GREEN VIEW ENGINEERS AND CONTRACTORS DHARWAD Vs. VIJAY ASHOK

JUDGEMENT

(1.) The first petitioner is a registered partnership firm of which the petitioners No.2 and 3 were the partners. In fact, the petitioners No.2 and 3 are husband and wife. During the course of these proceedings the husband Sri Steve passed away. It is therefore sought to be contended at the hands of the learned counsel for the respondent who had entered into an agreement with the partnership firm that since partnership firm which had only two partners is now left with only a single partner, the partnership firm is no more a legal entity in the eye of law. It is therefore sought to be contended that the writ petition cannot proceed any further to redress the grievance of the partnership firm.

(2.) However, learned counsel Sri K.L. Patil has drawn attention of this Court to a decision of the apex Court in the case of Ravi Prakash Goel Vs. Chandra Prakash Goel and Ors. reported in AIR 2007 SC 1517 and contends that the consequences of the death of a partner of a partnership firm and the rights of such partnership firm vis -vis the other party with whom the partnership firm had entered into an agreement which contains an arbitral clause, has been considered by the Hon'ble Apex Court and it has been held that when a partner dies and the partnership comes to an end it is not only right but also the duty of the surviving partner to realize the assets for the purpose of winding up of the partnership firm including payment of partnership debts.

(3.) This Court finds that the Hon'ble Apex Court has in fact considered the consequence of one of the two partners of a partnership firm dying during the course of proceedings between the partnership firm and of third party. The Hon'ble Apex Court has considered the provisions contained in Sec. 40 of the Arbitration Act and has held that it is clear from Sec. 40 of the Arbitration Act that an arbitration agreement is not discharged by the death of any party thereto and on such death it is enforceable by or against the legal representatives of the deceased, nor is the authority of the arbitrator revoked by the death of the party appointing him, subject to the operation of any law by virtue of which the death of a person extinguishing the right of action of that person. Further, the definition of the word "legal representative" as defined in Sec. 2(1)(g) of the Arbitration Act was also considered and it was held that the definition of "legal representative" becomes necessary because such representatives are bound by and also entitled to enforce an arbitration agreement. Reading the said definition along with Sec. 40, it was held that Sec. 40 clearly says that an arbitration agreement is not discharged by the death of a party. The agreement remains enforceable by or against the legal representatives of the deceased. It was therefore opined that a person who has the right to represent the estate of deceased person occupies the status of a legal person. Sec. 35 of the 1996 Act which imparts the death of finality to an arbitral award says that the award shall have binding effect on the parties and persons claiming under them. It was further held that persons claiming under the rights of a deceased person or personal representative of the deceased party have right to enforce the award and are also bound by it.