Research › Search › Judgment

Orissa High Court · body

2007 DIGILAW 633 (ORI)

Bijaya Laxmi Nayak v. Bhata Kishore Dalai

2007-08-17

L.MOHAPATRA

body2007
JUDGMENT L. MOHAPATRA, J. : This appeal under Section 39 of the Arbitration Act, 1940 is directed against the order dated 31.3.1997 passed by the learned Civil Judge (Senior Division), Jeypore in O.S. No.47 of 1995 dismissing the application filed under Section 20 of the Indian Arbitration Act, 1940. 2. The case of the appellant is that both the appellant and respondent are partners of a firm and were jointly looking after the business in Upper Kolab Dam Project, Bodaparia near Borigumma. As per the partnership agreement, the profit and loss of the said partnership business would be distributed among them at the ratio of 60% and 40%. The work was completed on 19.10.1994. The appellant being a lady, the work was being looked after by her father and husband according to their convenience. After completion of the work, the partnership stood dissolved due to non-finalization of the Final Bill. Though the appellant asked the respondent to render the accounts, he failed to do so. Out of the profits of the partnership business, a truck, a car and a motorcycle were purchased. On 1.1.1994, the respondent issued a cheque for Rs.50,000/- in favour of the appellant but the same could not be encashed due to insufficiency of funds. Whenever a request was made by the appellant to pay the amount, the respond¬ent promised to pay the amount but never paid. The respondent having failed to pay the money due to the appellant in spite of several requests, the agreement containing the Arbitration Clause was invoked. Notice was issued to the respondent but the same re¬turned un-served. However, on 16.7.1995, the respondent gave in writing that he would pay the share of the appellant within fifteen days but again failed to make payment. When the appellant came to know that the respondent has raised a running bill till 2.3.1995 but did not pay a single paisa to her, she demanded her share 40% out of the profits, but the same having not been paid, an application under Section 20 of the Arbitration Clause, 1940 was filed before the learned Civil Judge (Senior Division), Bhubaneswar. 3. The case of the respondent is that though there was a partnership agreement, the appellant had neither come to the worksite at any point of time nor sent any agent on her behalf to look after the work. 3. The case of the respondent is that though there was a partnership agreement, the appellant had neither come to the worksite at any point of time nor sent any agent on her behalf to look after the work. The appellant had not paid Rs.2,00,000/- as alleged by her nor was there any understanding that either her father or her husband would look after the work. On completion of the work, the accounts of the parties were prepared upto 6.10.1993 and in course of execution of the work, the partnership was dissolved after settlement of accounts of the appellant. In terms of such settlement, the appellant was paid Rs.1,86,831/- on 24.1.1994 towards full and final settlement of her claim. The parties to the partnership firm also signed and acknowledged the same on 24.1.1994 by executing an agreement. The further case of the respondent is that accounts having been fully and finally settled, the partnership having been dissolved and the appellant having been paid her share, there was no further dispute to be adjudicated by an Arbitrator. 4. On the pleadings of the parties, the learned Civil Judge framed nine issues and held that the parties had dissolved their partnership after full and final settlement of the ac¬counts. The Court further held that had the partnership business not been dissolved, the question would be something else and the partnership having been dissolved and the accounts having been settled finally, there is no dispute for referring the case to the Arbitrator for adjudication. With the above findings, the petitioner under Section 20 of the Indian Arbitration Act, 1940 was dismissed. 5. Shri Manoj Mishra, the learned counsel appearing for the appellant challenges the impugned order on the ground that there was no full and final settlement of the accounts and the appellant had not been paid her share. It was further contended that even if, for the sake of argument it is accepted that the partnership had been dissolved and accounts had been settled, the very fact the appellant disputed the same is a dispute to be referred to the Arbitrator for adjudication. It was further contended that even if, for the sake of argument it is accepted that the partnership had been dissolved and accounts had been settled, the very fact the appellant disputed the same is a dispute to be referred to the Arbitrator for adjudication. The learned counsel also referring to Ext.5 submitted that even after dissolution of the partnership firm, the respondent in the letter under Ext.5 had admitted that the appellant had not been paid her share and promised to pay the same within a period of fifteen days from the date of writing of the said letter. With reference to the afore¬said document, the learned counsel further submitted that the dispute still exists with regard to finalization of the accounts and, therefore, the learned Civil Judge could not have dismissed the application filed under Section 20 of the Arbitration Act, 1940. 6. Shri R. K. Rath, the learned Senior Counsel appearing for the respondent submitted that in course of execution of the work, the partnership firm was dissolved. Thereafter, the accounts were settled and the appellant was paid a sum of Rs.1,86/831/- towards full and final settlement of her claim and the same was acknowledged by way of an agreement on 24.1.1994. Once the accounts were settled, the partnership was dissolved, the amount due to the appellant was paid and the agreement dated 24.1.1994 was executed between the parties acknowledging the full and final settlement of the accounts, there was no dispute pend¬ing for reference to the Arbitrator for adjudication. It was further contended that the agreement dated 24.1.1994 was disputed by the appellant and the trial Court sent the document for exami¬nation by a hand writing expert. On consideration of the opinion of the handwriting expert, the trial Court found that the said document had in fact been executed by the parties. Once the trial Court came to such finding, it is obvious that the accounts had been settled between the parties and the appellant had received her share. The Court having decided this point against the appel¬lant, the very same question cannot be again raised before the Arbitrator for adjudication. 7. Once the trial Court came to such finding, it is obvious that the accounts had been settled between the parties and the appellant had received her share. The Court having decided this point against the appel¬lant, the very same question cannot be again raised before the Arbitrator for adjudication. 7. So far as Ext.5 is concerned, it was contended by the learned counsel for the respondent that while the parties were working together under the partnership firm, the letter pad of the partnership had been kept blank for use having been signed by the respondent and one such paper has been used for manufacturing of Ext.5. On the above submission, it was contended by the learned counsel that the learned Civil Judge was justified in rejecting the petition. 8. There is no dispute at the bar that the partnership had been dissolved much prior to parties approached the Court. The only dispute is as to whether there had been full and final settlement of the accounts between the parties and appellant had been paid her share. Ext.A is the document, which can decide the dispute as to whether the appellant had been paid her share or not. Ext.A is the document executed between the appellant and the respondent on 24.4.1991. From the recitals of Ext.A, it appears that the appellant withdrew herself from the work and received a sum of Rs.1,86,831/- towards full and final settlement of the accounts. The appellant in course of the proceeding before the trial Court disputed her signature appearing in the document. Having disowned her signature appearing in the document in Ext.A she also prayed for sending the same to a handwriting expert for opinion. Her admitted signature contained in the books of ac¬counts Ext.2 along with Ext.A were sent to the handwriting expert for opinion. The handwriting expert opined that the admitted signature appearing in Ext.2 tallies with the signature of the appellant appearing in Ext.A. In view of the above, the conten¬tion of the learned counsel appearing for the appellant that the appellant had not signed the agreement in Ext.A cannot be accept¬ed. Apart from the above, D.Ws.2 and 3 have proved the execution of Ext.A by the appellant and, therefore the evidence of the aforesaid two witnesses coupled with the opinion of the handwrit¬ing expert clearly establish that the agreement Ext.A had been executed between the parties to the proceeding. Apart from the above, D.Ws.2 and 3 have proved the execution of Ext.A by the appellant and, therefore the evidence of the aforesaid two witnesses coupled with the opinion of the handwrit¬ing expert clearly establish that the agreement Ext.A had been executed between the parties to the proceeding. Once this docu¬ment is accepted by the Court, the only conclusion that can be arrived at is that towards full and final settlement of the ac¬counts the appellant had received her share of Rs.1,86,831/-. Therefore, the partnership having been dissolved, the appellant having received her share after full and final settlement of the accounts and she having acknowledged the same under Ext.A, no dispute remains to be adjudicated by the Arbitrator. I therefore do not find any infirmity in the finding of the learned trial Court that there was no dispute pending between the parties for adjudication by the Arbitrator. 9. Much reliance was placed by the learned counsel for the appellant on Ext.5, a document purported to have been executed by the respondent admitting some payment due to the appellant. The said document is in the writing pad of the respondent. The said document was also executed on 16.7.1995 and two witnesses have signed on the said document.Once the appellant had received her share after full and final settlement of the accounts and ac¬knowledged the same under Ext.A, there was hardly any scope for the respondent to execute the Ext.5 almost one year after Ext.A was executed. Moreover, neither of the two witnesses, who are supposed to have signed the documents, has been examined. On perusal of the documents, it also appears that the contents are in blue ink whereas the signature of the respondent is in black ink. If the respondent had executed the document, there would be no reason for him to use two pens for the purpose of executing the document. Under the circumstances, I also agree with the view of the learned Civil Judge that reliance cannot be placed on such a document. Moreover, much prior to execution of the said docu¬ment, the partnership had been dissolved and the accounts had been fully and finally settled. Therefore, the document can at best be considered as a fresh agreement, which does not contain an Arbitration Clause. Moreover, much prior to execution of the said docu¬ment, the partnership had been dissolved and the accounts had been fully and finally settled. Therefore, the document can at best be considered as a fresh agreement, which does not contain an Arbitration Clause. Therefore, on the basis of such a docu¬ment, an application under Section 20 of the Arbitration Act, 1940 also could not be maintained in absence of an Arbitration Clause therein. 10. The learned counsel appearing for the appellant cited some decisions, which lay down more or less same principle of law and, therefore reference is made to only one case reported in 1982, 1 S.C.C., 625 (M/s. Bharat Heavy Electrical Limited, Rani¬pur v. M/s. Amar Nath Bhan Prakash). Relying on the above deci¬sion and the other decisions cited by the learned counsel, it was contended that whether there was discharge of the contract by accord and satisfaction or not, is a dispute arising out of the contract and is to be referred to arbitration.In the said case, the Supreme Court on facts held that the dispute being with regard to discharge of contract by accord and satisfaction or not, the same should have been referred to arbitration under Section 20 of the Arbitration Act, 1940. The learned Senior Counsel Shri Rath, appearing for the respondent relied on a decision of the Apex Court in the case of Nathani Steels Ltd. v. Associated Constructions reported in 1995 Supp(3) S.C.C. 324 and it was submitted that once the dispute was amicably settled, so long as the settlement has not been set aside by a competent Court of law, the Arbitration Clause cannot be invoked. This is a case where Ext.A is the document under which the appellant has expressed her full satisfaction with regard to recession of the contract by receiving the amount as stated earlier. In course of hearing of the proceeding before the trial Court, she disputed her signature appearing in the said document and also prayed for getting the signature examined by an expert. In course of hearing of the proceeding before the trial Court, she disputed her signature appearing in the said document and also prayed for getting the signature examined by an expert. The Court allowed the application and got her signature examined by an expert and on the basis of the opinion of the expert held that the appellant had signed the document.Since the appellant had expressed in the said document that she had received money towards full and final settlement of the amount, the only option left to her was to get the settlement set aside by a competent Court of law. The part¬nership having been dissolved and the appellant having received her share towards full and final settlement of the accounts between the parties, the agreement came to an end and, therefore the appellant could not have invoked the Arbitration Clause for the purpose of filing the application under Section 20 of the Arbitration Act, 1940. 11. I, therefore do not find any merit in the appeal and accordingly the same is dismissed. Appeal dismissed.