RAJMANI SINHA Vs. BASANT SINHA

JUDGEMENT

(1.) BY a registered deed of partnership (Ext. 13) dated 27th of December, 1960, the three appellants and respondents 1 and 2 constituted a partnership. The firm was to carry the name M/s. Bharat Engineering Company. Differences arose between them and as per Clause 18 of the deed of partnership, they were referred to arbitration of respondent No. 3. He made his award (Ext. 10) on 22-4-1967 and it was filed in court. Appellant No. 1 prayed for pronouncing judgment according to the award and preparing a decree. Appellants 2 and 3 supported him. Respondents 1 and 2 took objection to the award on various grounds. The court below by the order under appeal has refused to make the award a rule of the Court. It has set aside the award and superseded the reference. Hence the appeal

(2.) IN order to appreciate the controversies between the parties, some facts may briefly be stated. On 3rd of August, 1959, respondent No. 2, Surya Kumar Singh, appellant No. 3--Someshwar Kumar Singh and three others, Jang Bahadur Singh, Ram Ayodhya Singh and Ram Narain Singh, executed a partnership agreement, Ext. 13 (a), which was also registered. That firm too was to have the name of M/s. Bharat Engineering Company. The partnership business was deemed to have commenced on and from 3rd of January, 1959. The share of the partners was Surya Kumar Singh 25 per cent, Someshwar Kumar Singh 23 per cent, Jang Bahadur Singh 22 per cent, Ram Ayodhya Singh 10 per cent. and Ram Narain Singh 20 per cent. It is not in dispute that Jang Bahadur Singh and Ram Narain Singh did not contribute towards - the capital of the partnership firm or towards its labour. Only Ram Ayodhya Singh contributed a sum of Rs. 500/-. Subsequently this amount Was paid back to Ram Ayodhya Singh and all the three executed a registered deed of retirement from partnership. The deed was in favour of the appellants and respondents 1 and 2, the new partners of the firm. IN the partnership deed (Ext. 13) dated 27th of December, 1960, it was stated under Clause (3)--"This partnership business shall be deemed to have commenced on and from the third January, Nineteen Fifty Nine, and shall continue till it is dissolved in the manner mutually decided by the partners." The share of the new partners in the firm, according to paragraph 5 of the deed, was respondent No. 1 25 per cent, respondent No. 2 35 per cent, appellant No. 1 18 per cent, appellant No. 2 10 per cent and appellant No. 3 12 per cent. Paragraph 5 further recited that the amounts of money already contributed towards capital of the firm in pursuance of the terms of the previous agreement by respondent No. 2 and appellant No. 3 would be adjusted towards their shares according to the new agreement. Paragraphs 14 and 15 of the agreement ran as follows:--

(3.) IN paragraph 30 of his written statement (Ext. 11) before the Arbitrator appellant No. 1 stated that in the circumstances mentioned in the written statement he had no option but to dissolve the partnership business through letter dated 5th of December, 1966. IN paragraph 13 of his written statement, Ext. D (2), respondent No. 1 challenged the assertion of appellant No. 1 in paragraph 30 of his written statement and again said that he had no right to dissolve the partnership business nor it could be dissolved at the option of any other partner. IN his petition dated 26th of January 1967, Ext. 3 (c), appellant No. 1 again reiterated that the firm stood dissolved with effect from 5th of December, 1966 and claimed that an order should be passed for joint supervision of the outstanding work of the firm. The reply by respondent No. 1 to this petition of appellant No. 1 is Ext. F (1) and was filed on 31st of January, 1967. Paragraph 4 of it runs as follows:-- "The demand for the dissolution of the firm is an entirely different question and may lead to many unnecessary complications. Our purpose is a proper settlement of the accounts between all the partners of the firm and not the dissolution of the firm and as such it is deemed unnecessary to go into that matter here." On 19th of February, 1967, respondent No. 3, the Arbitrator heard the parties also on the point whether or not the firm was subsisting or stood dissolved.