Madras High Court
A.Ayyasamy vs A.Paramasivam on 11 December, 2014
Author: M.Duraiswamy
Bench: M.Duraiswamy
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 11.12.2014 CORAM THE HONOURABLE MR.JUSTICE M.DURAISWAMY C.R.P.(MD)(PD).Nos.1687 of 2014 and 1688 of 2014 and M.P.(MD)No.1 of 2014 C.R.P.(MD)NO.1687 of 2014 A.Ayyasamy ... Petitioner/Defendant/ Respondent/Petitioner Vs. 1. A.Paramasivam 2. A.Narayanan 3. A.Shanmugavel 4. A.Murugan ... Respondents/Plaintiffs/ Petitioners/Respondents Prayer: Civil Revision Petition has been filed under Article 227 of the Constitution of India to set aside the fair and decreetal order passed by the learned I Additional District Munsif,Tirunelveli made in I.A.No.210 of 2013 in I.A.No.1172 of 2012 in O.S.No.588 of 2012 dated 25.04.2014. C.R.P.(MD)NO.1687 of 2014 A.Ayyasamy ... Petitioner/Defendant/ Petitioner Vs. 1. A.Paramasivam 2. A.Narayanan 3. A.Shanmugavel 4. A.Murugan ... Respondents/Plaintiffs/ Respondents Prayer: Civil Revision Petition has been filed under Article 227 of the Constitution of India to set aside the fair and decreetal order passed by the learned I Additional District Munsif, Tirunelveli made in I.A.No.656 of 2013 in O.S.No.588 of 2012 dated 25.04.2014. !For Petitioner in both petitions : Mr.Isaac Mohanlal for Mr.Ananth C.Rajesh ^For Respondents in both petitions : Mr.G.Prabhu Rajadurai :COMMON ORDER
Reserved on : 03.12.2014 Pronounced on:11.12.2014 The Civil Revision Petition in C.R.P.(MD)No.1687 arises against the fair and decreetal order passed in in I.A.No.210 of 2013 in I.A.No.1172 of 2012 in O.S.No.588 of 2012, on the file of the I Additional District Munsif Court, Tirunelveli. The Civil Revision Petition in C.R.P.(MD)No.1688 of 2014 arises against the fair and decreetal order passed in I.A.No.656 of 2013 in O.S.No.588 of 2012,on the file of the I Additional District Munsif Court, Tirunelveli. Both the Civil Revision Petitions have been filed by the defendant in the suit.
2. The plaintiff filed the suit in O.S.No.588 of 2012 for declaration that the plaintiffs as partners of the deed of partnership dated 01.04.1994 are entitled to participate in the administration of the Hotel Arunagiri and for permanent injunction restraining the defendant from interfering with the same.
3. In the plaint the plaintiffs have averred that the plaintiffs, the defendant and their father were partners in the Hotel Arunagiri situated in Tirunelveli Junction. The partnership deed was executed on 01.04.1994. All the six partners had 1/6th share in the partnership business. The plaintiffs' father died on 28.04.2009. The hotel was managed and administered by the plaintiffs' father in a disciplined manner till his death. The defendant being the eldest of the family wanted to take the administration of hotel Arunagiri by saying that he will be following the foot of his father. It was resolved by all the brothers that the day-to-day collection money from the hotel should be deposited on the next day into the hotel current Account in the Indian Overseas Bank, Tirunelveli Junction. The plaintiffs reposed confidence with the defendant and believed that he would never be detrimental to the smooth running of the business.
4. Thus the hotel administration was taken over by the defendant on 20.06.2009. But unfortunately, he had not deposited the day-to-day collection money into the deposit as agreed. The defendant had fraudulently signed and issued a cheque for Rs.10,00,050/- dated 17.06.2010 of hotel Arunagiri in favour of his son without the knowledge and consent of the other partners. The first defendant had no authority whatsoever to give the hotel money to his son. The said money was not yet repaid neither by the defendant nor by his son into the hotel accounts. This is a clear case of misappropriation of common fund. The defendant is keeping the hotel account books with him and he is continuously taking the day-to-day collection money to home high handedly.
5. On 29.07.2010, the third plaintiff sent a legal notice to the defendant calling upon him to deposit the accrued amount of Rs.28,82,690/-, which was in his illegal custody. In the reply dated 02.09.2010, the defendant had categorically admitted the fact that Rs.26,86,690/- was with him and that he was bound to render account and that he will not be running away from his responsibilities. Subsequently, there were exchange of notices between the parties. The third plaintiff sent a notice dated 28.10.2010 calling upon the defendant to deposit a sum of Rs.46,00,000/- into the bank account. But he did not deposit the money.
6. The average money collection per day is Rs.40,000/- from the hotel. There are 66 non-A/c rooms and 7 air-conditioned rooms, 2 conference halls and one canteen building in the hotel Arunagiri. Even now the defendant is taking the day-to-day collection money from the hotel. The defendant also committed the offences of cheating, breach of trust, misappropriation of partnership money. There is a serious question to be tried in this suit to safeguard the plaintiffs' partnership and property rights. There is substantial mischief done by the defendant to the plaintiffs. The defendant is guilty of breach of trust in the conduct of business of partnership and it became impossible to permit him to swindle the common funds and irreparable injury is being caused by him to other partners.
7. The defendant has not so far paid the profit to the plaintiffs for the financial years 01.04.2009 to 31.03.2010 and 01.04.2010 to 31.03.2011. Altogether every partner is entitled to Rs.8,87,338/-. The defendant is not keeping the account books of the firm in the hotel premises and he has shifted the account books to his residence to prevent access to the plaintiffs. On 30.03.2011 when the first plaintiff went to the hotel, he was prevented and beaten by the defendant. The first plaintiff lodged a complaint with the Palam Police Station, Tirunelveli in Cr.No.318 of 2011 and the same is now pending before the learned Judicial Magistrate No.I, Tirunelveli in C.C.No.44 of 2012 and the trial is in progress.
8. The defendant was acting against the interest of the plaintiffs and that the defendant had openly said during the mediation that no court or police can take away the lodge administration from him and he would be enjoying the fruits of the lodge till his life time. The plaintiffs have got every authority to take back the lodge administration from the defendant. In these circumstances, the plaintiffs filed the suit.
9. At the time of filing the suit, the plaintiffs also filed an application in I.A.No.1172 of 2012 under Order 39 Rule 1 and 2 of the Code of Civil Procedure to grant an order of interim injunction restraining the defendant from preventing the plaintiffs from entering the hotel Arunagiri to carry out the routine day-to-day work.
10. The defendant filed two applications viz., (i) I.A.No.210 of 2013 in I.A.No.1172 of 2012 under Section 8 of the Arbitration and Conciliation Act, 1996 and (ii) I.A.No.656 of 2013 in O.S.No.588 of 2012 under Section 8 of the Arbitration and Conciliation Act, 1996 to dismiss the injunction application and the suit respectively, since there is a provision for arbitration in the partnership agreement.
11. The plaintiffs contended that in the partnership deed as per the arbitration clause, the partners appointed Arunagiri as arbitrator to resolve the disputes between the parties. Since the said Arunagiri died on 28.04.2009, according to the plaintiffs, the said clause has no application. Further the plaintiffs contended that only the civil Court has jurisdiction to try the present suit and the issue cannot be decided by an arbitrator.
12. The trial Court after taking into consideration the case of both parties, dismissed both the applications and held that only a civil Court has jurisdiction to try the suit.
13. Aggrieved over the same, the defendant has filed the above Civil Revision Petitions.
14. Heard Mr.Isaac Mohanlal, learned Counsel appearing for the petitioner and Mr.G.Prabhu Rajadurai, learned Counsel appearing for the respondents.
15. The learned Counsel appearing for the revision petitioner submitted that the civil Court has no jurisdiction to try the present suit in view of the arbitration clause mentioned in the partnership deed dated 01.04.1994. Further the learned Counsel submitted that as per the partnership deed, all disputes between the parties have to be resolved only by an arbitrator. The learned Counsel further submitted that since it was agreed between the parties that all the disputes should be resolved by an arbitrator, the filing of the present suit before the civil Court is not maintainable and the trial Court should have referred the matter to the arbitrator.
16. The learned Counsel further submitted that the issue involved in the present suit can also be decided by an arbitrator and that in the earlier proceedings between the parties, the second plaintiff filed a suit in O.S.No.23 of 2005, on the file of the District Court, Tirunelveli for dissolution of partnership firm and for rendition of accounts as against the other partners. A similar application was taken out by the defendants therein in I.A.No.97 of 2005 to refer the dispute to an arbitrator and the trial Court had allowed the application and referred the matter to the arbitrator. Against which the plaintiff preferred a Civil Revision Petition in C.R.P.(PD)No.906 of 2006 and by order dated 31.01.2007, this Court confirmed the order of the trial Court and dismissed the revision. Ultimately the matter was referred to arbitrator for dissolution of partnership and for rendition of accounts.
17. The learned Counsel further submitted that since the dispute between the parties in the suit in O.S.No.23 of 2005 was already referred to the arbitrator, the present dispute can also be dissolved by an arbitrator and therefore, the trial Court should have allowed the applications filed by the defendant.
18. In support of his contentions, the learned Counsel appearing for the revision petitioner relied upon the following judgments:
(i) In Abdul Kadir Shamsuddin Bubere Vs. Madhav Prabhakar Oak and another reported in AIR 1962 Supreme Court 406, wherein the Honourable Supreme Court held that where allegations of fraud are made, the party against whom the allegations are made may successfully resist the reference to arbitration.
(ii) In H.G.Oomor Sait and another Vs. Aslam Sait reported in 2001(3) CTC 269 wherein this Court held that civil Court is not prevented from proceeding with the suit despite an arbitration clause if dispute involves serious questions of law or complicated questions of fact adjudication of which would depend upon detailed oral and documentary evidence.
(iii) In Kotak Mahindra Bank Ltd., Vs. Sundaram Brake Lining Ltd., and two others reported in 2008(4) CTC 1, wherein this Court held that in an application filed under Section 8 to refer the parties to Arbitration the Court cannot and need not go into question as to whether agreement entered into between parties is vitiated by fraud etc. Further this Court held that such question can also be determined by arbitrator himself.
19. The trial Court while dismissing the applications relied upon a judgment of the Honourable Supreme Court in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72, wherein the Honourable Apex Court held as follows:
"25. The learned Counsel for the respondents further elaborated his contention citing the decision of the High Court of Judicature at Madras in H.G.Oomor Sait V. O.Aslam Sait reported in (1999)5 SCC 688, wherein it was held:
"Power of civil Court to refuse to stay of suit in view of arbitration clause on existence of certain grounds available under the 1940 Act continues to be available under the 1996 Act as well and the civil Court is not prevented from proceedings with the suit despite an arbitration clause if dispute involves serious questions of law or complicated questions of fact adjudication of which would depend upon detailed oral and documentary evidence.
The civil Court can refuse to refer matter to arbitration if complicated question of fact or law is involved or where allegation of fraud is made.
Allegations regarding clandestine operation of business under some other name, issue of bogus bills, manipulation of accounts, carrying on similar business without consent of other partner are serious allegations of fraud, misrepresentations, etc., and therefore application for reference to arbitrator is liable to be rejected."
We are in consonance with the above referred decision made by the High Court in the matter concerned.
26. In the present dispute faced by us, the appellant had made serious allegations against the respondents alleging them to commit malpractices in the account books and manipulate the finances of the partnership firm, which, in our opinion, cannot be properly dealt with by the arbitrator. As such, the High Court was justified in dismissing the petition of the appellant to refer the matter to an arbitrator. In this connection, it is relevant to refer to the observation made by the High Court in its impugned judgment:
"The above decision squarely applies to the facts of the present case. In the present case as well there is allegation of running rival firm, interference with the smooth administration of the firm. As already stated since the suit has been filed for declaration to declare that the revision petitioner is not a partner with effect from 18.11.2005, and for consequential injunction restraining the petitioner from disturbing the smooth functioning of the first respondent firm, the issue relates to the causes which compelled the respondents to expel the revision petitioner from the partnership firm and the necessity to reconstitute the firm by entering into a fresh partnership deed. Therefore such issues involve detailed evidence which could be done only by a civil court..."
20. Mr.Isaac Mohanlal, learned Counsel appearing for the revision petitioner submitted that the said judgment of the Honourable Apex Court was held to be a judgment in "per incuriam" as per the judgment of the Honourable Supreme Court in Swiss Timing Limited Vs. Organising Committee, Commenwealth Games-2010, Delhi reported in 2014(3) CTC 830, which reads as follows: "21. This judgment was not even brought to the note of the Court in N.Radhakrishnan's case. In my opinion, judgment in N.Radhakrishnan's case is per incuriam on two grounds; Firstly, the judgment in Hindustan Petroleum Corpn. Ltd., though referred has not been distinguished but at the same time is not followed also. The judgment in P.Anand Gajapathi Raju & Ors. was not even brought to the notice of this Court. Therefore, the same has neither been followed nor considered. Secondly, the provision contained in Section 16 of the Arbitration Act, 1996 were also not brought to the notice by this Court. Therefore, in my opinion, the judgment in N.Radhakrishnan does not lay down the correct law and cannot be relied upon."
21. The learned Counsel also relied upon the following judgments with regard to the principle of "per incuriam":
(i) In State of U.P. and Another Vs. Synthetics and Chemicals Ltd., and Another reported in (1991)4 Supreme Court Cases 139, wherein the Honourable Supreme Court held that a conclusion without reference to relevant provision of law is weaker than even casual observation. In the absence of any discussion or any argument, the order was founded on mistake of fact and therefore, it could not be held to be law declared. Therefore, the conclusion of law by the Constitution of Bench that no sales or purchase tax could be levied on industrial alcohol with utmost respect fell in both the exceptions, namely rule of sub-silentio and being in per incuriam, to the binding authority of the precedents.
(ii) In Babu Parasu Kaikadi (dead) by LRs. Vs. Babu (dead) through LRs.
reported in (2004)1 Supreme Court Cases 681, wherein the Honourable Supreme Court held as follows:
?13. The learned Judges although touched upon the question as regards obtaining legal possession, unfortunately failed to notice the mandatory provisions of Sections 15 & 29 of the Act. Once it is held that the provisions of Sections 15 & 29 are mandatory, it goes without saying that possession obtained by the landlord in violation of such mandatory provisions would be illegal. A statute, as is well known, must be read in its entirety. The expression "dispossession? having regard to the text and context of the Act cannot be given its natural meaning. The High Court arrived at a finding of fact that the appellant herein had satisfied all the requirements as contained in Section 32 (1-B) of the Act. The High Court, however, relying on or on the basis of the decision of this Court in Dhondiram Totoba Kadam reported in (1994) 3 SCC 366 dismissed the appeal of the appellant. The High Court, as noticed hereinbefore, however, felt that the question raised is of great general importance.
14. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Totoba Kadam reported in (1994) 3 SCC 366, having not noticed the earlier binding precedent of a co-ordinate Bench and having not considered the mandatory provisions as contained in Section 15 & 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent.
15. In Halsbury's Laws of England, 4th Edition Volume 26 it is stated:
"A decision is given per incuriam when the Court has acted in ignorance of a previous decision of its own or of a court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow; or when it has acted in ignorance of a house of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force."
16.In State of U.P. vs. Synthetics and Chemicals Limited reported in (1991) 4 SCC 139, this Court observed: (SCC pp. 162-63, para 40) ?40."Incuria" literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd. Reported in (1944) 2 All ER
293) same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law."
17.In Govt. of A.P. v. B.Satyanarayana Rao reported in (2000)4 SCC 262 : 2000 SCC (L & S) 486, it has been held as follows: (SCC p.264, para 8) "The rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a court omits to consider any statute while deciding that issue."
18.Furthermore, this Court, while rendering judgment in Dhondiram Totoba Kadam reported in (1994) 3 SCC 366, was bound by its earlier decision of co-ordinate Bench in Ramchandra Keshav Adke reported in (1975) 1 SCC 559. We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the Bar and also without reference to the mandatory provisions of the Act.?
(iii) In Word Sport Group (Mauritius) Ltd., Vs. MSM Satellite (Singapore) Pte. Ltd. reported in AIR 2014 Supreme Court 968. In this judgment, the Honourable Supreme Court while referring to N.Radhakrishnan's case reported in (2010)1 Supreme Court Cases 72 observed that the judgment was rendered in the context of domestic arbitration and not in the context of arbitrations under the New York Convention to which Section 45 of the Act applies. Therefore, the Honourable Supreme Court has not considered the Radhakrishnan's case.
22. Countering the submissions made by the learned Counsel for the petitioner, Mr.G.Prabhu Rajadurai, learned Counsel for the respondents submitted that since the plaintiffs allege fraud and misappropriation, only the civil Court has jurisdiction to try the suit and decide the dispute between the parties and the arbitrator shall not have jurisdiction to try the issue with regard to fraud and misappropriation. The learned Counsel further submitted that the judgment in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 is squarely applies to the facts and circumstances of the present case. That apart, the learned Counsel submitted that this Court is bound by the decision of the Honourable Apex Court in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72, since it was delivered by the Bench of two Honourable Judges, whereas the judgment in Swiss Timing Limited Vs. Organising Committee, Commenwealth Games-2010, Delhi reported in 2014(3) CTC 830, finding the judgment reported in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 as "per incuriam" was delivered by a Honourable Judge of the Honourable Apex Court in Arbitration petition.
23. The learned Counsel for the respondents in support of his contention also relied upon the following judgments:
(i) In M/s Keen Engineers represented by its Partner, Mr.V.Venkateswaran and another reported in (2004)3 MLJ 321, wherein this Court held that though the partnership deed contains an arbitration clause, it shall not prevent the parties from approaching the Civil Court.
(ii) In H.G.Oomor Sair and another Vs. O.Aslam Sait reported in 2001(3)CTC 269, wherein this Court held as follows:
?(B) The next ground which would justify rejecting the position is the serious allegations of fraud, collusion, misappropriation, etc. Rulings have already been quoted signifying that in matters where serious allegations of fraud are projected and the decision would depend upon consideration of minute details of evidence, it is always desirable to let the civil court to go into the issue rather than to leave it to the Arbitrator before whom the nature of the proceedings are summary and rules of evidence are not applicable. In the present case, the plaintiff has positively made such allegations in no uncertain terms. In Paragraph No.VI, allegations of clandestine operation of running the business under the name and style of "Foot Fashion" have been made. It is alleged that the plaintiff come to know of such action only on coming across the bill which has been issued by the defendants in the very same place where the Partnership business was carried on. In Paragraph No.VII to IX, the plaintiff alleges that in spite of demand he has not been allowed access to the accounts. In Paragraph No.X the plaintiff alleges collusion between the defendants and their action of covering up the business of "Foot Fashion". In Paragraph No.XI, misappropriation of funds are alleged. In Paragraph No.XlI, diversion of funds of the partnership has been alleged. In Paragraph No.XIIl a further allegation of misappropriation is made and reference is also made to the Partnership agreement prohibiting commencement of similar business without consent of all the partners. In Paragraph No.XIV manipulation of records and in Paragraph No.XV allegations of hurried attempts to divert the funds are also made, thus seeking appointment of a Receiver.
It is true that such allegations being made in a passing manner or in a routine manner need not be regarded at all and the court has to see whether there is any prima facie case for such allegations. In the present case, the plaint contains certain basic details which would constitute a proper allegation of collusion, diversification of funds which of course, are subject to satisfactory evidence and proof. In Paragraph No.12 details of facts are given which according to the plaintiff would constitute issue of bogus bills and attempt to manipulate the accounts. Reference is also made to the Tamil Nadu General Sales Tax numbers obtained on 15.4.1999. In Paragraph XIII, reference is made to the conduct of defendants 2 and 3, paying money through their credit cards for their personal liability from and out of funds of the firm. It is also not disputed by the defendants that no written permission was obtained from the plaintiff in terms of clause 13 of the Partnership agreement for starting a similar business. Therefore, I am inclined to hold that there are prima facie materials to sustain serious allegations of fraud, misappropriation etc. and that such allegations are not made in a passing or routine manner. Such allegations do require strict scrutiny of oral and documentary evidence which would be best left to the Civil Court.
24. On a careful consideration of the materials available on record and the submissions made by the learned Counsel for the petitioner and the learned Counsel for the respondents, it could be seen that the parties are not disputing the partnership deed dated 01.04.1994. It is also not in dispute that there is an arbitration clause in the partnership deed. As per the arbitration clause, any dispute between the parties shall be resolved by an arbitrator. It is also not in dispute that the second plaintiff has filed another suit in O.S.No.23 of 2005, on the file of the District Court, Tirunelveli and in that suit, the defendants therein, who are also the partners of the partnership firm, filed an application under Section 8 of the Arbitration and Conciliation Act 1996, to refer the matter to Arbitrator, which was allowed by the trial Court. Against which, the plaintiff preferred a Civil Revision Petition in C.R.P.(MD)NO.906 of 2006 and this Court also confirmed the order passed by the trial Court.
25. But the prayer sought for in that suit was for dissolution of partnership and for rendition of accounts. In the case on hand, the plaintiffs are alleging fraud and misappropriation by the defendant. While so, merely because the earlier application filed under Section 8 of the Arbitration and Conciliation Act was allowed is not a ground to allow the present application. The prayer sought for in the earlier suit is completely different from the prayer sought for in the present suit. Therefore, the earlier order passed in I.A.No.97 of 2005 in O.S.No.23 of 2005 shall not operate as res judicata.
26. On a reading of the entire pleadings, it is clear that the plaintiffs have made specific allegations of fraud and misappropriation by the defendant. In the plaint they have also stated that the defendant by his reply admitted his liability to pay the amount to the plaintiffs. That apart, the plaintiffs have also stated that the defendant is continuing to take away the daily collections from the hotel without depositing the same into the Bank account. Therefore, from the averments stated in the plaint, it is clear that the plaintiffs are alleging fraud and misappropriation by the defendant.
27. In the judgment in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72, the Honourable Supreme Court held that if serious allegations as to fraud and malpractices committed in account books and manipulation of finances of partnership firm are made, the case does not warrant matter to be tried and decided by an arbitrator and that it should be in a court of law which would be more competent and have the means to decide such a complicated matter. Therefore reference to arbitration is not warranted. This judgment was rendered by two Honourable Judges of the Supreme Court.
28. In the judgment reported in Swiss Timing Limited Vs. Organising Committee, Commenwealth Games-2010, Delhi reported in 2014(3) CTC 830, which was rendered by a Honourable Judge of the Apex Court in arbitration petition, it has been held that the judgment in N.Radhakrishan, does not lay down the correct law and cannot be relied upon and the judgment is "per incuriam". The Honourable Supreme Court held that the judgment in Hindustan Petroleum Corpn. Ltd., VS. Pinckcity Midway Petroleum's reported in 2003(6) SCC 503 was not considered and that Section 16 of the Arbitration Act, 1996 was also not brought to the notice of the Court while rendering the judgment in Radhakrishnan's case. Therefore, the Honourable Judge of the Supreme Court held that the judgment in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 is "per incuriam".
29. It is settled position that the judgment delivered by the Honourable Supreme Court is the law of the land. Though the Honourable Apex Court in its judgment reported in Swiss Timing Limited Vs. Organising Committee, Commenwealth Games-2010, Delhi reported in 2014(3) CTC 830 found that the judgment in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 is "per incuriam", the judgment delivered by a Bench of two Honourable Judges in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 is binding on this Court. Therefore, following the judgment of the Honourable Apex Court laid down in the judgment in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72, I am of the considered view that since there is a serious allegation as to fraud and malpractices committed by the defendant in respect of the finances of the partnership firm, the case does not warrant matter to be tried and decided by the arbitrator and the same should be tried only in a civil Court which would be more competent and have the means to decide such complicate matter.
30. Though the partnership deed contains an arbitration clause, it shall not prevent the parties from approaching the civil Court. In the facts and circumstances of the present case, the issues can be decided only by a civil Court, after full-fledged trial of the suit. The nature of enquiry before an arbitrator is summary and rules of procedure and findings are not binding. In the case on hand, the jurisdiction with regard to fraud and misappropriation requires serious consideration of evidence and such cases are best left to the Civil Court.
31. So far as the contention that after the death of A.Arunagiri, the arbitration clauses ceases to exist is concerned, the said stand cannot stand for the reason that even in the case of death, the arbitrator appointed under the agreement, the arbitration clause shall continue to exist. Even if the arbitration clause exists, since the issue involved in the present suit is one of fraud and misappropriation, the ratio laid down by the Honourable Apex Court in N.Radhakrishnan Vs. Maestro Engineers and Others reported in (2010)1 Supreme Court Cases 72 squarely applies to the facts and circumstances of the present case.
32. The trial Court after taking into consideration all these aspects rightly dismissed the applications. That apart, the defendant has filed the applications praying for dismissal of the suit as well as the injunction application under Section 8 of the Arbitration and Conciliation Act. The matter can only be referred to arbitrator, where there is an arbitration agreement. The defendant cannot seek for dismissal of the suit or application under Section 8 of the Arbitration and Conciliation Act. In both the applications, the defendant has prayed for dismissal of the suit as well as the injunction application which cannot be granted. In these circumstances, I find no error or irregularity in the orders passed by the trial Court.
33. Accordingly, both the Civil Revision Petitions are devoid of merits and the same are dismissed. Consequently, the connected Miscellaneous Petition is also dismissed. However, there shall be no order as to costs.
11.12.2014 Index :Yes/No Internet :Yes/No ssl To The I Additional District Munsif Court, Tirunelveli.
M.DURAISWAMY,J.
ssl Pre-Delivery Order made in C.R.P.(MD)(PD).Nos.1687 and 1688 of 2014 and M.P.(MD)No.1 of 2014 11.12.2014