Bangalore District Court
K.A. Satish Kumar vs M/S. A.S.Krishnashetty & Sons on 20 August, 2016
THE COURT OF THE LII ADDL.CITY CIVIL & SESSIONS JUDGE:
AT BANGALORE CITY (CCH-53)
Dated this the 20th day of August, 2016
PRESENT: Smt.Yadav Vanamala Anandrao, B.Com., LL.B (Spl.,)
LII Addl. City Civil & Sessions Judge,
Bengaluru City.
A.C.No.25/1987
PETITIONER : K.A. Satish Kumar,
Residing at No.589, 10th 'C' Cross,
4th Main, West of Chord Road,
1st Stage,
Bangalore - 560 086.
(By M/s. PGS / KAS, Advocates)
-V/S-
RESPONDENTS :1. M/s. A.S.Krishnashetty & Sons
Company, represented by its
Partners.
(a) Since deceased by LRs of 1(a)
1. Smt. A.S.Annapoorna,
W/o. A.S.Narayana.
2. A.S. Prakash Kumar
3. A.S. Ramesh
4. A.S. Nagendra
5. A.S. Harish
LRs of 2 to 5 are sons of late
A.S. Narayana Shetty.
6. Smt. Sudhamani,
W/o. Srinath,
2 A.C.No.25/1987
C/o. B.M. Kodandarama Shetty
Jewellary, Old Extension,
Kolar.
7. Smt. A.S. Uma,
W/o. Amarnath,
C/o. Prasanna Kumar,
M/s. Dhothi Agencies,
Near Park, Gandhi Nagar,
Tumkur.
b. K. Ramachandra Shetty
c. K. Ananthalakshmana Shetty
e. K.A. Chandrakanth
Respondents 1(b, c & e) are
C/o. Rathna Talkies, Arasikere.
f. K.A. Sundaranath,
Shilpa Nursing Home,
No.316/B, 9th Main, 4th Block,
Jayanagar, Bangalore - 560 011.
g. K.A. Prabhakar,
M/s. Sri Vinayaka Syndicate,
No.185, N.T.Pet, Mysore Road,
Bangalore - 560 002.
h. A.N. Parthasarathy,
Residing at No.470, 19th Main,
4th 'T' Block, Jayanagar,
Bangalore - 560 011.
(By Sri. RKS, Advocate for LRs of R-1(b)
(LRs of respondents placed exparte)
ORDER
This is a petition filed under Section 8 of the Indian Arbitration Act, 1940, for appointment of Arbitrator for the resolution of the disputes between the parties. 3 A.C.No.25/1987
2. Brief facts of the case are that M/s.A.S.Krishna Shetty and Sons Company was a registered Partnership Firm. It has come into existence on 1.4.1977. The petitioner and the respondents (a) to (h) are the partners of the said firm. They are also members of the Hindu Un-divided family. A.S.Narayana Shetty is the kartha of the Hindu undivided Family. A branch of the firm was commenced in Bangalore. A.S.Narayana Shetty and other members of the family changed their attitude and they kept the petitioner in dark regarding the accounts, affairs and administration of the firm. Inspite of the requests and reminders made by the petitioner and other partners of the firm, including the Managing Partner, A.S.Narayana Shetty they failed to respond and A.S.Narayana Shetty sent letter to the petitioner in reply to the petitioner's letter dated 11.2.1985 intimating that the petitioner and his wife should go to Arasikere for verifying the accounts of the firm. In pursuance of the said letter, the petitioner went to Arasikere for verification of the account. But he was ill-treated and sent back without allowing him to very the accounts. In view of the blood relationship between the parties and the highest regards and respect which the petitioner had towards his elder brother - A.S.Narayana 4 A.C.No.25/1987 Shetty, who made the petitioner to simply obey his commands. In the interest of the harmony of the family, the petitioner ignored the ill-treatment and pursued his efforts to get the accounts and his share of profits. All his efforts went in vain. He has forced to issue notice on 1.3.1985 calling upon the partners to furnish the details as to the management of accounts. To the petitioner surprise of the petitioner, a reply was sent on 13.12.1985 stating for the first time therein that the firm of which the petitioner was one of the partner was dissolved in 1980 itself. In the Partnership Deed vide Clause 14 there is a provisions for resolving all the disputes by reference to the Arbitrators of each person is entitled to appoint his Arbitrator. Therefore, the petitioner got issued a notice through his advocate on 29.12.1986 requesting to refer the matter to an Arbitration. In reply to the said notice dated 29.12.1986 the respondents retorted their stand of the alleged dissolution of the firm. Therefore, the petitioner got issued another notice on 17.3.1987 and 22.3.1987 calling upon the partners to appoint Arbitrators and resolve the disputes. Since there was no response from the respondents, the petitioner has filed this petition for the appointment of the Arbitrator, as the respondents have 5 A.C.No.25/1987 forfeited their right to appoint Arbitrator in terms of Clause- 14 of the Partnership Deed.
3. After registering the case and issuance of notice, respondent Nos.1(a) to (h) have appeared and they have filed their objections and contended that any grounds are made out to grant the relief sought for by the petitioner and the petitioner is no way concerned to or connected with M/s.A.S.Krishnashetty and Sons Company. Therefore, appointment of Arbitrator does not arise. There is no Arbitration agreement between the parties. As such, question of appointing of Arbitrator does not arise. The petitioner has no connection whatsoever with the respondent firm. The petitioner and the respondents 1(a) to (h) are all children of late A.S.Krishna Shetty and were all formerly partners carrying on the business of running a theatre called "Rathna Talkies" in Arasikere. The partnership was constituted under a Deed of Partnership dated 28.4.1979. While the firm was carrying on the business the partners decided to change the constitution of the said firm and accordantly a Deed of Release was executed on 1.4.1980, under which the petitioner; was retired form the said firm and was released 6 A.C.No.25/1987 from the partnership with effect from 31.3.1980. Thereafter the petitioner is not concerned to the business of the firm. The respondents have also contended that there is no dispute between the parties. Moreover, the petition filed by the petitioner barred by time. All other allegations made out by the petitioner in the petition against the respondents such as they kept the petitioner in dark, they did not furnish the accounts of the firm etc., are all false. Accordingly, it is prayed to dismiss the petition.
4. Initially on 24.9.2001 this petition was allowed. But it was restored as per the order passed in Misc.No.1080/2001, dated 9.8.2006. After restoration the case was proceeded with. The petitioner deposed as PW.1 and relied upon the documents as Ex.P.1 to 35 and the respondent No.1 (c) deposed as RW.1 and the documents referred by the respondents are Ex.R.1 to 9.
5. After closure of arguments, heard the arguments of the learned counsels for the petitioner and the respondents. Perused the petition and objections thereto. 7 A.C.No.25/1987
6. Following are the points formulated for consideration of this court:
1. Whether the petitioner proves that the Arbitration Clause 14 under Partnership Deed provides for appointment of an Arbitrator to refer the alleged dispute, under Section 8 of Arbitration Act, 1940?
2. Whether the petitioner is entitled for appointment of Arbitrator, to resolve the dispute, as prayed for?
3. What Order?
7. My findings on the above points are as under:
Point No.1 .. In the Negative;
Point No.2 .. In the Negative;
Point No.3 .. As per final order for the
following:
R E A S O N S
8. Point Nos.1 & 2:- It is the petition filed by the
petitioner invoking Section 8 of Arbitration and Conciliation Act, 1940 for having aggrieved by the alleged strain relationship of his brothers and family members in connection with the partnership affairs as alleged, to deprive of his right and that, the respondents being partners of the firm and forming Joint Hindu Undivided family, in response to his written notice (calling upon them to resolve the dispute pertaining to the affairs of administration and accounts of the 8 A.C.No.25/1987 firm) they have taken the contention about dissolution of the firm and the arbitral clause cannot be enforced by the petitioner; He is not entitled to invoke the clause 14 of the partnership deed, so as to get the Arbitrator appointed for resolving the dispute as alleged.
9. The parties to Partnership Deed have set up their claim with reference to Arbitration clause 14 of the partnership deed and the parties specifically raised that there is existence of Arbitration agreement for appointment of Arbitrator as raised by petitioner; and the defendants stated as the firm has been dissolved the petitioner is no more remained as partner of the firm and , he has no right to invoke the clause 14 of the firm, and the petitioner is not entitled for the relief in this regard and as such, defended by respondents. Therefore, the petitioner has to prove the existence of Arbitration agreement that can be enforced under Section of the Arbitration Act, 1940. He has to establish that the firm was not dissolved and he was not a party to the alleged dissolution of partnership firm and hence is not a binding upon him and the right is still accrued to him to invoke clause-14 of the partnership deed, under Section 8 of the Act. 9 A.C.No.25/1987 On the other hand, the respondents have to substantiate that the firm was duly dissolved and there is participation of the petitioner in that process and he was released from the firm, and the firm stood dissolved and the right as claimed by the petitioner under clause 14 has been extinguished and he cannot invoke Section 8 of the Act. The petitioner has deposed as P.W.1 and placed reliance on the documents Ex.P.1 to P.35. On the other hand, respondent No.7(c) deposed as RW.1 and relied upon the documents Ex.R.1 to R.9
10. On perusal of the materials on record, i.e. the evidence of P.W.1, R.W.1 and the relevant documents it is revealed that the petitioner and respondent No.1 (a) to (h) are the sons of late A.S.Krishna Setty, who has 9 sons. They formed a Partnership Firm under a Deed of Partnership dated 1.4.1977, under the name and style as "M/s.A.S.Krishna Setty and Sons Company". It is on record that after the death of Anantha Nagaraja Setty, his son A.N.Parthasarathy was inducted into the Partnership and the firm was reconstituted as per Partnership deed dated 28.4.1979 i.e. at Ex.P.1, copy of the same. Petitioner's dispute is that he was not allowed 10 A.C.No.25/1987 in the management of firm and non-providing details of accounts and affairs of the firm.
11. The learned counsel for the petitioner referring the evidence of P.W.1 and documents placed on record has argued that, the first respondent is a registered firm and the certified copy of the partnership deed dated 28.4.1979 at Ex.P.1 is evidencing the same and that original of the same is with head office at Arasikere; On demand made by him for accounts to furnish the respondent 1(a) agreed to the same as per the letter Ex.P.2, and as failure to comply his request he has availed the support of Arbitral clause. Ex.P.3 is the legal notice for appointment of Arbitrator. The reply to the same at Ex.P.4 is the refusal for appointment of the Arbitrator as per the arbitral clause 14 of Ex.P.1. P.W.1 had continued the business of the firm at Bangalore, which was assessed to sales tax. He further referred the sale tax returns filed by P.W.1 before the sales tax authorities at Bangalore i.e. Ex.P.5 to P.9 and they are assessment orders in that regard. It is pertinent to note that Ex.P.5 to P.9 are dated 11.4.1986, for the period of assessment from 1.4.1980 to 31.3.1985 and they refer to business at Bangalore of P.W.1. He further 11 A.C.No.25/1987 stated that during 1979 Bank accounts at Bangalore was opened in the name of firm and respondents to furnish accounts from 1980 onwards. During his cross-examination the documents produced by the plaintiff are referred by the learned counsel for the contesting respondents i.e. Ex.P.10 to P.24 the carbon copies of the alleged statements sent to supply department. But they do not disclose the petitioner as partner of the firm. It is also admitted by P.W.1. They are of the year 1981 and 1982, showing address of plaintiffs business at Bangalore, but not as partnership firm (respondent No.1) It is specific case and suggested to P.W.1 during cross-examination that P.W.1 was no more remained as partner of the firm from 31.3.1980 and he was running separate business in his individual capacity. Ex.P.25 being of the year 1980, dated 31.3.1980 P.W.1 signed it stating as partner and it was written by him only. Ex.P.11 to P.24 do not contain as partner of the firm. Ex.P.26 and P.27 are KST certificates. Ex.P.28 to P.30 document issued by sales Tax department. Ex.P.31 and P.32 the enrolment certificate and Ex.P.33 and P.34 are the notices issued by professional Tax Officer. Ex.P.35 is the endorsement.
12 A.C.No.25/1987
12. P.W.1 denied the suggestion that he had retired from partnership and running his independent business at Bangalore and partnership firm was dissolved. He stated that the business at Bangalore was stopped since 1982-83. However, he did not dispute the fact that he had withdraw the huge amount from the bank account at Bangalore and it may be of Rs.1,42,000/- and odd from the account at Syndicate Bank at Bangalore. He says it was utilized for business purpose. But he failed to produce any material documents pertaining to the business at Bangalore from 1980-81 onwards up to 1982-83, as of the respondent No.1 firm and alleged stopping of business and to show that he was running it as partner of respondent No.1 firm. The same is material suppression. It is hard to believe that the respondent No.1 firm was continued and existence after 1980. His contention that dissolution of firm is not binding upon him itself is supported the defence of respondents that respondent No.1 was dissolved.
13. RW.1 reiterating the defence has relied upon the documents that Ex.R.1 to R.9, which are considered hereinafter.
13 A.C.No.25/1987
14. The specific defence reiterated by the respondents (RW.1) is that, in the year 1980, the petitioner resigned from the Partnership Firm and that the respondents being the partners of the said Partnership decided to change the constitution of the firm and accordingly a Deed of Release (Ex.R.8) was executed on 1.4.1980; under which it was considered that the petitioner retired from the Firm and he was released from the Partnership with effect from the close of business on 31.3.1980; RW.1 has deposed that it was duly notified to the Registrar of Firms. However Ex.R.8 has been disputed. The Firm was reconstituted by Deed of Partnership (Ex.R.5) dated 1.4.1980, (Ex.R.4 was acknowledgment of by the Registrar of Firms consisting of the partners i.e. A.S.Narayana Setty, K.Ramachandra Setty, K.Ananthalakshmana Setty, K.A.Chandrakanth, K.A.Manohar, K.A.Surendranath, K.A.Prabhakar and A.N.Parthasarathy and thereby eight have continued as its partners. RW.1 stated that the petitioner has received the due consideration after his retirement, and after settlement of all his accounts, as on 31.3.1980; Hence, the petitioner has nothing to do with the Firm. The Firm again reconstituted thereafter with effect form 1.4.1981, under 14 A.C.No.25/1987 another Partnership deed (Ex.R.6) dated 1.4.1981 and was renamed as 'Ratna Talkies' (A.S.Krishna Setty Sons and Co.,) Referring the document at R.5 and R.6, thereby it is specifically contended that the petitioner is in no way connected with the firm after his release i.e. from the date 31.3.1980. The Registrar of Firms has also issued an acknowledgment of Registration of Firm registering it under No.29/1982, as per Ex.R.7. Ex.R.1 to R.3 are the Assessemnt orders issued by Income Tax department for the year 1981- 82, 1983-84 and address of the Firm shown as M/s.A.S.Krishna Setty & Sons Co., Cinema Road, Arasikere (Ex.R.1) and M/s.Ratna Talkies etc., (Ex.R.2 and R.3) and not stated of partnership at Bangalore, either as branch or sister concern.
15. It is further deposed by RW.1 that "the petitioner was given his share in the family properties including his share in M/s.A.S.Krishna Setty Sons and Company and he separated from the family and also retired from the firm; It is also referred the documents by the respondents i.e. the Release deed dated 1.4.1980; The written document executed by the petitioner is at Ex.R.9; and deposed that, he has 15 A.C.No.25/1987 acknowledged the receipt of his share in the joint family properties towards his separation and that the said document was written by the petitioner by his own handwriting and it bears his signature. Petitioner had admitted the same and his signatures in Ex.R.9, it was in O.S.No.52/1995 during the evidence on 4.11.2000 as Ex.D.4(a), to (c). The learned counsel for the respondent argued that the petitioner has instituted a multitude of proceedings against the respondents seeking the same relief and that the petitioner has suppressed the real state of affairs regarding the proceedings even though he is duty bound to bring to the court's notice the details regarding the same; The petitioner is guilty of abusing the process of the court and the entire judicial system and ought to be put on strict terms. Root of this case touches the legal aspects.
It is outside the scope of this court in this case as the petition invoking Section 8 of the Act is not maintainable.
3 classes of cases that we find in the Arbitration Act 1940 and those are:
1. Arbitration without the intervention of court;
2. Arbitration with the intervention of court where no suits are pending; and
3. Arbitration in pending suits.
Section 8 of the Act 1940 provides for appointment of Arbitrator and it reads thus:
16 A.C.No.25/1987
Power of Court to appoint Arbitrator or umpire:-
(1) In any of the following cases,-
a) Where an Arbitration agreement provides that the reference shall be to one or more Arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or
b) ...................
c) ..................
2) "If the appointment is not made within fifteen
clear days after the service of the said notice, the court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an Arbitrator or Arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties".
In the decision (AIR 1957 J & K 27) it is duly considered the requirements that while such appointment court shall consider that there must be a valid Arbitration agreement; and there must be provision in the arbitration agreement for appointment of Arbitrator by consent of the parties etc. and if not fulfilled Section 8 cannot be invoked. Thus Section 8 of the Act emphasizes "the consent of the parties" to the Arbitration agreement for appointment of Arbitrator and if one of such party to the Arbitration agreement refuses to give consent then other have right to avail Section 8 of the Act, 17 A.C.No.25/1987 1940. Now coming Clause 14 of Ex.P.1 (An arbitration Clause) in the present case, it reads thus:
"If there were to be any disputes, between the parties which cannot be resolved by themselves the same shall be referred to an Arbitration of nine Arbitrators, each party being entitled to nominate one Arbitrator. The decision of the majority of the Arbitrators shall be binding on all the partners.
Thus, the very stipulation in the partnership Deed at Cl.No.14 (Arbitration Clause), it has made clear that it is the choice of each of the nine partners to nominate their own Arbitrators and decision of majority of arbitrators on the dispute, shall be binding on all the partners. Therefore, coming to the significance of Section 8 of the Act. Section 8 is pertaining to appointment of Arbitrator that, where an Arbitration agreement provides that reference of dispute to one or more Arbitrators, to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; Thus it refers to "appointment of Arbitrator by consent" and if there is no reply/response, from the other side, on issuance of notice the said Section can be invoked under Arbitration Clause.
But in the present case, under the Partnership Deed Ex.P.1 right has been given to the parties enabling them to nominate one Arbitrator of their own choice and that the decision of 18 A.C.No.25/1987 majority of Arbitrator held to be binding on the partners.
Thus, clause No.14 of Ex.P.1 does not give any right to any of the partners, much less the petitioner to invoke Section 8 of Arbitration Act 1940, as it is not an appointment of Arbitrator or Arbitrators by consent of the partners of the firm, as parties to the Arbitration Agreement. Therefore, it is relevant to refer the decision which is applicable to the present case on hand, the decision reported in AIR 1961 Patna 128. With due respect to the decision, it is considered the legal aspect and consequences which are applicable to the present case on hand and they are relevant. The case involved in the said decision was also for appointment of Arbitrator under Section 8, sought for one of the three partners of the Firm. The Arbitration clause/agreement provided that each of the three partners to appoint their respective Arbitrator; of their choice and that one of the partner failed to appoint his Arbitrator of his choice and under such circumstances it has been held in the said decision as follows: (The relevant paras are reproduced) "Section 9, provides for a contingency where the Arbitration agreement provides that the reference shall be to two Arbitrators, one to be appointed by each party. It has not provided for the contingency of three Arbitrators, one to be appointed by each party. In my opinion, therefore, in terms, the section does not apply and the meaning of Section 9 cannot be extended, on principle, to a contingency which has not been 19 A.C.No.25/1987 specifically provided therein, especially if the provisions of clause (b) of that section are kept in view.
Each party had its own right to appoint its own nominee as on Arbitrator, irrespective of the consent of the other side, and, therefore, in my opinion, the learned subordinate Judge ahs rightly held that Section 8 is not applicable to the facts of the instant case. Section 10 also is not applicable, as there the contingency provided is that where the Arbitration agreement provides that the reference shall be to three Arbitrators, one to be appointed by each party and third by the two appointed Arbitrators. There is no such case here. An agreement of the instant kind is uncommon and unusual, where each party has been given a separate right to appoint its own Arbitrator, and perhaps that may be the reason why the legislature did not provide for such a contingency.
But, if none of these sections, namely, 8, 9 and 10 has empowered the court to direct the party which does not carry out the terms of the agreement to appoint its Arbitrator and odes not empower the court to give its own direction for the failure of the party to appoint one, in may opinion, it has got to be that the parties which are ready to carry out the terms of the agreement are helpless in the matter, and they have no other remedy but to go out to a court of law for the redress of their grievances, if any, according to the ordinary mode of instating a suit or other proceedings, but they cannot get any relief under the Arbitration clause, like the one provided in their partnership deed".
It is also relevant to refer another decision submitted by the learned counsel for the respondent reported in AIR 1958 Cal. 620, which reads thus:
C) "Arbitration Act (1940) S.8- Applicability. Where the Arbitration clause provided that the Arbitration shall be by two Arbitrators one to be nominated by the buyer and the other by the seller, and there was no question of one or ore Arbitrators being appointed by the consent of all the parties.20 A.C.No.25/1987
Held that the section could have no application to the case and hence the failure of a party to appoint his nominee and called upon the other to do so, to move the court under sub.s.2) when the other did not nominate his Arbitrator was of no significance.
16. In the present case right to appoint their respective nine partners has been given under the Partnership Deed itself and it is not by consent of all the partners to appoint by consent. Petitioner himself has not complied with by appointing his own Arbitrator. There was no response from the respondents (other partners) to appoint their chosen Arbitrator,but they challenged the very status of the petitioner of being partner of the firm on the ground of retirement and his release and that the very partnership firm itself is no more in existence. Thus, it is amounting to refusal to appoint the Arbitrators of their choice. When such being the case, the petitioner cannot invoke either Section 8 or 9 or 10 of the Act, 1940. The learned counsel for the respondents has relied upon the decision and argued that if the present Arbitration case is not tenable then this court cannot go into matter on merits of the case and the decision is rendered in suit No.2747/1994 (MANU/DE/0985/2000), in the case of Sarvendra Kumar Singh Eng., & Contractors Vs Chairman & 21 A.C.No.25/1987 Managing Dir., N.T.P.C., wherein it is observed that "since this court lacks on second contention of the respondent, i.e. merits of the case and dispute raised are not referable to Arbitration and it would open to the parties to submit before the court of competent jurisdiction". So petition is not maintainable, as the petitioner cannot invoke Section 8 of the Act.
17. Meeting out the case of the petitioner and supporting his arguments, the learned counsel for the contesting respondents has further submitted that the respondents have brought certain events and circumstances supporting the respondent's case to defeat the petitioner about his status, and that he has no legal right to invoke the Arbitration clause and even he is not entitled for the appointment of Arbitrator under Section 8 of the Act and he is a retired partner and that firm is not in existence, and they are discussed hereinafter. No doubt, petition is not maintainable invoking Section 8 of the Arbitration Act, 1940. But plaintiff's claim available, if he is legally entitled to the reliefs, is only in a suit before the Civil Court.
18. Stating one of the instances, the learned counsel for the respondent has argued that the petitioner filed the case in 22 A.C.No.25/1987 CAN/89/84-85/CAN 292/85-86/6-10-1986 before the District Magistrate, Hassan on 7.11.1985 requesting the District Magistrate not to renew licence and also to cancel the cinematograph license in respect of M/s Ratna Talkies, Arsikere on the ground that the Firm has violated the terms of the licence. The matter was contested and it was dismissed by the learned Deputy Commissioner by his order dated 6.10.1986, and it is observed that:-
"The petitioner filed the said case knowing fully well that he was no more a partner of the firm from the close of business on 31.3.1980. Thereafter, he initiated the instant petition under the Arbitration Act, 1940 for the appointment of Arbitrators to resolve the alleged disputes between the parties pertaining to affairs, administration and accounts of M/s.A.S.Krishna Setty and Sons Co. Merely because vide the said order the Deputy Commissioner observed in passing that the relief sought by the petitioner is correct and has to be sought before a proper forum, it does not follow automatically that the petitioner is entitled to the relief sought for in the instant case even though it is time barred". It is true that the learned D.C. was holding said quasi judicial proceedings but he cannot decide the civil rights of the parties to the suit. So, parties to approach proper judicial forum. The observation made in the said dismissal 23 A.C.No.25/1987 order does not give any right to the plaintiff/petitioner to invoke Section 8 of the Act.
It is evident on record as parties to the alleged Arbitration clause under Partnership Deed have admitted the fact and it is that, during the pendency the instant case, the petitioner filed O.S.No.4799/1994 before the City Civil Court, Bangalore for dissolution of partnership and for rendition of accounts. The said case is still pending. The reliefs claimed through the said suit and the one claimed in this A.C.25/1987 are similar in nature, i.e. based on the partnership deed Ex.P.1. However, in view of the above discussion and conclusion thereupon, on maintainability of this Arbitration suit it is evident that, the petitioner has ample scope under law to proceed in that suit, claiming available relief under law with due procedure. This court cannot go into the matter to decide.
19. The petitioner filed O.S.No.52/1995 for partition and separate possession of his alleged 11/100th share in the suit schedule 'A' & 'B' properties and for an enquiry as to the mesne profits it is notable point that, the learned Civil Judge, Arsikere, while dismissing the said suit dated 18.4.2001, 24 A.C.No.25/1987 specifically referred to the partition deed dated 31.3.1981 and the hand written document (Ex.P.9) of the petitioner. It is evidencing the receipt of money, towards his share in the joint family properties. Referring the learned counsel for the respondent specifically argued that, "the learned Civil Judge also accepted that the petitioner had retired from the Firm with effect from 31.3.1980; The partition deed was relied on and looked into for collateral purposes and the Trial Court came to the conclusion that the properties of the joint family had been equitably divided between all the members and that the erstwhile petitioner had received his due share and that no injustice had occurred to him; Being aggrieved by the judgment and decree passed by the Civil Judge, Arsikere dated 18.4.2001, the petitioner filed an appeal before the Hon'ble High Court of Karnataka in R.F.A.No.525/2001;. The Hon'ble High Court of Karnataka dismissed the said appeal holding that judgment and decree passed by the Trial Court was in consonance with the pleadings and the material evidence adduced and that the same did not warrant any interference from the Hon'ble High Court of Karnataka; Being aggrieved by the said order the petitioner challenged the same by way of Special Leave before the Hon'ble Supreme Court of India in S.L.P.(Civil) No.4485/2011 and the same came to be dismissed as per order dated 13.5.2011". From these facts placed on record through documentary evidence it is clear that the order passed in 25 A.C.No.25/1987 O.S.52/95 (and RFA 525/01) SLP (Civil) 4485/11) has reached its finality. If any grievance partnership firm under Ex.P.1 he has invoked the jurisdiction of civil court in O.S.4799/94. So, he cannot seek intervention of this court under Section 8 of the Arbitration of the Act.
20. It is not in dispute about the suit at Arasikere on 13.9.2012 respondent Nos.1(d), son of respondent No.1(b) and son of respondent No.1(c) have filed O.S.No.375/2012 on the file of Principal Civil Judge and JMFC at Arsikere, praying for an injunction restraining the petitioner from presenting the alleged promissory note/hundi dated 26.6.2012, alleging that it was executed in his favour for encashment. The learned counsel for the respondents argued that, "a temporary injunction has been granted restraining the petitioner from presenting the alleged hundi for encashment and the same is operating against the petitioner till date, which is still pending; Despite the said injunction order operating against the petitioner which was well within his knowledge, the petitioner proceeded to file C.M.PO.No.92/2013 and C.M.P.No.157/2014 claiming that Rs.25 lakhs was due to him and that on presentation of the same the said amounts were not released to him by the bank". This litigation is one of the instance that, the petitioner 26 A.C.No.25/1987 was made known about his discontinuance of, from being partner of the Firm.
21. Referring another circumstances the learned counsel for the for the respondent has argued that, "respondent Nos.1(d), son of respondent No.1(b) and son of respondent No.1(c) filed the above case against the petitioner under Section 200 of Cr.P.C. 1973 accusing him of offences under Sections 467, 468, 504 and 506 I.P.C. on the file of the Senior Civil Judge and JMFC at Arsikere, on the grounds that the petitioner has forged and fabricated the alleged hundi/promissory note dated 26.6.2012. By order dated 11.2.2014, the Senior JMFC while taking cognizance of the offence alleged against the petitioner under Sections 467 and 468 of I.P.C., has observed that a prima-facie case was made out to register a complaint against the accused i.e. petitioner for the offences punishable under Sections 467 and 468 of I.P.C. Therefore, the Senior Civil Judge and JMFC ordered that a criminal case be registered against the accused for the offences punishable under Sections 467 and 468 of I.P.C." This incident refers to the dispute amongst the brothers and their family members. However, the plaintiff can claim suitable relief before proper jurisdictional court.
22. Another instance as argued by the learned counsel for the respondents is that, "the petitioner filed Crl.P.No.4669/2014 under Section 482 Cr.P.C. before the Hon'ble High Court of Karnataka to 27 A.C.No.25/1987 quash the proceedings in C.C.No.48/2014 on the file the Senior Civil Judge and JMFC, Arsikere; Though initially the criminal case proceedings were stayed for a period of two weeks, that stay order has expired by efflux of time and is no longer in operation; The said petition is still pending on the file of the Hon'ble High Court of Karnataka; In the instant case the petitioner has suppressed the fact that 'B' report submitted by the police was rejected and that the learned Senior civil Judge while taking cognizance of the offence has ordered that a criminal case be registered against the petitioner".
23. He has further argued that "CMP No.92/2013 was filed by the petitioner before the Hon'ble High Court of Karnataka against the same respondents herein and their respective legal heirs, for the appointment of an Arbitrator claiming under the partnership deed dated 28.4.1979. While passing orders, it was recorded that when the said mater was called out there as no representation from the petitioner, even thought the matter was called out twice. In the said petition, the petitioner claimed that under the partnership deed dated 28.4.1979, being one of the partners, an amount of Rs.25 lakhs was due to him under an alleged promissory note/hundi allegedly executed by late Sri K.Anantha Lakshmana Setty in favour of the petitioner, the Hon'ble High Court of Karnataka, dismissed the said petitioner vide order dated 20.8.2013 and observed that the petitioner having instituted O.S.No.4799/1994 had waived his right to Arbitration in light of Section 8 of the Arbitration 28 A.C.No.25/1987 & Conciliation Act, 1996. The order dated 20.8.2013 has attained finality". This court has no jurisdiction to go into the matter for adjudication, as petition is not maintainable under Section 8 of the Act.
24. The learned counsel for the for the respondent has submitted his further arguments that "on 21.2.2013 the petitioner herein filed an application under Section 9 of Arbitration & Conciliation Act, 1996, to restrain the Respondents therein alienating, encumbering etc. the schedule property till the alleged disputes are resolved, for the appointment of a receiver, to restrain the respondents from inducing any third party purchasers on schedule property and for other reliefs. No interim order has been passed in this matter. This case is still pending on the file of the Addl. City Civil Judge, at Bangalore".
It does not sustain in view of invoking Section 8 of the Arbitration and Conciliation Act 1940 by the petitioner in this case A.C.No.25/1987.
25. The respondents' counsel placed reliance on another event that, "the petitioner filed this petition before the Hon'ble High Court of Karnataka against the same parties as in CMP No.93/2013, claiming the same relief and in respect of the same subject matter as under that petition. The 29 A.C.No.25/1987 Hon'ble High Court of Karnataka while dismissing the said petition on 17.4.2015 observed that the petitioner had already approached the court seeking appointment of an Arbitrator to adjudicate the disputes between the parties rising out of the partnership deed dated 28.4.1979, in CMP No.92/2013 and that the same came to be dismissed on grounds of maintainability, as the petitioner had already filed a suit for rendition of accounts and for dissolving of the firm" Which is also applicable to the present case on hand.
26. The learned counsel for the respondents has further argued that "during the pendency or after that disposal of some of the aforementioned proceedings the petitioner has filed the instant petition for the appointment of an Arbitrator and that these proceedings are wholly frivolous and a gross abuse of the processes of this Hon'ble Court, apart from being a total misuse of the judicial process and machinery, by the petitioner, the petitioner ceased to be a partner with the firm after 31.3.1980; and that in light of the petitioner's retirement from the Firm, he having received his share in the Firm's business and the joint family properties, dismissal of O.S.No.52/1995, R.F.A.Nl.52/2001 and S.L.P. (Civil) No.4485/2011 etc. there is no arbitrable dispute exists for reference to Arbitration. The question of appointing Arbitrators under the partnership deed dated 28.4.1979 does not arise as that firm is no longer in existence and has been dissolved more than 8 years prior to the institution of the instant case.
30 A.C.No.25/1987
27. With regard to legal aspect he further argued that "in proceedings under Sections 8 and 9 of the Arbitration Act, 1940 the party coming to the court has to prove the existence of an Arbitration agreement and also that there are certain disputes which have arisen between the parties in the matter of appointment of Arbitrators, and that one of the parties has not so appointed the Arbitrator, it is only then that the aggrieved party can approach the court seeking to appoint an Arbitrator; In the instant case there is no Arbitrator agreement at all between the parties; Petitioner has no connection whatsoever with the respondent firm at all; Assuming without conceding that there were differences, even under the partnership deed dated 28.4.1979, having regard to the Arbitration clause contained in the said deed dated 28.4.1979 also, only despite which could not be resolved would have to be referred to Arbitrator Arbitration of nine Arbitrators, each party being entitled to nominate one Arbitrator each and the decision of the majority of Arbitrators is binding upon all the parties; The said Deed of Partnership has long since been dissolved w.e.f. 31.3.1980, nearly eight years ago by releasing the petitioner from the said Firm; Therefore, there is no dispute with regard to the said deed that could be resolved by Arbitration, and alleged disputes which the petitioner claims have arisen are not arbitrable at all having regard to the terms and conditions of the deed dated 28.4.1979".
Which is acceptable, that there existed no arbitrable agreement to be invoked under Section 8 of the Act. 31 A.C.No.25/1987
28. The learned counsel for the respondent further submitted that "late Sri A.S.Krishna Setty during his lifetime acquired several moveable and immoveable properties through his flourishing business i.e. A.S.Krishna Setty Sons & Company; All the joint family properties were self- acquired properties of late Sri A.S.Krishna Setty; and that, no capital was bought in by selling the gifts of the partners or by borrowing funds from them; In fact, there was no contributions made by any of the partners; All capital was brought in by late Sri A.S.Krishna Setty from his own earnings and all the moveable and immovable properties were his self-acquired properties; Further investments made in the business were out of the profits of the firm/business; It was Sri A.S.Krishna Setty for the benefit of his children who formed the Firm and inducted all his children as his partners in the Firm; The principle place of the firm's business was at Arsikere as late Sri Krishna Setty was carrying on his business there; Even after his demise the principal place of the firm's business has continued to be in Arsikere; The Bangalore branch of the office was opened to with a view and understanding to expand the business of the firm and for that reason late Sri Anantha Nagaraja Setty settled in Bangalore and the petitioner was moved to the Bangalore branch of the firm in order from him to assist late Sri Anantha Nagaraja Setty; Late Sri Anantha Nagaraj Setty was completely well at the time and was managing the Bangalore branch of the firm to the best of his abilities; There was no pressing need for the petitioner to come to 32 A.C.No.25/1987 Bangalore to take over the firm's business as stated by the petitioner. From its inception the firm always functioned as a joint family business; The petitioner did not have any other source of income other than from the joint family business; After his retirement and release from the firm since 31.3.1980 the petitioner had nothing to do with the business of the firm; Thus, the petitioner's contention that the joint family properties and the partnership firm are independent of each other and that the joint family properties and profits have never been invested/used in the firms are untenable". No doubt these are evident from the record placed in this case, but the learned counsel for the plaintiff submitted that since the alleged dissolution of Partnership is false one and not binding upon him. This aspect has been asserted by the plaintiff impliedly in his another suit, O.S.No.4799/1994; if not it can be claimed for, in that suit. But the very Section 8 of the Act prohibits this court to discuss the merits.
29. It is also one of the notable point about the changing version of petitioner that he has deposed during his examination-in-chief on 16.10.1990, which reads thus:
"The 1st respondent has a branch of its business at Bangalore and I am managing the branch. The respondents are not giving accounts since the year 1980 of the First Respondent's business. I demanded the respondents to furnish the accounts several times. The respondents failed to furnish the accounts.... I am 33 A.C.No.25/1987 still continuing the business of First Defendant at Bangalore"..
But the undisputed judicial proceedings is supporting the respondents that, The Civil Judge, Arsikere, while dismissing O.S.No.52/1995 observed that, "the petitioner herein is separately operating his business at Bangalore and he is separately residing in Bangalore"..
30. The learned counsel for the respondents has further argued that, "moreover, regard being had to the Release Deed dated 1.4.1980 and the hand written document executed by the petitioner as the learned Civil Judge noted in the judgment". It is therefore relevant to reproduce the observation and appreciation of evidence in that suit and now plaintiff cannot deviate from his such admission. The relevant portion reads thus:-
"the plaintiff himself admitted that Ex.D.4 was written in his own hand-writing and the same bears his signature at Ex.D.4(a) to D.4(c), but he denied the contents. He being an educated person, having very well English knowledge, and he has beautifully written e.D.4 in English and he is now denying its contents only with an intention to show that the partition had not taken place. He himself got marked the certified copy of Ex.D.4 as Ex.P.16 and by perusing Ex.D.4 and P.16, it is seen that the entire family properties were valued at Rs.49,22,779.99 and total amount received by the plaintiff is Rs.5,02,614.47 only and balance payable to plaintiff is Rs.44,360.97. It is written that the balance is payable within 2 or 3 days by cash or credit....the 34 A.C.No.25/1987 last page of Ex.D.4 (handwritten document Ex.R.9 herein) clearly indicates that there is no dues from either side and this has been confirmed by us ...... when there are clear documents to show that the plaintiff has taken his share by means of cash and already the partition has taken place in the joint family as per the partition deed (ex.D.3 therein) there is no question of decreeing the suit of the plaintiff for partition and separate possession of his share..... it is not known why the plaintiff is unnecessarily litigating before various courts and unnecessarily causing trouble to the defendants though he has already taken his share by means of sufficient cash...."
The above said findings have been re-affirmed by the Hon'ble High Court of Karnataka in R.F.A 525/2001 and it is held that:
"Ex.D.4 has been written in the handwriting of the plaintiff himself. By the said document he has evidenced the receipt of cash in his favour; The other immovable property that he has received is a house in Bangalore; Therefore Ex.D.4 is a document which has been acted upon by the plaintiff himself in pursuance to the partition effected by virtue of Ex.D.3....... in pursuance of Ex.D.3 and Ex.D.4, all the properties of the family have stood divided between the plaintiff and defendants. As a consequence whereof, the plaintiff has received his share in terms of cash as well as the house property in Bangalore ..... Exhibits D.13 and D.14 (i.e. Ex.R.1 herein) are the acknowledgments of the Wealth Tax Officer and the Income - Tax Officer.... There is no objections by the plaintiff to the consequential charges made in terms of exhibits D.13 and D.14 even though they were made in the year 1983-84. Hence the acceptance of the change of status of the family members would imply the acceptance of the plaintiff. The change of status and the ownership of the properties have since been altered by the concerned authorities on the basis of the application made by the members of the family. The plaintiff has filed to shake the said evidence on record. Therefore, the evidence pertaining to exhibits D.13 and D.14 require to be accepted..... It is relevant to note that neither the hand 35 A.C.No.25/1987 writing nor the signature of the plaintiff at Ex.D.4 is denied by him.... In view of the express desire of the plaintiff to shift his business Bangalore and in view of the existence of the said house at Bangalore, it probabilities the intention of the parties to give the house at Bangalore to the plaintiff has accepted. Ex.D.4 (Ex.R.9) is not just a list of properties which the plaintiff has accepted. Ex.D.4 is an acknowledging document which is clearly written by the plaintiff himself. There has been a reference to the division of the wealth, shares, properties moveable and immovable, with reference to the plaintiff as well as other defendants and from certain banks. The said amounts have also been qualified..... Therefore, it is evident that Ex.D.4 evidencing the receipt of the share of the plaintiff is in lieu of the division made in receipt of the partition deed ......
It is specifically pressed upon by the learned counsel for the respondent that the above said findings have been confirmed by the Hon'ble Supreme Court of India S.L.P. (Civil) No.4485.2011, which is acceptable.
31. The learned counsel for the respondent referring said judicial proceedings has further argued that, "in view of the foregoing it is clear that the petitioner having been released form the firm as on 31.3.1980 and the firm having been reconstituted thereafter and the petitioner having executed Ex.R.9 as document executed in his handwriting evidencing the amounts of the joint family properties which fell to his share cannot now be allowed to resile from the same. Regard being had to the findings in O.S.No.52/1995 R.F.A.No.525/2001 and S.L.P.(Civil) No.4485/2011 it is without doubt that the petitioner had nothing to do with 36 A.C.No.25/1987 the firm from 31.3.1980, and that the Bangalore branch of the Firm to do with the Firm from 31.3.1980; and that the Bangalore branch of the Firm was left to the exclusive control of the petitioner consequent to his release from the Firm. The plaintiff having received his due share in the joint family properties and having retired from the Firm, no longer bears any right in the joint family properties or in Firm and the same has attained finality in view of the judgments passed in O.S.No.52/1995, R.F.ANo.52/2001 and S.L.P. (Civil) No.4485/2011 as stated above. Thus, no arbitrable disputes arise out of or in connection with the Firm under the partnership deed dated 28.4.1979". And also referred the evidence of P.W.1/petitioner during his cross-examination on 7.12.1990, 20.3.1991 and 23.6.1994 has made the following admissions:-
" I do not remember as to in which year the firm A Krishna Setty and sons was commenced. The firm was reconstituted in April 1979 28th April, after the death of K.Anantha Nagaraj Setty- the Managing partner prior to 28th April, 1979 the firm was in existence. Before the firm reconstituted, I do not know whether the accounts of the firm was settled as on the date of reconstitution, in the reconstituted firm I have 1/9th share but I do not remover my actual voluntary contribution. I do not remember exactly when the Bangalore Branch was commenced. At the time of reconstitution in the year 1979. The Bangalore branch and I was managing the Bangalore branch and I was managing affairs of Bangalore branch after inspections from the Head office. Even prior to reconstitution the Bangalore Branch was constituted and before 1979 myself and my brother were both attending affairs of Bangalore branch, my brother - K.Anantha Nagaraja Setty and myself were jointly looking after the affairs of Bangalore branch. My brother Ananth Nagaraju Setty died on 37 A.C.No.25/1987 27.4.1979. After the death of Nagaraj Setty I was alone managing the Bangalore branch at the inspections from the Head Office. Eve now the Bangalore branch is functioning............."
32. No doubt it is true that, the petitioner's evidence on many important aspects of the case has remained uncorroborated by documentary or other cogent material and that the evidence given by the petitioner falls short of proving his case. It is also clear from this evidence that he has failed to prove that he is associated with the firm. But his release on 31.3.1980 is seriously disputed which is subject matter of the suit filed by him for dissolution of firm. He has to establish that the Bangalore branch of the erstwhile firm is still functioning as part of the firm as it existed in 1979 in that suit. The defence that "the petitioner retired and was released from the firm as long back as 31.3.1980 and has ever since never been a part of the partnership; The said firm was reconstituted on 1.4.1980 after the petitioner retired on 31.3.1980, He also received his due share in the joint family properties when he relinquished his rights in the said partnership" are also the subject matter of the said suit;
33. The learned counsel for the respondents' further submitted that, 38 A.C.No.25/1987 "the petitioner has no connection whatsoever with the affairs of the partnership under the 1979 deed or the reconstituted firm thereafter. "There is no bank account in respect of Bangalore branch presently. On 28.4.1979 there was the bank account of Bangalore branch in Syndicate Bank, Grain Merchants co-operative Bank, Bangalore branch by was managed by all pertness prior to 1979 and even after reconstitution also. I do not remember when the bank account of Bangalore branch was closed... I have stock statements as per Ex.P.5 I have sent the copy of stock statements to HO... I have sent the stock statement to HO ever after 1980 April and I do not have documents to establish that fact. There was no stock during the period stated in Ex.P.7 and no business was done... I have opened account in Syndicate Bank in the year 1979 in respect of the business. I have also opened account in Grain Merchants Co-Operative Bank a/c, in respect of the Branch Bangalore. Myself and other partners are operating the accounts at bank branch at Bangalore..."
And that "the Petitioner has failed to establish that the Bangalore Branch which was allotted to him as his share in the joint family properties upon his release from the erstwhile firm under the Partnership Deed dated 28.4.1979 is still operating as a branch of the reconstituted firm under the Partnership Deed dated 1.4.1980. The petitioner has admitted that he has no documents to prove that he has submitted accounts to the Head Office of the firm even dafter the firm was reconstituted in 1980. The petitioner was released from the Firm as long back as 31.3.1980 and has ever since never been a part of the Partnership, thus he does not possess the records pertaining to the business of the firm after his release". However these are to be agitated in the said suit, as this court cannot go into these aspects touching the merits of the case. 39 A.C.No.25/1987
34. No doubt it is true about the materials on record duly indicate as argued by the learned counsel for the respondent that "no evidence is on record pertaining to the Bangalore branch i.e. balance sheets, bank statements, stock inventory etc., Exhibits P.5 to P.9 are the assessment orders for the years from 1.4.1980 to 31.3.1985 i.e. after his release from the firm for a period of five years thereafter. The assessment for all the five years have been done on the same day i.e. 11.4.1986. In order to get the said assessments done the petitioner has appeared before the Sales Tax Officer posing to be the Partner of the firm despite having been released and knowing fully well that he cannot act in the capacity of a partner of the firm (after his release on 31.3.1980). The said exhibits cannot be relied upon as the petitioner has set up these documents even after knowing fully well that he is no more a partner of the firm and has nothing to do with the firm after 31.3.1980. In order to obtain these assessment orders the petitioner gotten the assessment done for the Bangalore branch even though he was in no way connected to the firm. For the purpose of obtaining these assessment orders petitioner has produced day book, ledger, invoice bills etc., as evidenced in Ex.P.5 to P.9. Whereas in his evidence he has admitted that he does not have these documents and that the said documents have been handed over to the Head Office. It is inconceivable as to how the petitioner got these said assessment orders done if he was not in possession of the said documents. Thus, the 40 A.C.No.25/1987 petitioner's evidence in this regard is inconsistent and cannot be looked into. This also goes to prove that after 31.3.1980 the petitioner has carried on business in Bangalore in his individual capacity and is in no way connected to the firm and the petitioner by setting Ex.P.5 to P.9 is trying to mislead this Hon'ble Court into believing that he was connected to the firm despite his release on 31.3.1980. The said Firm written statement reconstituted on 1.4.1980 after the petitioner retired on 31.3.1980. He also received his due share in the joint family properties when he relinquished his rights in the said partnership. Thus, the petitioner has no connection whatsoever with the affairs of the partnership under the 1979 deed or the reconstituted firm thereafter. All claims made in respect of partnership under the 1979 deed or the reconstituted firm by the petitioner are baseless and unsustainable".
"... All the partners are entitled to operate bank account namely Ananthalakshmaiah Setty, Narayana Setty and Sathish Kumar and others were entitled to operate bank accounts, individually at Bangalore.... I have withdrawn the heavy amounts from the banks accounts at Bangalore. The amount withdrawn was more than Rs.1,00,000/-. May be that, I had withdrawn Rs.1,42,000/- and odd at Syndicate Bank at Bangalore. The Heavy amounts withdrawn is utilized for the business purposes. I cannot tell the profits made for the year 1980-81 made by Bangalore branch. Without looking to accounts I cannot tell how much profits made for the year 1980-81.... I have submitted all the account books to the HO. I have produced documents to show that I have submitted account books to Arisekere HO... I do not have any ack to show that, I had delivered accounts books to the HO... There was no business in the year 1982-83 the branch did not do business for the year 1983-84 on wards till date... I cannot say the profits for the year 1981-82. It is false 41 A.C.No.25/1987 to suggest that, I have not informed about the returns filed for the year 1981-82 regarding Bangalore branch... (page 6 and 7)
35. Apart from this he has further argued that "no proof is forthcoming from the petitioner in respect of the above extracted depositions. As Ex.R.9 the amount withdrawn by the petitioner is Rs.1,98,539.46/- and not Rs.1,42,000/-. Moreover, as per Ex.R.9 the petitioner has received the above amounts towards his share in the joint family properties. The petitioner has not produced any documents to show that he has returned the above said amounts. After 31.3.1980 the firm has not conducted any business in Bangalore and the Bangalore branch was solely in the custody of the petitioner and was being run by him in his individual capacity".
"The branch office at Bangalore has telephone. It is false to suggest that from 31.3.1980 the telephone is given to me exclusively. It is false to suggest that, the amount of Rs.1,41,270.04 Ps. was credited to my account on the date when the firm was credited to my account on the date when the firm was dissolved. It is false to suggest that, I am not partner of A.S.Krishna Setty and Sons Co., after 31.3.1980. It is true that in Ex.P.10 I have signed for A.S.Krishna Setty and Co., but I have not described myself as partner. Ex.P.11 to P.q24 are the statements sent to supply department and in them I am not described myself as a partner". (page 8) The business is the concerned at Bangalore was stopped since 1982-83. But the firm continued to exist. The business at HO Arasikere is continued. (page 10) "And thus it is clear that the petitioner has filed to make out a case to necessitate the appointment of Arbitrators to resolve the disputes 42 A.C.No.25/1987 between the parties under the Partnership Deed dated 28.4.1979. There are no existing disputes between the parties arising out of or in connection with the Partnership deed dated 28.4.1979. The petitioner has failed to produce the accounts books of the Bangalore branch from 1980. The petitioner's depositions are inconsistent with the true facts of the case. At Ex.P.10 the petitioner has singed on behalf of the erstwhile firm but has not signed in the capacity of a partner of the firm because as per Ex.R.9 and Ex.R.8 the petitioner was no longer a partner of the erstwhile firm under the Partnership deed dated 1.4.1980 and upon his release and after receiving his due share as evidenced by Ex.R.9 as per the understanding amongst the parties, the petitioner was allowed to carry on business in the Bangalore branch in his individual capacity using the name of the erstwhile firm. As per Ex.R.9 it is clear that the Telephone in the Bangalore branch was left to the exclusive use of the petitioner upon his release from the firm. The petitioner after receiving his share from the firm and the joint family properties after his release form the firm on 31.3.1980 and now is trying to lay claim again in the joint family properties of the respondents".
36. He has further contended about the evidence on record and conduct of the petitioner that "moreover, the Partnership deed dated 28.4.1979 is no longer in operation and the firm under the said deed was dissolved way back in 1980. Thus the petitioner cannot invoke or bring into operation a deed that is no longer in existence to suit his false and baseless claims. The petitioner has filed the instant case with the sole intention of unduly harassing the respondents and lay claim over a share of firm's profits and properties to 43 A.C.No.25/1987 which he has no lawful clam/right. The petitioner cannot now at this belated stage claim that he is not bound by the dissolution of the erstwhile firm M/s.A.S.Krishna Setty and Sons Co., after having executed a Release Deed dated 1.4.1980 and a document in his own handwriting evidencing the receipt of his share of the joint family properties. The instant petition is thus liable to be dismissed. The petitioner was in possession of the Bangalore office including the telephone furniture etc. which he has utilized for his business. The petitioner has admitted that he has not executed the said documents i.e. Ex.P.11 to P.24 as the partner of the firm. In the documents produced by the petitioner he has signed in capacity of a partner up to 31.3.1980. After 31.3.1980 it is clear from the said exhibits that the same have been signed by the petitioner his in individual capacity and not as the firm of the firm. On a bare perusal of the above mentioned exhibits it is evident that the petitioner was a partner of the firm only till 31.3.1980 and thereafter as per Ex.R.9 the petitioner continued to run his business in the Bangalore branch in his individual capacity and not in the capacity of the partner of the firm". As held above this court having no scope under Section of the Act, merits of the case cannot be gone into, as they can be agitated in the suit, having substantial issue.
37. The learned counsel for the respondents referred the well settled law that the principle of res judicata embodies the 44 A.C.No.25/1987 rule of conclusiveness and operates as a bar to try the same issue once again. He further argued that, "it is founded on the principle that a party who has once succeeded on an issue should not be harassed by multiplicity of proceedings involving the same issue. The same view has been fortified by the apex court in Satyadhyan Ghosal and others Vs Sm.Deorajin Debi and another AIR 1960 S.C. 941. The principle of res judicata is based on the need of giving a finality of judicial decisions. What is says is that once a res judicata it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter - whether on a question of fact or an a question of law - has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again....." Even after receiving his due share in the joint family properties after his release and separation from the firm and the family, the petitioner by way of the O.S.No.52/1995 claimed a share in the joint family properties. The petitioner has contested the sad case all the way up to the Hon'ble Supreme Court. The Hon'ble Supreme Court by order dated 13.5.2011 in S.L.P. (Civil) No.4485/2011 dismissed the said case and the same has attained finality. The petitioner through the instant case cannot seek for the appointment of Arbitrators as disputes regarding the 45 A.C.No.25/1987 petitioner's status in respect of the joint family properties and his share in the same have already been adjudicated at length by the courts in the previously instituted proceedings which have affirmed that he has already received his due share in the joint family properties. The instant case is thus not maintainable as it is barred by the tenets of res judicata and Section 11 of the CPC, 1908."
But these are outside the scope as the petition is hit by Section 8 of the Arbitration and Conciliation Act, 1940.
38. The learned counsel for the respondents referring the limitation, has further argued that "petitioner is wholly silent on the past litigation and going on and has suppressed crucial matters that have transpired between the parties. The petitioner having contested all the abovementioned proceedings at length cannot now turn back and say that the documents relied on by the respondents to establish their case in the previous proceedings are facts alone, this petition is liable to be dismissed. The petitioner has also attempted to mislead this Hon'ble Court by suppressing material facts and this act ought not be condoned. In the case of S.J.S. Business Enterprises (P) Ltd., Vs State of Bihar and Ors. Reported in AIR 2004 S.C. 2421 it was held that "As a general rule, suppression of a material fact by a litigant disqualifies such litigant from obtaining any relief. This rule has been evolved out of the need of the courts to deter a litigant from abusing the process of court by deceiving it. But the suppressed 46 A.C.No.25/1987 fact must be a material one in the sense that had it not been suppressed it would have had an effect on the merits of the case" and that the instant case is barred by time and thus the plaintiff is not entitled to any of the reliefs sought for. The petitioner has instituted the above case after nearly eight years of being released from the firm. Thus, when the application for appointment of Arbitrator hopelessly time barred, the appointment Arbitrator to consider a claim hopelessly barred by limitation is without jurisdiction and is thus liable to be dismissed".
Since the petition itself not tenable as petitioner cannot invoke Section 8 of the Act. However, suppose it is applied presuming that it was by consent of the parties but dissolution and other factors as considered above, indicate that he had knowledge that he was deprived his alleged right in the year 1980 specifically from the date 1.4.1980 and he failed to invoke it within 3 years of limitation. So on this point also he cannot invoke Section 8 of the Act of 1940 and it is barred by time.
39. In view of the above discussion about the maintainability of the petition before this court under Section 8 of Act 1940, this court cannot go into the merits of the case. Apart from this the petitioner has already filed the suit for 47 A.C.No.25/1987 rendition of accounts and dissolution of firm etc., Therefore the narrated points in nutshell submitted by the learned counsel for the respondents for dismissal i.e.
1. petitioner retired from the firm M/s.A.S.Krishna Setty and sons Co. though the release deed dated 1.4.1980.
2. after his retirement from the firm by receiving due consideration and after settlement of all his accounts, with effect from 31.3.1980 the petitioner had nothing to do with the firm;
3. the Bangalore branch of the firm was given to the petitioner for his exclusive use and it was being run by the petitioner independently.
4. after the petitioner's release the firm was reconstituted vide partnership deed dated 1.4.1980.
5. the firm was again reconstituted vide partnership deed dated 1.4.1981 and the firm was renamed M/s.A.S.Krishna settee sons and co.,,
6. the petitioner has not produced sufficient evidence in support of his claims.
7. no arbitrable disputed arise out of or in connection with the partnership deed dated 28.4.1979 as the said partnership was dissolved and the firm ahs been reconstituted thereafter.
8. disputes regarding the plaintiff's share in the firm and joint family properties have already been adjudicated at length in O.S.No.52/1995 R.F.ANo.525/2001 and SLP (Civil No.4485/2011 and the same have attained finality. The instant petition is barred by res judicata.
9. Ex.R.9 clearly evidences the receipt of cash by the petitioner in lieu of his share in the firm and the joint family property.
48 A.C.No.25/1987
10. the instant petition is barred by time.
11. the plaintiff has suppressed and misrepresented all material facts so as to suit his false claim. etc., are the matters cannot gone into on merits to decide the dispute. Now coming to the specific contention and arguments put forth by the learned counsel for the petitioner for consideration, as because he has argued referring the claim and contention of the petitioner which is also specifically stated in the memo dated 2.1.2016 at para No.20, which is relevant to reproduce the same, which is reads thus:
"It is submitted that liquidator can dissolve the firm where the liquidator cannot resolve the disputes. So the contention that during pendency of Arbitration case A.C.No.25/1987, dissolution case O.S.No.4799/1994 has been filed and that during the pendency of dissolution case, Arbitrator cannot be appointed as Arbitrator as he has also got powers to dissolve the firm does not hold good, as the same goes much against to facts and circumstances petitioner filed Arbitration case in 1987, as the respondents never co-operated in appointing Arbitrator as against the condition of Partnership deed, the petitioner requested this Hon'ble court to appoint the Arbitrator. Later, petitioner filed dissolution case, O.S.No.4799/1994, after a lapse of 7 years from the date of filing Arbitration case. This is not against to law. Again in the plaint of dissolution case O.S.No.4799/1994, the cause of action is different, which will not erase the legitimate rights of the petitioner, as such the respondents while submitting their oral arguments have not considered to read the plaint anywhere and moreover have not read the relevant portion of the cause of action, but instead they were traversing the issues framed in O.S.No.4799/1994. The respondents have delayed the case unnecessarily by denying the justice to the petitioner. Defendants misleading this court and protracting the case, this is abuse of process of law".49 A.C.No.25/1987
40. Thus it is clear from the contention of the plaintiff that he has filed a suit O.S.4799/1994 for dissolution of firm etc., Therefore, the arguments and contention for the petitioner put forth his learned counsel regarding the summoning the records and documents from the concerned Registrar of Firms, from the Professional Tax Officer and against the respondents regarding account books of said firm etc., as the books of accounts are in the head office, and that about the status of Hindu Undivided family and the Partnership firm being different and misrepresentation and cheating the petitioner etc., are not the matters coming within the scope of this petition which itself is not maintainable under law. However, the petitioner has invoked the jurisdiction of Civil court by filing said O.S.NO.4799/1994. He can agitate the dispute raised in the present case.
41. However both the petitioner and respondents who are the parties to Ex.P.1 are at liberty to agitate their respective claims available to them under law in the said suit O.S.NO.4799/1994. Hence it is a fit case to dismiss the petition as the petitioner cannot invoke Section 8 of the Act of 50 A.C.No.25/1987 1940 for appointment of Arbitrator as prayed for. Hence, point Nos. 1 and 2 are answered in the negative.
60. Point No.5:- In view of discussion made above and conclusion arrived at it is proceeded to pass the following;
: ORDER :
The Arbitration Case filed by the Petitioner under Section 8 of the Arbitration Act, 1940 is hereby dismissed.
Parties are directed to bear their own costs.
(Dictated to the Judgment Writer, transcribed by her, corrected and then signed and pronounced by me in the open court on this the 20th day of August, 2016) (Yadav Vanamala Anandrao) LII Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE List of the witnesses examined for the plaintiff:
P.W.1 K.A.Sathish Kumar List of the documents marked for the plaintiff:
Ex.P.1 Partnership Deed
Ex.P.2 Letter issued to respondent No.1(a)
Ex.P.3 Copy of the notice
Ex.P.4 Reply
Ex.P.5 to P.9 Sales tax returns
Ex.P.10 to P.24 Statements sent to supply
Department
Ex.P.25 Letter written by the plaintiff
51 A.C.No.25/1987
Ex.P.26 & P.27 K.S.T. Certificates
Ex.P.28 to P.30 Documents issued by Sales
Tax department
Ex.P.31 & P.32 Enrolment certificates
Ex.P.33 & P.34 Notices issued by Professional
Tax Officer
Ex.P.35 Endorsement
List of the witnesses examined for the defendants:
D.W.1 Anantha Lakshmana Shetty List of the documents marked for the defendants:
Ex.R.1to R.3 Income Tax Assessment Orders Ex.R.4 Communication sent from the office Of Registrar Ex.R.5 Partnership Deed dated 1.4.1980 Ex.R.6 Partnership Deed regarding Ratna Talkies Ex.R.7 Firm Registration Certificate of Ratna Talkies Ex.R.8 Copy of the Release Deed Ex.R.9 Letter written by the petitioner LII Addl. City Civil & Sessions Judge, Bengaluru.52 A.C.No.25/1987 53 A.C.No.25/1987
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