the business sites of the firm all over India while Mr. Rajbir

Singh, respondent herein, was handling the finance and other issues of the

firm from Delhi. It was alleged that Mr. Kapil was not interested and was

acting against the interests of the firm and he, therefore, retired from the firm

on 14th November 2007 and his name was deleted from the record of

Registrar of Firms and the firm was re-constituted and the petitioner and

respondent became partners in the ratio of 30% and 70% in the loss and

profits of the firm. It was alleged in the same notice that the petitioner in

connivance with Mr.Kapil was acting against the interests of the firm and the

petitioner illegally and unlawfully, without consent or permission of

respondent, took HDD Machines and one truck and one Alto Car. Thus, the

petitioner committed criminal breach of trust and criminal contravention of

the properties. It was further stated in the notice that respondent was not

interested in any partnership business with the petitioner and the petitioner

was expelled from the partnership and petitioner shall have no authority to

act on behalf of respondent. The petitioner was called upon to handover HDD

Machines, truck and Alto car within three days of receipt of notice. It was also

stated that since the petitioner has been expelled from the partnership firm,

he was no more partner in the firm and it was threatened that action will be

taken against the petitioner.

6. Mr. Kapil Kumar and Mr. Ashwani Kumar had also got a notice dated

19th May 2008, served upon the respondent through their advocate wherein it

was stated that the partnership was initially between Mr. Kapil Kumar and the

petitioner. Their partnership firm New Jagran Enterprises was recognized as

A-Class Contractors and was having roaring business when respondent

OMP 464.08 Ashwani Kumar Verma v. Rajbir Singh & anr. Page 3 Of 6 expressed his desire to become a partner. He was inducted as a partner on

3rd May 2003 to the extent of 1/3rd share. Initially things moved smoothly and

the petitioner and Mr. Kapil Kumar put hard work to take the firm to new

heights and when the profits of the firm started increasing, the respondent

started misappropriating the profits and embezzling large amounts for

personal purposes. The respondent with the help of this embezzled amount

build a new house and sent his son to England for education. The petitioner

and Mr. Kapil Kumar got inspected the account books and found that several

entries were missing and the account books were not being properly

maintained. It was also alleged that respondent started pressurizing the

petitioner and Mr. Kapil Kumar to resign and when they refused to resign, he

forcibly obtained signatures of the petitioner on some blank letters and

letterheads of the firm which were later on misappropriate and misused. It

was also alleged that respondent with the help of anti-social elements

(gundas) forced the petitioner and Mr. Kapil Kumar to sign certain blank

papers and even threatened them to kill. It was alleged that the

misappropriated amount was to the extent of Rs.1 crore.

7. The retirement deed placed on record by respondent is of 26th April

2008. Obviously, this retirement deed is of a date subsequent to notice of the

respondent served on the petitioner whereby the respondent had claimed

that the petitioner stood expelled from the partnership firm as the respondent

was not interested in doing business with the petitioner. Once the petitioner

had been expelled from the partnership firm, obviously the partnership firm

had come to an end and all what remained was to settle the accounts of

partners in the partnership firm. There is no document showing that the

account of the partnership firm were settled and a profit and loss statement

OMP 464.08 Ashwani Kumar Verma v. Rajbir Singh & anr. Page 4 Of 6 showing assets of the firm, list of creditors and debtors, bank accounts,

properties was prepared and the parties had after settling the account

dissolved the partnership firm. The petitioner was equally entitled to goodwill

of the firm being a partner. There is no document showing any value of the

goodwill or assets of firm was arrived at and the petitioner was paid his due

amount. It only seems that the parties lost trust in each other. The

respondent lodged an FIR about theft of the assets and the petitioner was

arrested in that FIR. Although the name of the petitioner was not mentioned

in the FIR but the petitioner could not have been arrested unless the

respondent had expressed doubt about the involvement of petitioner. The

petitioner remained in police custody and was interrogated but no recovery

was effected from him. He was ultimately granted bail. All this shows that the

story of retirement of petitioner after settling the account is highly doubtful.

The disputes between the parties concerning partnership are to be resolved

by arbitration as partnership contained an arbitration clause. Since the

parties have lost faith and are at loggerheads the assets and the bank

accounts of the partnership firm are required to be protected till the matter is

resolved through arbitration. The petitioner thus has a prima facie case in his

favour. The balance of convenience also lies in favour of the preserving the

assets and liabilities till they are divided as per share of the partners in the

firm.

8. Learned counsel for respondent relied upon Atul Singh & ors. v. Sunil

Kumar and others 2008(1) RCR 908 and contended that the partnership was

superseded by the new partnership deed and fresh partnership deed was in

existence and, therefore, only new partnership deed would govern the

relationship between the new partners and the earlier partners who were not

OMP 464.08 Ashwani Kumar Verma v. Rajbir Singh & anr. Page 5 Of 6 partners in the new partnership deed can file a civil suit for declaration, if so

advised.

9. In my view, the above case relied upon by the respondent is of no help

to the respondent. The facts of the present case are altogether different. This

petition is under Section 9 with a prayer for preserving the assets of the firm.

The case referred to is in respect of civil suit wherein an application under

Section 8 was made.

10. The application of the petitioner is allowed. The petitioner and

respondent are restrained from operating existing bank accounts of M/s New

Jagran Enterprises or from opening any new bank account in the name of the

firm and they are also restrained from receiving any payment from debtors in

cash and all payments must be received only by cheque or pay order and be

deposited in the existing account of M/s New Jagran Enterprises. The

respondent shall keep the account book of the firm intact. Parties are also

restrained from selling, disposing of or giving on lease the movable and

immovable assets of the firm M/s New Jagran Enterprises and from carrying

on any business in the name of the firm till the disputes between the parties

be resolved through arbitration. The petitioner is directed to initiate the

arbitration proceedings within 8 weeks from today.

With above directions, this petition stands disposed of.

May 28, 2009                                       SHIV NARAYAN DHINGRA J.
rd




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