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2009 DIGILAW 539 (AP)

Ramakrishna Ahuja v. Tejprakash Maheswari

2009-08-06

L.NARASIMHA REDDY

body2009
Common Judgment: These two appeals are directed against the judgment and decree in O.S.No.2092 of 1997. The deceased-first appellant in CMA No.961 of 2006 filed O.S.No.2092 of 1997 in the Court of IX-Additional Senior Civil Judge, (FTC) City Civil Court, Hyderabad, against the first respondent in the appeals for the relief of dissolution of a partnership firm by name M/s Nath Peters Pharmaceuticals Company; for rendition of accounts and a final decree after the settlement of accounts determining the shares of profits etc. During the pendency of the suit, he died and appellants 2 to 6 in CMA No.961 of 2006 and sole appellant in CMA No.995 of 2006 were brought on record as his legal representatives. Sri Tejprakash Maheswari, who is the first respondent (for short “the respondent”) in both the appeals, is the sole defendant in the suit. The necessary facts that gave rise to the constitution of the firm and the nature of the disputes were pleaded. The respondent filed a written statement. He has also taken a plea that there exists a clause in the partnership deed, namely; clause (7), which provides for resolution of the disputes through arbitration and that in that view of the matter, the suit is not maintainable. The trial Court framed necessary issues and conducted a detailed trial. Through the judgment and decree under appeal, the trial Court returned the plaint under Order VII Rule 10, observing that it has no jurisdiction to decide the matter and left it open to the appellants to approach the concerned forum for arbitration. The said decree is challenged in these appeals. Sri D.Seshadri Naidu and Sri R.Kesava Rao, learned counsel for the appellants in both the appeals, submit that apart from raising a plea in the written statement, the respondent filed I.A.No.556 of 1998, which was renumbered as I.A.No.581 of 2004, for return of the plaint under Section 8 of the Arbitration and Conciliation Act, 1996 (for short “the Act”) by pleading that there exists an arbitration clause, and through a detailed order, the trial Court dismissed the same on 16.02.2005. The learned counsel submit that CRP No.1398 of 2005 filed against the same was dismissed by this Court. The learned counsel submit that CRP No.1398 of 2005 filed against the same was dismissed by this Court. Learned counsel submit that the purport of clause (7) is very limited, in the sense that the arbitration is provided only as regards the interpretation of the contents of the partnership deed-Ex.A4 and by no stretch of imagination, it covers the disputes in relation to the functioning of the partnership firm. They submit that the trial Court ought to have decided the matter on merits since there is voluminous oral and documentary evidence on record. Sri P.Veera Reddy, learned counsel for the respondent, on the other hand, submits that the arbitration clause contained in Ex.A4 is wide enough and it would take in its fold, every dispute that arises among the partners. He submits that the trial Court has taken the correct view of the matter and the parties can even now resort to the mechanism of the arbitration. Initially, the trial Court framed the following three issues for its consideration. (1) “Whether the plaintiff is entitled for a preliminary decree for dissolution of the partnership firm by name Nath Peters Pharmaceutical Company as prayed for? (2) Whether the plaintiff is entitled for the relief of settlement of accounts and share as claimed? (3) To what relief?” It has already been pointed out that the respondent filed I.A under Section 8 of the Act taking the plea that the suit cannot be maintained in view of clause (7) of Ex.A4 and the trial Court dismissed the said I.A. Thereupon, the respondent filed CRP No.1398 of 2005. Even while upholding the order passed in the I.A., this Court directed that the trial Court should frame an issue as to the maintainability of the suit in view of the arbitration clause. On the basis of this direction, the trial Court framed the following additional issue. “Whether the suit is maintainable as per Section 8 of the Arbitration and Conciliation Act 1996 or not?” On behalf of the appellants, P.W.1 deposed as a witness. They filed Exs.A1 to A23. The respondent, on the other hand, examined D.Ws.1 to 10. He filed Exs.B1 to B23. On the basis of the discussion undertaken by it, the trial Court answered Issue No.3 in favour of the respondent and directed return of the plaint. They filed Exs.A1 to A23. The respondent, on the other hand, examined D.Ws.1 to 10. He filed Exs.B1 to B23. On the basis of the discussion undertaken by it, the trial Court answered Issue No.3 in favour of the respondent and directed return of the plaint. Once the trial Court took the view that the plaint deserves to be returned, it ought not to have touched issues 1 and 2. However, it answered those issues against the appellants. Before undertaking the discussion, on merits, this Court intends to express its dissatisfaction about the manner in which the trial Court rendered the judgment in the suit. It is verbose, repetitive and not at all up to the point. One only finds the fascination of the learned Presiding Officer for peculiar expressions such as ‘a contriaric sense’. When the Court was deciding an issue relating to the maintainability of the suit, the discussion ought to have been focused on it, and the discussion, on merits, on appreciation of evidence touching various aspects ought to have been taken up if only it was found that the suit was maintainable. When it has taken the view that the suit is not maintainable, in view of the embargo contained under Section 8 of the Act, and decided to return the plaint, there was absolutely no necessity to undertake an elaborate discussion much less to render a decision running into 60 to 61 typed pages. The only point that arises for consideration is as to whether clause (7) of Ex.A4 would have the effect of barring a suit under Section 8 of the Act. Ex.A4 is the partnership deed dated 27.03.1972. There are only two partners, namely; Tej Prakash Maheshwari and Ramakrishna Ahuja. They are entitled to 50% share each. Clauses (6) and (7) of the partnership deed are important and they read as under. (6) That the duration of this partnership is at will primarily. Any change in these presents would be done with mutual understanding of the partners and shall be intimated to all the departments where it is necessary about such changes. (7) That in case of dispute regarding the content of this deed between the partners each shall appoint one arbitrator of their choice and the decision between such arbitrators would be final one and shall bind both the partners and their heirs, representatives. (7) That in case of dispute regarding the content of this deed between the partners each shall appoint one arbitrator of their choice and the decision between such arbitrators would be final one and shall bind both the partners and their heirs, representatives. Clause (6) makes it clear that the partnership is at will primarily. Clause (7) thus provides for arbitration in the manner stipulated in it. However that facility is restricted only as regards “dispute regarding the content”. There is absolutely no ambiguity as regards the purport of this clause. The content of Ex.A4 deals with the constitution and the method of sharing. The clause does not at all take in its fold the disputes that arise during the course of the functioning of the firm or the business activity. It hardly needs any mention that the jurisdiction of a civil Court is almost universal in nature and any clause, which has the effect of taking away the same, must be construed strictly. If any doubt exists as to the purport of the clause, it must be read in such a way as to sustain the jurisdiction of the civil Court. When in clear and unambiguous terms the clause provides for arbitration, only as regards the disputes in relation to the contents of Ex.A4, it cannot be said that the matter in relation to the dissolution of the firm would constitute the subject matter of such arbitration. Unfortunately, the trial Court did not evince the required amount of interest on this aspect. The parties have already gone to trial spread over for a period of ten years. In the name of providing speedy remedy, that too when the clause itself does not permit, the trial Court cannot bring the entire controversy back to square one, leaving the parties at lurch. Therefore, the appeals are allowed and the judgment and decree of the trial Court are set aside. It is directed that the trial Court shall proceed to decide the matter, on merits, on the basis of the evidence on record. Opportunity shall be given to the parties to adduce evidence, if any, within a period not exceeding six (6) weeks from the date of receipt of a copy of this judgment, and the suit itself shall be decided by the end of December, 2009. Opportunity shall be given to the parties to adduce evidence, if any, within a period not exceeding six (6) weeks from the date of receipt of a copy of this judgment, and the suit itself shall be decided by the end of December, 2009. None of the observations made in the judgment under appeal, on merits, shall be treated as final and the trial Court shall adjudicate the matter afresh. There shall be no order as to costs.