IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN TUESDAY, THE 8TH MARCH 2011 / 17TH PHALGUNA 1932 AR.No. 51 of 2010 PETITIONER ---------------------- I.PATHROS, CHARTERED ENGINEER(CIVIL), S/O.YOHANNAN, PRAVATTY HOUSE, MEKKAD KARA, NEDUMBASSERY VILLAGE, ANGAMALY SOUTH-683 573. BY ADV. SMT.RESHMI JACOB SRI.K.PRABHAKARAN RESPONDENTS: --------------- 1. SRI.BINIL K.JOHN, S/O.K.T.YOHANAN, KOORAN HOUSE, ANGAMALY P.O., ANGAMALY, KERALA. 2. SRI.K.T.YOHANAN, S/O.THARIATH, KOORAN HOUSE, ANGAMALY P.O., ANGAMALY, KERALA. R1 BY ADV. SRI.S.VINOD BHAT R2 BY ADV.SRI.V.GOPAKUMAR THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 08/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.T.SANKARAN, J. ------------------------------------------------------ Arbitration Request NO. 51 OF 2010 ------------------------------------------------------ Dated this the 8th day of March, 2011 O R D E R The petitioner and respondents 1 and 2 along with K.P.Paul were conducting a partnership business under the name and style “Valluvanad Granites”. Sri.K.P.Paul retired from the partnership. On 2.11.2005, Annexure I partnership deed was executed among the partners. As per the partnership deed, the first respondent shall be the Managing Partner. Disputes and differences arose between the petitioner on the one hand and the respondents on the other. Notices were issued and correspondence took place between the parties. The petitioner wanted to appoint an Arbitrator invoking clause 22 of the partnership deed dated 2.11.2005. Since that request was not accepted by the respondents, the petitioner filed this Arbitration Request. 2. The first respondent filed objections dated 3.1.2011 and additional objections dated 27.1.2011. The first respondent contended that in 2009, the deed of partnership was amended as per ARBITRATION REQUEST NO.51 OF 2010 :: 2 :: Annexure R1(a) inserting clause 25 therein. Invoking that clause, the petitioner was expelled from the firm with effect from 30.1.2010. The factum of expulsion from the partnership was published in the newspapers. It is stated that the books of accounts of the firm are in the custody of the petitioner. The first respondent contended that the Arbitration Request is intended only for resolving the disputes and differences arising between the partners or their legal heirs. The petitioner having been expelled from the partnership, he cannot invoke the arbitration clause. Along with the additional objections, the first respondent has produced several documents which are mainly correspondence between the parties and copies of the statement of assessments. 3. The second respondent filed objections, in which, he has raised a contention that the property belonging to him, which was being used for the purpose of the partnership, has lost its intrinsic value and the firm and its partners are liable to compensate the second respondent. 4. Sri.Vinod Bhat, the learned counsel appearing for the first ARBITRATION REQUEST NO.51 OF 2010 :: 3 :: respondent, submitted with reference to paragraphs 36 and 38 of the decision of the Supreme Court in M/s.S.B.P. & Co. v. M/s.Patel Engineering Ltd. and another (AIR 2006 SC 450) that the Arbitration Request is not maintainable as the petitioner did not raise objections to the statement of accounts. Sri.Vinod Bhat referred to clause 13 of the partnership deed, which reads as follows: “13. That proper books of account shall be kept by the firm and on the 31st day of March, 2006 for the first time and on every succeeding financial year ending on 31st March, a true, correct and full account of the assets and liabilities as also the profit and losses of the partnership firm, duly audited by a qualified auditor shall be taken from the books kept for the purpose. Each manifest error shall be discovered within THREE MONTHS, in which case, such error shall be rectified.” 5. I have carefully gone through the judgment of the Supreme Court in M/s.S.B.P. & Co. v. M/s.Patel Engineering Ltd. and another (AIR 2006 SC 450). The findings in paragraphs 36 and 38 do not support the contention put forward by the first respondent. Paragraph 13 of the partnership deed only states that each party shall be bound by the statement of accounts unless manifest error ARBITRATION REQUEST NO.51 OF 2010 :: 4 :: shall be discovered within three months. That clause does not in any way affect the right of the petitioner to file the Arbitration Request, nor does it affect the jurisdiction of the court to appoint an Arbitrator. Likewise, the contention put forward by the first respondent that since the petitioner was expelled from the partnership, he cannot invoke the arbitration clause, is unsustainable. All the disputes and differences between the partners are arbitrable going by clause 22 of the partnership deed. It is not necessary that as on the date of filing of the Arbitration request, the petitioner should be a partner. Even an expelled partner is entitled to invoke the arbitration clause. 6. For the aforesaid reasons, I am of the view that the objections raised by the first respondent are not sustainable. It is necessary to appoint an Arbitrator. The learned counsel for the petitioner as well as the learned counsel appearing for the first respondent submitted that Sri.N.Sukumaran, Retired District Judge, can be appointed as the Arbitrator. Accordingly, the Arbitration Request is allowed. Sri.N.Sukumaran, Retired District Judge, is appointed as the sole ARBITRATION REQUEST NO.51 OF 2010 :: 5 :: Arbitrator. The Arbitrator shall resolve the disputes between the petitioner and the respondents touching upon the partnership referred to above. The Arbitrator would be entitled to fix his fee. The parties are free to put forward their contentions before the Arbitrator and the maintainability or otherwise of the same shall be considered by the Arbitrator. (K.T.SANKARAN) Judge ahz/