:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION ARBITRATION APPEAL NO.23 OF 2007 ARBITRATION APPEAL NO.23 OF 2007 ARBITRATION APPEAL NO.23 OF 2007 Surendra Bhagchand Patel & Anr. ...Appellants V/s. Sadhna Prakash Sisodiya & Anr. ...Respondents Mr. G. S. Godbole with Mr. Ashok B. Tajane for the Appellants. Mr. Chetan Agarwal and Mr. S. G. Ladda for the Respondent No.1. Mr. Mangal S. Bhandari for the Respondent No.2. CORAM : S. A. BOBDE, J. CORAM : S. A. BOBDE, J. CORAM : S. A. BOBDE, J. DATE : 17TH OCTOBER, 2008. DATE : 17TH OCTOBER, 2008. DATE : 17TH OCTOBER, 2008. P.C. P.C. P.C. . After hearing the matter for some time, the following order is passed by consent. 2. The order dated 21st June, 2007 is upheld except to the following extent : 3. The learned Judge has ordered as follows : "If the firm is required to pay to any third party towards the liabilities of the firm and if all the parties agree on the point that the said liability is incurred by the firm, then the said liability shall be defrayed by consent of all the partners and preferably the amounts so defrayed will be paid by a cheque drawn from the said account. If any cash transaction is to be performed for the benefit of :2: the firm, the same can be done with the consent of all the partners." 4. Instead of the above, it is directed that the liability of Suvarna Nagrik Sahakari Pat Sanstha shall be defrayed out of the firm account. The appellant agrees that his share in income of the firm to the extent of Rs.7,00,000/- shall be retained in the account as his security for the shares of the other two partners in case it is ultimately held in the arbitration proceedings that the loan was taken by the appellant in his personal capacity and not for and on behalf of the firm. 5. The parties agree that the amount lying in the account of the firm shall be utilised for payment of all tax charges and other dues payable to the Government on any account. Such payment shall be made by respondent no.2 from the firm account under intimation to the arbitrator on being informed by the appellant as to the existence of the dues. 6. If the parties consider it appropriate that the firm account should be utilised for making of any payment to a third party other than liability of the aforesaid Bank, the parties shall be at liberty to apply to the arbitrator for permission in that regard. The appellant shall however ensure that an :3: amount of Rs.7,00,000/- is retained in the firm account till the final adjudication of the arbitration proceedings. This amount of Rs.7,00,000/- shall be invested in a fixed deposit of a nationalized Bank pending the outcome of the arbitration proceedings. 7. The fifth last paragraph of the order dated 21st June, 2007 shall stand modified to allow the agreement recorded by this Court today. 8. Order accordingly. S. A. BOBDE, J. S. A. BOBDE, J. S. A. BOBDE, J.