Order This is an application for the slay of a suit under S. 34 of the Arbitration Act. 1940. The facts relating to the making of the present application may be briefly noted. 2. The Petitioner and the respondents used to carryon business in partnership under the name and style of' Technologies for the manufacture of various machines parts, switch gear etc. After the business went on for some years, disputes and differences arose between the petitioner and the respondents with regard to the carrying on of the business. It appears from the records that the dispute really started when the' father of the petitioner who was a high placed executive in Macneill & Barry Ltd. (now Macneill & Magor Ltd.) and who was at the inception of the partnership business induced to leave his old job and joined this firm had how been served with a notice of termination of his service. The services of the sister or the petitioner who was also given a job in the partnership firm in a clerical capacity bad also been similarly terminated. Further details of the disputes and differences however are immaterial for the purpose of the present application. 3. On or about 8th June, 1973 the respondents filed Special Suit No. 39 of 1978 against the petitioner under S. 20 of the Arbitration Act, 1940 for the filing of the arbitration agreement in Court and for an order of reference. In that Special Suit the respondents herein made an application under S.41 for various injunctions and other reliefs in which certain orders were made by Sabyasachi Mukharji. J with regard to the operation of the account of the firm and the monies thereof. The details of those orders which were passed from time to time need not be gone into in this application. According to the records, the petitioner herein also made an application on the 11th September, 1978 for the appointment of the Receiver for the business of the firm on which no order was passed. 4. On the 17th October, 1978 the petitioner before me sent a notice for dissolution of the partnership. The petitioner alleges that the partnership is a partnership-at-will and was dissolved and stood dissolved on the service of the notice of termination. 5.
4. On the 17th October, 1978 the petitioner before me sent a notice for dissolution of the partnership. The petitioner alleges that the partnership is a partnership-at-will and was dissolved and stood dissolved on the service of the notice of termination. 5. In the plaint in the suit which is sought to be stayed by the present application a large number of allegations have been made against the respondents. The final relief however is the usual relief claimed in an action for dissolution of a partnership viz., a declaration that the partnership stood dissolved on the service of the notice alternatively a decree for dissolution of the partnership mainly on the grounds mentioned in S.44(f) and (g) of the Indian Partnership Act, 1932 and accounts. 6. It may be noted that in this suit an application for Receiver was made and one Kalyan Das Gupta was appointed Receiver by a learned Judges presiding over the Vacation Bench of this Court with certain directions on the Receiver with regard to the initialing of the books of account and other letters and documents of the firm. That order was subsequently varied by me to some extent. Now the petitioner before me who are the defendants in the above suit have came up for this application for stay of the suit. 7. The principal contention which was canvassed before me by the parties was whether the reliefs claimed in the suit are covered by arbitration agreement the terms of the arbiration agreement are contained in clause 16 of the Partnership Deed and may be set out. "Clause: 16 All disputes between the partners relating to the partnership shall at the first instance be referred to arbitration under the Arbitration Act of 1940 or any statutory modification thereof for the time being in force.” 8. It was not in dispute that the arbitration agreement between the parties was a valid agreement. The only controversy between the parties was whether the dispute raised in the suit was covered by the arbitration agreement. On a perusal of the plaint it is found that it is the suit for the dissolution of partnership with the usual prayer for a declaration that the partnership stood dissolved on the date of the service of notice that is October 17, 1978 on the basis that it was a partnership-at-will.
On a perusal of the plaint it is found that it is the suit for the dissolution of partnership with the usual prayer for a declaration that the partnership stood dissolved on the date of the service of notice that is October 17, 1978 on the basis that it was a partnership-at-will. Alternatively there a prayer for a decree of dissolution of partnership by Court on the grounds mentioned in S. 44(1) and (g) of the Partnership Act, 1932 and for accounts. 9. Mr. Bhabra for the applicant strongly relied on a decision of the Supreme Court in the Case of Erach F.D. Mehta v. Minoa F D. Mehta, reported in AIR 1971 SC 1653 , In that case the arbitration agreement was somewhat similar to the one before us. In that case it was held inter alia by Shah, J of the Supreme Court that "A dispute whether the partnership was dissolved by mutual agreement was clearly a dispute between the parties touching the partnership agreement." On the strength of this decision Mr. Bhabra contended that the question of dissolution as prayed for in the pending suit being a question touching the partnership agreement can be decided by the Arbitrator already appointed and in that view of the matter the instant suit should be stayed. Mr. Bhabra also relied on certain other decisions namely including that in the case of Nitya Kumar Chatterjee v. Sukhendu Chandra, AIR 1977 Cal 130 ; where a Division Bench of this Court observed that in a suit for dissolution of partnership on the ground that it was just and equitable, Court's jurisdiction to give appropriate relief was not ousted by the provision of arbitration in a partnership deed and it was a matter of discretion. In the case of Banwarilal Agarwalla & vrs. v. Inderjit Singh reported in AIR 1955 Notes on Unreported Cases, page 2937, a Division Bench of this Court has also observed that the arbitrator in an appropriate case had the power to grant dissolution of partnership. Reliance was also made on an unreported judgment of Sabyasachi Mukharji J delivered on the 15th march 1978 on Brij Gopal Binani & Ors. V. Sreelal Binani ; & Ors wherein most of the above mentioned cases have been noted. 10.
Reliance was also made on an unreported judgment of Sabyasachi Mukharji J delivered on the 15th march 1978 on Brij Gopal Binani & Ors. V. Sreelal Binani ; & Ors wherein most of the above mentioned cases have been noted. 10. Mr Somnath Ghatterjee appearing for the respondent strongly relied on the decision of Masud J in the case of Ganesh Chandra v. Kamal Kumar, AIR 1971 Cal 317 ; where it was held that in a suit for dissolution of partnership on the ground that it was just and equitable under S.44 (f) and (g) of the Partnership Act, the dispute 'relating to the partnership should be decided by the Court and therefore the Court should exercise discretion in not staying the suit in favour of the arbitration in such a case. Reliance was also placed on the Case of Phoenix v. Pope & ors. reported in 1974 (3) 1974/1 All England Report 512 and the case of Ballavdas Acharyya v. Shyam Sundar Halwasiya reported in ILR 1946(1) Cal. 203 in support of his above contention. 11. Strong reliance was also made by Mr. Bhabra on an unreported judgment on the Appellate Side of this Court. when the matter was set down for further hearing by me to Appeal From Original Order No. 50 of 1951 where G.N. Das and the Debabrata Mookerjee, JJ held that the Arbitrator would go into the question of dissolution of partnership. 12. I am merely noting the cases briefly and not discussing them in any detail for the simple reason that this application, in my view should fail on another ground. Mr. Somnath Chatterjee sought to distinguish the Supreme Court case cited by Mr. Bhabra on the ground that the arbitration clause in that case was wider in tile sense that it included dispute arising after the dissolution of a partnership. On the other hand Masud, J in that judgment referred to above c1eatly held that the dissolution by Court under S 44(2) (f) & (g) of the Arbitration Act should not be left to the arbitrator. Mr. Chatterjee also drew my attention to the marginal note of S. 44 of the Partnership Act, 1932 Which speaks of dissolution by Court. According to Mr. Chatterjee, this contemplates that the jurisdiction vests in the Court alone. 13.
Mr. Chatterjee also drew my attention to the marginal note of S. 44 of the Partnership Act, 1932 Which speaks of dissolution by Court. According to Mr. Chatterjee, this contemplates that the jurisdiction vests in the Court alone. 13. Be that as it may, as I have said, I am not inclined to express any opinion on this aspect of the question for the purpose of the present application. This is be-cause it is well settled and it was not disputed that in granting stay in S. 34 or refusing it the Court has a discretion in the matter. In the facts of the instant case, the order of reference has already been made under S.20 of the Act on the 11th September, 1978. It was not disputed by Mr. Somnath Chatterjee who appears for the respondents that all the disputes upto that date between the parties including all question of accounts would be decided by the arbitrator by virtue of that order. 14. Admittedly the notice of dissolution which is dated the 17th October, 1978 is a post-reference notice. That being so, whether the partnership stood dissolved by service of that notice would be a dispute arising after the order of reference. Similarly the question whether it is to be dissolved by an order as contemplated by S. 44(f) & (g) of the Partnership Act is also a post-reference dispute. In my view, this post-reference dispute cannot be referred to the arbitrator except by a fresh submission of this dispute which requires the agreement of parties. Mr. Somnath Chatterjee strongly contended that by filing the Instant suit his client has opted for not referring the dispute to arbitration. That being so, I do not see how this post-reference dispute can be brought within the ambit of the arbitrator’s jurisdiction except by a fresh reference. No authority was shown by Mr. Bhabra which has taken a contrary view. This consideration alone in my view, should disincline the Court to grant a stay in its discretion. 15. There is one last aspect of the matter which may be dealt with. Frankly speaking I do not see what prejudice Mr. Bhabra's clients would suffer by going to trial on the limited question as to whether the firm has stood dissolved by reason of this notice or alternatively it should be dissolved by a decree of Court.
15. There is one last aspect of the matter which may be dealt with. Frankly speaking I do not see what prejudice Mr. Bhabra's clients would suffer by going to trial on the limited question as to whether the firm has stood dissolved by reason of this notice or alternatively it should be dissolved by a decree of Court. Admittedly all the disputes and differences including those relating to accounts and other irregularities have gone to arbitration for the period upto 11th September, 1978. If the partnership stood dissolved by service of the notice or by decree of Court the question of accounting would clearly for a very limited period. In any event no partnership business has been carried on after the service of this notice. In my view, the applicant suffers no real prejudice by reason or this very limited enquiry by the Court in the pending suit. 16. For these two reasons given above on the exercise of my discretion I refuse to stay the suit under S. 34 of the Arbitration Act. 17. In the result this application fails and is dismissed. Considering the facts of this case, there will be no order as to costs. Application dismissed.