Case: Pratap Singh Vs. Preetam Singh &amp; Anr

Pratap Singh, Preetam Singh and Diwan Singh are three brothers. Pratap Singh and Preetam Singh carried on business in partnership, at three places (1) Pipliya in Madhya Pradesh, in the name of the Jaora Slate Pencil Works; (2) Bombay, in the name of Partap Brothers; and (3) Nagpur, in the name of Nice Tiles and Marble, Nagpur. By an agreement dated December 18, 1965 disputes between Pratap Singh and Preetam Singh relating to the partnership business were referred to the arbitration of their brother Diwan Singh. The arbitrator entered upon the reference, but he was unable to complete the reference within four months. Diwan Singh applied to the Court of the Subordinate Judge, Delhi, under s. 28 of the Arbitration Act for extension of time. Preetam Singh objected to the jurisdiction of the Subordinate Judge at Delhi to entertain the application. The Subordinate Judge overruled the objection and granted extension of time for making the award. A revision application preferred against the order is pending before the High Court of DelhiIn the meanwhile Preetam Singh filed an action in the Court of the Additional District Judge, Mandsaur against Pratap Singh and Pritipal Singh (brother-in-law of Preetam Singh) for a decree for rendition of account of the dealing in respect of the Jaora Slate Pencil Works and for appointment of a receiver. By amendment of the plaint a claim for dissolution of partnership was also made. Pratap Singh applied under s. 34 of the Arbitration Act 1940 for stay of the suit, and the application was granted. But the Additional District Judge directed that a receiver be appointed of the properties of the Jaora Slate Pencil Works at Pipliya. Against that order an appeal was carried to the High Court of Madhya Pradesh. The High Court was of the view that a case was made out for the appointment of the receiver. The Court further held that having regard to the proceedings pending in the High Court at Delhi it was a case in which without adjudicating upon the jurisdiction of the Subordinate Judge at Delhi, the application for appointment of the receiver was maintainable. Against that order, with special leave, this appeal has been preferredIn the meanwhile Preetam Singh filed an action in the Court of the Additional District Judge, Mandsaur against Pratap Singh and Pritipal Singhw of Preetam Singh) for a decree for rendition of account of the dealing in respect of the Jaora Slate Pencil Works and for appointment of a receiver. By amendment of the plaint a claim for dissolution of partnership was also made. Pratap Singh applied under s. 34 of the Arbitration Act 1940 for stay of the suit, and the application was granted. But the Additional District Judge directed that a receiver be appointed of the properties of the Jaora Slate Pencil Works at Pipliya. Against that order an appeal was carried to the High Court of Madhya Pradesh. The High Court was of the view that a case was made out for the appointment of the receiver. The Court further held that having regard to the proceedings pending in the High Court at Delhi it was a case in which without adjudicating upon the jurisdiction of the Subordinate Judge at Delhi, the application for appointment of the receiver was maintainable. Against that order, with special leave, this appeal has beene only question argued in this appeal is about the jurisdiction of the Additional District Judge, Mandsaur to entertain the suit and to appoint a receiver. The relevant statutory provisions may in the first be noticed.

Court's reasoning:
It is true that an application for extension of time to make the award was made to the Court of the Subordinate Judge, Delhi and normally the parties would have to resort to that Court for interim relief in respect of the subject-matter of the dispute before the arbitrator. But so long as the jurisdiction of the Court of the Subordinate Judge, Delhi to entertain the application for extension of time was in dispute the Civil Court which is seized of the suit was entitled to make appropriate orders for preserving the property which is the subject-matter of the suitWe are therefore of the view that the Civil Court at Mandsaur was competent to appoint a receiver of the property until the question about the jurisdiction of the Delhi Court under s. 31 (4) to entertain applications arising out of the order of reference is finally determinedAfter the High Court of Delhi determines that question, receiver appointed, in order to comply with the requirements of the statute, may be made subject to the jurisdiction of the Delhi Court, if it be held that Delhi Court had jurisdiction to entertain the applicationWe cannot at this stage, decide whether the suit in so far as it relates to the assets of the partnership at Pipliya alone is maintainable. The arbitration proceedings undoubtedly relate to all the assets of the Partnership and if Preetam Singh, as contended by Pratap Singh, has remained in possession of the properties of the partnership at Bombay and Nagpur to the exclusion of Pratap Singh and it is just and equitable to have a receiver appointed, his remedy is to commence appropriate proceedings for that purpose and to apply to a competent court to appoint a receiver of the properties.