IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN WEDNESDAY, THE 26TH MAY 2010 / 5TH JYAISHTA 1932 AR.No. 7 of 2010 PETITIONER: RAJU.P.P, S/O.MANI PAPPU, PUTHUSSERY HOUSE, ERUMATHALA PO, ALUVA-5. BY ADV. SRI.DINESH MATHEW J.MURICKEN RESPONDENTS: 1. SHIBU.M.G., S/O.LATE M.B.GOPI, MATTAMTHOTTATHIL HOUSE, ERUMATHALA PO, ALUVA-5. 2. AJIKUMAR.K.R, S/O.K.K.RAMAN, KEEZHPPURATHKUDY HOUSE, ERUMATHALA PO, ALUVA-5. 3. M.A.JOSEPH, S/O.M.A.ANTONY, MAZHUVANCHERY HOUSE, ERUMATHALA PO, ALUVA-5. 4. JERRY MATHEW, S/O.M.T.MATHAI, MAZHUVANCHERY HOUSE, ERUMATHALA PO, ALUVA-5. 5. CHANDRAN.P.K, S/O.P.K.KANDAN, PALACHOTTIL HOUSE,ERUMATHALA PO, ALUVA-5. 6. SHANTY VARGHESE, S/O.M.A.AUGUSTINE, MAZHUVANCHERY HOUSE, ERUMATHALA PO, ALUVA-5. 7. P.A.POULOSE, S/O.P.A.AUGUSTINE, PAYYAPPILLY HOUSE, ERUMATHALA PO, ALUVA-5. BY ADV. SRI.RAJIV NAMBISAN THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 26/05/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: K.T.SANKARAN, J. ------------------------------------------------------ Arb. Reguest NO. 7 OF 2010 ------------------------------------------------------ Dated this the 26th day of May, 2010 O R D E R The petitioner and the respondents are partners of a registered firm, namely, Bosco Clay Products, having its principal place of business at Erumathala, Aluva. The firm is engaged in the business of manufacture and sale of clay products. It is not in dispute that the partnership firm was constituted on 20.11.1993. Subsequently, the firm was reconstituted on 1.3.2002 as per Annexure A1. As per the reconstituted partnership, the petitioner is the Managing Partner of the firm. The firm owned immovable properties. According to the petitioner, an extent of 24.46 Ares of immovable property in R.S.No.79/6 of Aluva East Village, which belonged to the firm, was sold for a sum of Rs.24,22,500/- and instead of appropriating the amount for the purpose of the firm as agreed upon, the respondents misused the funds and purchased certain other properties in their names. It is also alleged that an account was opened in the State Bank of Travancore in the name of some of the respondents and the amounts were deposited in that account as if the amount belongs to them personally. It is alleged Arb.Request NO.7 of 2010 :: 2 :: that the petitioner was not allowed to perform his duties as the Managing Partner of the firm and therefore, he could not file returns before the Sales Tax and Income Tax authorities. Disputes arose between the partners. It is alleged that the respondents were taking hasty steps to sell the immovable property belonging to the partnership firm. It is stated that the petitioner was constrained to file O.P.(Arb.) No.1562 of 2008 before the District Court, Ernakulam (Annexure A2) under Section 9 of the Arbitration and Conciliation Act. It is stated that Annexure A2 is pending. 2. The petitioner sent Annexure A3 notice dated 14.8.2009 to the respondents, in which, it was mentioned that the disputes between the parties are to be referred to arbitration. Sri.A.K.Joseph, a retired District Judge, was suggested as the Arbitrator. The respondents sent Annexure A4 reply notice dated 7.9.2009, in reply to Annexure A3 notice. In Annexure A4, it was agreed that the respondents are ready for settling the issues by way of arbitration. However, the respondents suggested that Sri.K.Ramachandran, retired District Judge and who is a practicing advocate in the High Court of Kerala, shall be the sole Arbitrator. The respondents stated Arb.Request NO.7 of 2010 :: 3 :: in Annexure A4 that the disputes are slightly different. The relevant portion of Annexure A4 reads as follows: “According to my clients the following are the issues to be decided by way of Arbitration. They are: (a) To declare that the removal of your client from the post of managing partner of the firm and his expulsion from the partnership is valid and binding upon your client. (b) To declare that your client has only 1/8th share in the movable and immovable properties of the firm referred in paras five and six of this notice. (c) To audit the account of the firm for the year 2007- 08, 2008-09 and to share the profit and loss proportionately. (d) To declare that the reconstitution deed executed between my clients on 27.9.2008 is valid and binding upon your client.” 3. In the Arbitration Request, the terms of reference to the Arbitrator are the following: Arb.Request NO.7 of 2010 :: 4 :: “TERMS OF REFERENCE 1. Whether the expulsion of the petitioner from the partnership firm by the respondents is legally valid. 2. Whether the account of the firm for the years 2007- 08 and 2008-09 is properly maintained and audited and if not account may be audited by an auditor appointed by the arbitrator. 3. Whether the petitioner is entitled for profit share and if entitled what is the quantum of profit share payable to the petitioner for the year 2007-08 and 2008-09. 4. Whether the property purchased as per document No.3281/08 having an extent of 4.250 cents in Re.Sy.No.62/2 of Aluva East Village and as per document No.3944/08 having an extent 2.322 cents in Re.Sy.No.87/5/2 of Aluva East Village in the name of the respondents is using the assets of the partnership firm and whether it is the property of the partnership firm.” 4. The learned counsel for the petitioner submitted that the petitioner has no objection in appointing Sri.K.Ramachandran as the Arb.Request NO.7 of 2010 :: 5 :: sole Arbitrator as suggested by the respondents. He also submitted that the petitioner has no objection in the Arbitrator considering the disputes mentioned in the reply notice sent by the respondents, as quoted above. In the light of the submissions made by the learned counsel for the petitioner, the Arbitration Request is allowed. Sri.K.Ramachandran, retired District Judge and who is a practicing Advocate in the High Court of Kerala, is appointed as the sole Arbitrator. The Arbitrator shall decide the disputes between the parties as mentioned in the terms of reference in the Arbitration Request and also the disputes which the respondents have pointed out in paragraph 9 of Annexure A4 reply notice dated 7.9.2009. (K.T.SANKARAN) Judge ahz/