Decided on November 02,1970

M.P. Lokiah And Ors. Appellant
V.M. Jayaram Naidu Respondents


Ganesan, J. - (1.) The petitioners -defendants are the appellants and they are aggrieved that the learned Sixth Assistant Judge, City Civil Court, Madras, had dismissed their application in O.S.No. 31 of 1970 for stay of all further proceedings in the said suit and for reference of the matter to arbitration.
(2.) The appellants and the respondent -plaintiff constituted a partnership firm under the name and style of M/s. Nethaji Brick Works and the first appellant was the managing partner thereof. The respondent has instituted the suit in question for dissolution of the partnership and for accounts and has contended in the suit inter alia that the first appellant was manipulating the account books of the firm and was making secret profits for himself. After the institution of the suit the respondent has also filed an application (I.A. No. 32 of 1970) for the appointment of a Commissioner to seize the account books and other records of the firm and accordingly a Commissioner was appointed for the said purpose and account books and records of the firm were seized and produced by the Commissioner before the Court. The appellants have filed an application (I.A.No. 958 of 1970) on 16th January, 1970 for the return of the account books and records seized by the Commissioner and have also filed on the same date I.A. No. 959 of 1970 out of which the present appeal arises for stay of all further proceedings in the suit and for referring the matter to arbitration in pursuance of a clause in the partnership agreement which provides for arbitration in case of dispute among the partners.
(3.) The main contention of the respondent -plaintiff is that, as the appellants have filed I.A. No. 958 of 1970 for return of the account books seized by the Commissioner, the application would amount to taking a step in the proceedings contemplated by Sec. 34 of the Arbitration Act and that they are therefore disentitled to ask for a stay of the suit. The learned trial Judge had upheld the respondents' contention and had consequently dismissed the application for stay.;

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