1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION. ARBITRATION PETITION NO.211 OF 2008. Vasant Satyanarayan Mishra ) A-4/1, Nutan Jeevan ) Co-operative Housing ) Society Ltd., Kripa Nagar, ) S.V. Road,Vile Parle (West) ) Mumbai-400 056. )..Petitioner Versus Satyanarayan Mishra, ) A-4/1, Nutan Jeevan Co-op. ) Housing Society Ltd., ) Kripa Nagar,S.V.Road, Vile ) Parle (West), Mumbai-400056 )..Respondent .... Mr.Y.K.Sharma i/b Ganesh and Co. for petitioner. Mr.R.K.Shukla i/b M/s V.B.Tiwari & Co. for respondent. .... CORAM: S. J. KATHAWALLA, J. DATE : 20TH MARCH, 2009. P.C. : By this petition, the petitioner is seeking reliefs against the respondent under section 9 of the Arbitration and Conciliation Act, 1996. The petitioner is the son of the respondent. This Court, therefore, made 2 several attempts to have the disputes between the petitioner and the respondent settled. However, the parties were unable to settle their disputes and therefore, this Court proceeded to hear the petition on merits. The brief facts giving rise to this matter are as under :- 2. The respondent/father is the Editor of Jeevan Prabhat Magazine and had been associated with other periodicals Aruvrata of (Kolkata) Ram Sandesh (Dehradun) and Navnit Hindi Digest, etc. The respondent was running the business of printing and publications of books in the name of Jeevan Prabhat Prakashan as a sole proprietor since 1968-69 till he converted the sole proprietary firm into a partnership firm, styled as Jeevan Prabhat Press in the year 1980 by involving his eldest son (the petitioner) as a partner of the said firm. According to the respondent, the entire capital invested in the said partnership by way 3 of cash, plant machineries, working capital and the Gala No.221, Guru Govind Singh Industrial Estate, Goregaon (East), Mumbai-400 063 (the said premises) belongs solely and exclusively to the respondent and that the petitioner had no right, title and/or interest in the same. According to the respondent in the year 1980, the petitioner who was just 20 years old was unemployed and had no independent source of income. The petitioner was married. He had two children and was residing with the respondent. The respondent, therefore, inducted the petitioner in the respondent s business. 3. Admittedly, a deed of partnership was executed on 1st April 1980 and was registered with the Registrar of Firms on 17th January 1981. Some of the relevant clauses forming part of the partnership deed are reproduced hereunder :- (1) The firm's name and style of this partnership shall be M/s.JEEVAN PRABHAT PRESS or in any 4 other name/names as the parties hereto may decide from time to time. (2) The business of printing press will be carried on at 221, Guru Govindsingh Ind. Estate, Near Ghas Bazar, Goregaon (East), Bombay-400 063. (4) The duration of the partnership shall be AT WILL . (24) On the termination of the partnership the parties hereto shall cause a full and accurate inventory to be prepared of the affairs of the partnership taking into account all the assets and profits, losses to be paid first out of the profits, next out of the capital and lastly if necessary, by the partners mutually out of their capital account or by bringing in their amount in proportion to which they were entitled to share the profits and losses. The profits on termination of the partnership 5 shall be shared in the ratio aforesaid. (25) Any dispute or difference which may arise between the partners or their respective heirs and/or their legal representatives with regard to the construction, meaning and/or effects of this DEED or any part thereof relating to the accounts and affairs of the partners under this DEED or the dissolution of the winding up of the business or any other matter relating to the partnership firm shall be referred to the sole Arbitration of the Arbitrator to be appointed by all the parties by consent. The provisions of the Arbitration Act, 1940 of the law for the time being in force shall be applicable to these presents. 4. Prior to the filing of the petition, the petitioner had served his Advocate's notice dated 10th March 2008 on the respondent. In the said notice, it is alleged that the said 6 premises was an asset of the partnership. It was further alleged that the petitioner solely looked after the entire business of the partnership and that the respondent being old and having indifferent health never looked after the business of the partnership and was practically a sleeping partner of the partnership firm. However, the respondent kept the entire account in his hands and solely and exclusively handled all bank accounts and all financial transactions of the business. It was also alleged that the respondent was the only person who signed and issued cheques and made payments and also received all payments made to the partnership firm. It was further alleged that on 30th April 2007, the respondent without the knowledge and consent of the petitioner, sold the said premises for a paltry sum of Rs.35,00,000/- only and has taken a huge amount in cash, and after selling the said premises and plant and machineries, the 7 respondent has deposited in banks in his name alongwith the names of his other sons cash amounts and have purchased number of flats and has allowed his other sons to live in them. In the said notice, it was alleged that after selling of the said premises and the plant and machineries, no business of the partnership is remaining and therefore, the respondent was given notice for dissolution of the partnership. By the said notice, the petitioner also invoked the arbitration agreement, contained in clause 25 of the partnership agreement. The respondent was called upon to pay a sum of Rs.50,00,000/- which included half the amount of the sale proceeds of the partnership assets as also the petitioner s share in the profit and goodwill of the said partnership. 5. The above notice was replied to by the respondent by his letter dated 14th March 2008 wherein after recording that the contentions of 8 the petitioner in his Advocate's notice are incorrect and distorted and the averments and claims made by him are denied the respondent took the following categorical stand :- (i)The said premises was the exclusive property of the respondent. (ii) The colour offset machine, which was obtained on loan from N. S. I. C. Ltd., had been taken away by the N. S. I. C. Ltd. for default in payment and even now huge amount is outstanding and by letter dated 18th January 2008, an offer of one time settlement was given by the said N. S. I. C. Ltd. (iii) That the petitioner is fully aware that since 1994-95, the business was discontinued and the petitioner disposed of the small machineries, tools, furniture, unused papers, steel racks, etc. All records pertaining to the partnership were in possession of the petitioner and only he could say what was done with the records. (iv) The petitioner was aware of the present and past status of the business as he was the person who was in regular 9 touch with the Chartered Accountant, Shri D.P. Tripathi. (v) That a one bed-room hall kitchen flat at Mira Road was booked by the respondent and thereafter, transferred in the name of the petitioner and that the entire consideration of the said flat was paid by the petitioner. (vi) That in view of the facts and circumstances set out in the reply, the demands made by the petitioner by his Advocate's notice are unjust, unfair, illegal and hence cannot be complied with. 6. The petitioner thereafter filed the above petition on 1st April 2008. Despite the specific stand of the respondent in his reply to the notice of the petitioner s Advocate that the said premises solely belonged to the respondent, in the said petition, the petitioner maintained his stand that the said premises belonged to the partnership. He did not aver/contend that even though the said premises are not shown as an Asset of the 10 partnership, the said premises were purchased out of partnership funds. He also repeated his contention that the respondent was a sleeping partner in all respects and that the petitioner looked after the entire business and that the accounts of the partnership were solely and exclusively handled by the respondent. It is contended in the petition that on many occasions, the petitioner demanded to look into the accounts of the partnership and its profit and loss statement but the respondent on one pretext or the other, refused to furnish the same. The petitioner alleged that he did not insist much on knowing the accounts of the partnership firm thinking that being his father, the respondent would not hide anything from him or dupe him. The petitioner has also set out in detail the disputes which had arisen between the respondent and the other children of the respondents, i.e. the brothers of the petitioner, pertaining to their residential 11 premises since the year 2000. There are complaints and counter complaints by the parties registered with the Juhu Police Station. The petitioner has alleged in the petition that on 30th April 2007, the respondent has without the knowledge and the consent of the petitioner sold the said premises which included printing machines and printing materials without the knowledge and consent of the petitioner, which amount he has deposited in banks and has purchased flats at Mira- Bhyander Road from the amount received therefrom. The petitioner has, therefore, in the present petition prayed for reliefs set out hereunder :- (a) Pending the hearing and final disposal of arbitral proceedings and the passing, enforcement and execution of the award therein, to restrain the respondent from in any manner utilizing the amount received by the respondent from and out of the sale proceeds of the partnership premises and from withdrawing 12 any amount from the fixed deposit made by him from the sale proceeds of the partnership premises. (b) Pending the hearing and final disposal of arbitral proceedings and the passing, enforcement and execution of the award therein, to restrain the respondent from in any manner selling, disposing of alienating, creating third party rights with regard to the said premises. (c) Pending the hearing and final disposal of the Arbitration proceedings and the passing, enforcement or execution of the Award thereon, to appoint receiver of all the assets, books of accounts, vouchers and other relevant documents of the partnership including the amount lying and being in fixed deposit made by the respondent and that of the said premises. 7. The respondent in his written statement has reiterated the stand taken by him in his reply dated 14th March 2008, in response to the notice of the petitioner's Advocate dated 10th March 2008. 8. The petitioner in his affidavit dated 13 24th September 2008 admitted for the first time that the agreement for the said premises dated 20th April 1982 was between the respondent and one Mr. Jayantilal K. Doshi, clearly indicating that, the partnership firm was not a party to the Agreement pertaining to the said premises. However, he now contended that an amount of Rs. 15,000/- was paid by the respondent from Dadhich Sahakari Bank Limited, in which the partnership firm had an account. He further contended that certain installments were paid from Syndicate Bank and the partnership firm also had an account with Syndicate Bank. He submitted that though the respondent has contended that the partnership firm business is discontinued since 1994-95, the respondent is carrying on the business in the name of the firm till date. He has produced photo-stat copies of certain publications, where the partnership firm is shown as the Printer of the said Publication. The petitioner also relied 14 on certain hand written/typed statements where against certain amounts, the word Sydicate Bank was written by the respondent. 9. When the petition was argued before this Court, initially, the learned Advocate appearing for the petitioner reiterated before this Court that all the partnership records, more particularly, the account books are with the respondent and that he has nothing in his possession, since the respondent disposed of the said premises behind the back of the petitioner on 30th April 2007. He, therefore, relied on a copy of the agreement entered into by and between the respondent and one Mr. Jayantilal K. Doshi, wherein it is mentioned that an amount of Rs.15,000/- is paid from Dadhich Syndicate Bank and certain amounts from Syndicate Bank, where the partnership firm has an account. At this point of time, this Court informed the learned Advocate for the petitioner that from the said statement, it 15 cannot be said that the respondent has made payment from the partnership account as the respondent may also be having his accounts in the same bank. Thereupon, the learned Advocate for the petitioner informed the Court that he will produce the books of accounts of the partnership firm and satisfy the Court that the accounts from which the respondent has paid the amounts towards the purchase price of the said premises are indeed from the account maintained by the partnership firm with the said banks. This Court after recording the aforesaid fact by its order dated 30th January 2009 gave time to the petitioner upto 2nd February 2009, to produce the books of accounts. On 2nd February 2009, the learned Advocate for the petitioner once again contrary to what was earlier submitted on behalf of the petitioner viz. that he has no records pertaining to the partnership firm, submitted that the partnership records are in bulk and therefore, petitioner needs 16 time to produce them. The matter was, therefore, once again adjourned to 6th February 2009. On 6th February 2009, the learned Advocate for the petitioner once again submitted that there are heaps of records pertaining to the partnership firm from which he has taken out some letters which will corroborate the case made out in the petition. He also submitted that he is also trying to get some documents from Syndicate Bank, Andheri Branch, where the said partnership firm had an account. 10. In view thereof, once again at the request of the petitioner, the matter was adjourned to 13th February 2009. Thereafter, the only letter on which the petitioner heavily relied on is the letter dated 15th December 1982 written by the respondent to the Industrial Commissioner for the grant of N. O. C. to carry on his business of printers and publishers from the said premises. In connection with the 17 same, the respondent has set out therein the particulars of his sale agreement and the amounts paid towards the purchase of the said premises. From the particulars given therein, the learned Advocate for the petitioner has submitted that this Court should conclude that the respondent has paid certain installments from the partnership account. Interestingly, the petitioner has not produced the books of accounts before this Court though admittedly he is in possession of the same as well as all the records of the partnership firm. 11. As stated hereinabove, the respondent had in his reply dated 14th March 2008 informed the petitioner's Advocate that the respondent is the sole owner of the said premises and that the said premises is not an asset of the partnership firm. Though the petitioner had in his possession the books of accounts of the partnership firm as well as the entire records of the partnership, he did not produce any 18 document before this Court at the time of filing of his petition and in fact, took a stand that the said premises is an asset of the partnership and that the petitioner had no documents pertaining to the accounts of the said partnership and that all the records are with the respondent who has not shown the same to the petitioner despite request. In fact, the petitioner in support of his contention that the respondent is in possession of all the accounts/records, of the partnership, has in prayer clause (c) of the petition sought appointment of the Court Receiver of all the assets, books of accounts, vouchers and other relevant documents of the partnership. The petitioner in my view, has, therefore, approached this Court with a totally dishonest case and with unclean hands. The petition itself is filed by the petitioner on a totally dishonest premise, viz. that the said premises is an asset of the partnership and all the 19 books of accounts and other records pertaining to the partnership are with the respondent. He has willfully suppressed the fact from this Court that all the books of accounts as well as the records pertaining to the partnership are in his possession and has wrongly contended that the same is in possession of the respondent. It is obvious that he has done this with an intention of making out a false case that the said premises is an asset of the partnership firm because he was well aware that the books of accounts and the accounts of the firm would show that the said premises were never treated as an asset of the partnership. A false case was made out by the petitioner also because the custody of all the books of accounts as well as partnership records in the custody of the petitioner would go to show that the said premises were disposed of by the respondent to the knowledge of the petitioner and not behind his back as alleged in the 20 petition. This Court is also of the view that the petitioner has come up with a false case only because certain disputes pertaining to the residential premises of the petitioner with his father and his other siblings are not resolved and by raising the present partnership disputes, he actually desires a settlement of those disputes. In my view, the petitioner is not entitled to any reliefs, he having approached this Court with unclean hands as set out aforesaid. 12. In any event, prayer clauses (a) and (b) in the petition pertains to the said premises which is not an asset of the partnership firm. Prayer clause (c) pertains to appointment of Court Receiver in respect of books of accounts, vouchers, documents, etc. which are now admittedly in the petitioner s possession. The documents which the petitioner has subsequently tried to produce to show that the respondent had paid certain amounts from the partnership 21 account towards the purchase price of the said premises is also not satisfactory or convincing and does not support the case of the petitioner that the respondent has made the said payment from the partnership account. Therefore, even otherwise the question of granting any relief to the petitioner as sought does not arise. 13. In view thereof, the petitioner is not entitled to any protective reliefs and the petition stands dismissed. [S. J. KATHAWALLA, J.]