1 CAR3.11 srp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPLICATION NO. 3 OF 2011 IN ARBITRATION APPEAL NO. 5 OF 2011 ALONGWITH ARBITRATION APPEAL NO. 5 OF 2011 Mr. Dilip Yashwant Bhosale ... Appellant/ Applicant Vs 1. Mrs. Sunanda Deepak Bhosale & Ors. ... Respondents Mr. S.M. Oak i/b Sagar Joshi for the Appellant. Mr. Shailendra S. Kanektar for the Respondent No.1. CORAM : S.J. VAZIFDAR, J. FRIDAY, 26TH AUGUST, 2011. P.C. : 1. Admit. 2. This is a partnership dispute. The parties carry on business on the terms and conditions contained in a partnership deed dated 5th January, 1990. The appellant, respondent No.1 and one Smt. Indira 2 CAR3.11 Yashwant Bhosale had a 30% : 50% : 20% share respectively in the profit and losses of the firm. The said Smt. Indira Yashwant Bhosale expired on 11th November, 2009. Respondent No.2 is her husband. Respondent Nos.3 and 4 and the appellant are the sons of respondent No.2 and the deceased. Respondent Nos.5 and 6 are their daughters. 3. The partnership deed is admitted. The shares are admitted. The partnership is at will. There admittedly are disputes and differences between the parties. The main business of the firm is of running a hotel on a property which is owned, not by the firm, but by the appellant and respondent No.3 - Deepak Yashwant Bhosale in equal shares. 4. Proceedings have been adopted in respect of the property. The appellant had filed A.O. No.88 of 2011. By an order dated 16th August, 2011, the learned Judge recorded the fact that respondent No. 3 carries on business in the entire premises to the exclusion of the appellant, despite the fact that the premises belong to both of them. The learned Judge further recorded that with regard to the business, the present arbitration appeal is pending and that an equal share in the 3 CAR3.11 premises would have to be granted to the appellant and respondent No.3 as they own the same equally. The learned Judge recorded that so far as the premises are concerned, upon the admission of the shares, the appellant therein would be entitled to the same and that pending the partition, the enjoyment of the property by both the parties would follow as a matter of course. However, as the arbitration petition was pending, no orders were passed at that stage. The matter is still pending. 5. The partnership was terminated by a notice dated 4th August, 2008. The appellant filed a petition under section 9 on 30th March, 2010. The impugned order was passed on 26th August, 2010. 6. By the impugned order, the learned Judge rejected the application under section 9. The learned Judge firstly held that under the deed of partnership, respondent No.1 was to look after the day to day affairs of the business and, therefore, refused the reliefs sought. 7. That arrangement, however, would continue only so long as the firm subsisted. Upon the dissolution of the firm, the clause cannot be 4 CAR3.11 given effect to. When a dissolution takes place, especially in view of the disputes between the parties, it is neither just nor desirable to permit only one party to carry on the business pending the dissolution of the firm to the exclusion of the other. Arrangement such as these are founded upon and, therefore, subsist so long as the trust between the parties subsists. Once the firm is dissolved, it is necessary to protect the shares of all the partners. Absent anything else, this cannot be done as per the arrangement that was agreed upon between the parties based upon trust and which basis ceases to subsist. 8. The fact that the property in which the business of the firm is being carried on does not belong to the firm is immaterial. I do not intending passing any order as regards that property. The necessary orders regarding the same must be sought in the partition suit/A.O. No.88 of 2011. 9. Nor do I find any delay or latches such as to deny reliefs in such an action. Parties were understandably negotiating a settlement. They are all members of the same family. The mere fact that proceedings have been adopted after delay of about two years would not justify a 5 CAR3.11 refusal of the interim orders. Moreover, in the present case, the delay has not caused any prejudice to the respondents. In fact, it has worked to their benefit for, during this period, they have had the benefit of running the business to the exclusion of the appellant. 10. In the circumstances, prima facie, at least, the normal rule ought to follow viz. the appointment of the Court Receiver of the assets of the firm with a direction to the Court Receiver to appoint an agent in respect of the business of the firm. 11. In the circumstances, pending the hearing and final disposal of the appeal, the Court Receiver, High Court, Bombay, is appointed as Court Receiver in respect of all the assets, movable and immovable, of the firm. The Court Receiver shall appoint an agent to run the business of the firm. The parties are at liberty to bid for the agency of the Court Receiver. Mr. Oak states that the appellant will not carry on the business in the name of the said firm. The statement is accepted. The Civil Application is, accordingly, disposed of. 9. This order is stayed upto and including 30th September, 2011.