1 11.arbp.1229.10.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION skt ARBITRATION PETITION NO. 1229 OF 2010 Bimladevi Vijan & Mahinder Kumar Vijan ... Petitioners Vs. Chandraprakash Vijan ... Respondent ...... Mr.Sandeep Parikh i/by Legal Liaisons for the Petitioners. Mr.H.Toor a/w. Ms.Aparna Shinde for the Respondent. ...... CORAM : S.J. VAZIFDAR, J. DATE : OCTOBER 6th, 2010. P.C. 1 This is a petition under Section 9 of the Arbitration and Conciliation Act, 1996. 2 The Petitioners seek the appointment of a Court Receiver and the usual injunctions in an action for dissolution and accounts of a partnership. 3 Petitioner No.1 is the mother of Petitioner No.2 and the Respondent. The Petitioners and the Respondent carry on business in the firm name and style of M/s.Hind Automobiles (Dongri) on the terms and conditions contained in a deed of partnership dated 20th November 1995. Clause 25 thereof is an arbitration agreement. Each of the parties have a 2 11.arbp.1229.10.sxw 1/3rd share in the profits and losses of the partnership firm. The partnership is at will. Clause 13 of the partnership deed reads as under : “13. The tenancy rights of the business premises being the said plot of land bearing Plot No.113-114 (part) of Sandhurst Road (East) Estate, Scheme No.3, situate at 70, Sardar Vallabhbhai Patel Road, Chinchbundar Naka, Dongri, Bombay 4009 009 from which the partnership business shall be carried on belong to the parties hereto in proportion to their profit sharing ratio.” 4 There is, therefore, no doubt that all the parties are entitled to a 1/3rd share not merely in the profits and losses but in all the properties of the firm. 5 In these circumstances, the normal order of the appointment of a Court Receiver ought to follow. 6 Mr.Toor, the learned counsel for the Respondent stated that the Respondent had been exclusively running the business and had maintained the accounts properly and distributed the profits justly. This is strongly denied by the Petitioners. For instance, the Petitioners have invited my attention to the alleged accounts of the firm which show a gross sale of over Rs.7.50 crores but a profit of only Rs.2,50,000/-. 3 11.arbp.1229.10.sxw According to them, the Respondent has been siphoning monies from the accounts of the firm. 7 To test the Petitioners bona fide, I asked the Petitioners whether they were willing to run the partnership business with a minimum guarantee of over Rs.2,50,000 /-per annum. They immediately agreed to do so. 8 Mr.Toor stated that in the affidavit in reply filed in the suit filed by the Respondent in respect of a flat, which was allegedly owned by the father, the Petitioners stated that they were not aware of the Will. There is, however, some dispute as to who was in possession of the will and about the authenticity of the copy thereof. 9 The contention that the wrong arbitration clause has been invoked requires merely to be stated to be rejected. The partnership deed admittedly contained the arbitration clause. The partnership firm had entered into an agreement with HPCL. This agreement also contained an arbitration clause. According to Mr.Toor, as any order affecting the partnership firm would affect the agreement between the firm and HPCL, the Petitioners ought to have invoked the arbitration clause of the HPCL agreement. The agreement between the firm and HPCL does not deal with the 4 11.arbp.1229.10.sxw rights and liabilities of the partners inter se. These rights are governed only by the partnership deed and not by the agreement with HPCL. No further reasons are required to reject this submission. 10 Mr.Toor submitted that any order appointing a Court Receiver would adversely affect the rights of the firm under the agreement with HPCL. This, however, would not justify allowing the Respondent to carry on the business of the partnership firm to the exclusion and to the detriment of the other partners viz. the Petitioners. In any event, the order I intend passing would as far as possible obviate such consequences for the firm. 11 The petition is, therefore, disposed of by the following order : (i) The petition is made absolute in terms of prayer (b) except the words bracketed in red. It is clarified that the Court Receiver, High Court, Bombay is appointed only to take formal possession and to appoint an agent in the usual manner. (ii) The parties shall be at liberty to bid for the agency of the Court Receiver. (iii) Till the Court Receiver takes possession, there shall be an order in terms of prayer (d) except the words bracketed in red. 5 11.arbp.1229.10.sxw (iv) By consent, the disputes and differences between the parties under and in respect of the partnership business are referred to the sole Arbitration of Mr.Satish J. Shah, Advocate practicing in the Court. (v) The petition is made absolute in terms of prayer (a). The same shall be complied with on or before 31st October 2010. (vi) This order is stayed up to and including 31st October 2010 only in so far as it relates to the appointment of the Court Receiver. -