JUDGMENT
J.B. Goel, J.
1. This is a petition under Section 8 of the Arbitration Act, 1940 for appointment of Arbitrator for adjudication of the disputes arising between the parties in respect of the business carried on by them in partnership under the name and style of M/s. Shree Mahalaxmi Engineering Works at 27, D.L.F. industrial Area, Najafgarh Road, New Delhi. The petitioner and the there respondents are brothers. The parties had entered into a deed of partnership dated 12-2-1958 and have been carrying on the business in partnership; it is alleged that respondents No. I and 2 had been maintaining the accounts of the partnership and the books of accounts of the partnership are in their possession and inspite of repeated requests and demand of the petitioner they have neither rendered any accounts of the partnership business to him nor have paid the share of profits since 1973-74, and are not allowing the petitioner to see the books of accounts and to take part in the working of the firm. The partnership agreement between the parties contains arbitration clause whereby it was agreed that their father Shri Wazir Chand Bhasin or his nominee shall be Sole Arbitrator in case of any dispute between the parties. However, their father had died and thereafter the parties had mutually appointed Shri J. N. Sehgal as Arbitrator and the disputes were also referred to him in October, 1976, but the said Arbitrator has not proceeded to adjudicate upon the matter. The petitioner has thus desired that the disputes as mentioned in the petition have arisen and another Arbitrator may be appointed.
2. Only respondents Nos. 1 and 2 have filed the reply. They have admitted that the parties have been carrying on business since 12-2-1958. However, other allegations have been denied. It is alleged that the partnership was dissolved by means of a deed of dissolution dated 5-1-1977 whereby petitioner and respondent No. 3 have retired from the partnership and now respondents No. 1 and 2 have been carrying on business in partnership under a new partnership deed dated 22-1-1977. On dissolution of the firm, it was agreed between the parties that respondents No. 1 and 2 each will pay Rs. 25,000 each and respondent No. 3 will pay Rs. 15,000 i.e. in all Rs. 65,000 to the petitioner as his share of the partnership assets; 50% of the share was payable by 28th January, 1977, 50% in two instalments on 28th February, 1977 and 28th March, 1977. In pursuance of this the respondents No. 1 and 2 had taken two Bank drafts of Rs. 12,500 each on 25-1-1977 as first instalment. The petitioner was asked to collect these drafts which he did not do inspite of registered letter dated 15-2-1977. Respondent No. 3 had also remitted his share of Rs. 15,000 to the petitioner. This amount of Rs. 50,000 was paid by the respondents No. 1 and 2 to the petitioner on 26-8-1980 in terms of the dissolution deed dated 5-1-1977. Thus the partnership has been dissolved and accounts settled mutually and no dispute remained outstanding. The petition is thus not maintainable. The petitioner had filed replication denying the same. During the pendency of the petition, the petitioner had died and his legal representatives his wife Smt. Neema Bhasin and two sons were substituted. Respondents No. 1 and 2 had amended their written statement taking the plea that later on also settlement had been arrived at the intervention of Shri Vikramajit Narryar, Advocate, a relation of the parties and in terms of the dissolution sum of Rs. 50,000 had been paid on 28-8-1980 to the petitioner. Another replication was filed by the legal representatives of the petitioner denying the averments. On the pleadings of the parties, the following four issues were framed on 6-5-1980.
(1) Whether the partnership amongst the parties was dissolved vide deed dated January 5, 1977 ?
(2) If issue No. 1 is found in the affirmative, is the instant petition maintainable ?
(3) Whether there are good grounds for change of Arbitrator appointed by the parties ?.
(4) Relief.
3. Later on I.A. No. 4107/90 was filed by the respondents No. 1 and 2 alleging that with the intervention of Shri Vikramajit Nayyar, a relation of the parties, a settlement had taken place and respondents No. 1 and 2 had paid Rs. 50,000 to the petitioner through Shri Vikramajit Nayyar. The receipt of this money was not disputed. However, the settlement was denied and the following additional issue was framed on this :
“Whether there was a settlement between the parties as alleged in the application ? If so, what is its effect ?
Both the parties were given opportunities to produce their evidence but no evidence was led and this issue was decided against the respondents No. 1 and 2 in the absence of evidence. The parties, however, went to trial on the other issues framed earlier. They produced documentary evidence and also led oral evidence. On behalf of the petitioner, Mrs. Neema Bhasin, wife of the deceased petitioner was examined whereas on behalf of respondents No. I and 2 five witnesses were examined. DW 1, Shri M. G. Khanna from State Bank of India, Najafgarh Branch proved letter dated 28-9-1977 (Ex DW 4/C) sent to them by Shri S. L. Bhasin respondent confirming dissolution of firm as per dissolution deed dated 5-1-1977. DW 2, Shri Bhim Singh from the office of Registrar of Firms proved that intimation of retirement of two partners was received and a new partnership firm consisting of respondents No. I and 2 was registered and proved Form ‘C’, Ex. DW 2/A. DW 3, Shri K. B. Jasuja, Chartered Accountant has deposed about the dissolution of the partnership firm and intimation of it being given to the Income-tax department in prescribed Forms 11 and 11-A. He has also proved an assessment order dated 24-2-1981, Ex. DW 3/1 in respect of assessment year 1978-79 where the fact of requirement of petitioner and respondent No. 3 has been accepted and the firm has been assessed in the names of respondents No. 1 and 2. He has also proved balance-sheet Ex. DW 3/2 prepared on the dissolution of the firm. DW-4 Shri Chaman Lal Bhasin is respondent No. 1 and DW-5, Shri Sudershan Khera, an employee of the firm has proved dissolution of firm, execution of dissolution deed and his signatures on photostat copy of dissolution deed Ex. DW 4/B as an attesting witness besides signatures of the other attesting witness Shri Yash Pal and of the four partners. He has also proved balance sheet Ex. DW 3/2 for the period 1-1-1977 to 6-1-1977 prepared on dissolution of the firm.
4. I have heard learned Counsel for the parties.
5 Learned Counsel for the petitioner has contended that the additional issue about settlement of the dispute having been decided against respondents, this proves that there has been no dissolution of the partnership and the partnership still continues and no finding on other issues is required. This is disputed by learned Counsel for the respondents No. 1 and 2 who has contended that was an additional issue and the other issues framed were not struck out and the parties have led evidence thereon. If the intention and effect of that finding was that the firm had not been dissolved then the question of parties going to the trial would not have arisen. That additional issue pertained to the controversy about settlement which had taken place later on in pursuance of dissolution of the firm earlier.
6. Whether the partnership was dissolved on 5-1-1977, issues had been framed and on those issues parties had proceeded for trial and led evidence without any objection or reservations. The additional issue was framed as a plea was taken later on that further settlement had taken place between the parties due to intervention of Shri Vikramajit Nayyar, a relation of the parties when the payment of Rs. 50,000 was made on 26-8-1980. Respondents No. 1 and 2 had never given up their claim that the firm had not been dissolved on 5-1-1977. The parties have gone to trial and led evidence after the additional issue was decided. The main controversy subsisted and did not come to an end on that additional issue being decided. The issues framed earlier on 6-5-1980 have thus to be decided on the basis of the evidence led by the parties. This contention of the petitioner thus has no force.
My findings issue wise are as under.
Issue No. 1 :
7. Respondent No. 1, Shri C. L. Bhasin appeared as DW-4 and he has disposed that their partnership was dissolved by dissolution deed dated 5-1-1977; that five copies of the dissolution deed were prepared simultaneously at one stroke; the original dissolution deed was on stamp paper of Rs. 10 and the other copies of dissolution deed were on stamp paper of Rs. 2 each; and these were taken away by his brother late Shri P. L. Bhasin and he was given photostat copy Ex. D 4/B, which bears his signatures as will as those of his three brothers. Notice Ex. DW 4/A-1 to produce the original dissolution deed was given to the Counsel for Shri P. L. Bhasin, which was acknowledged by DW-4/A-2. He has further deposed that dissolution deed was acted upon that after the dissolution of the firm a new firm came into existence under the same name and style, consisting of him and his younger brother Shri K. K. Bhasin as the partners, and intimation was given to the concerned Income Tax, Sales Tax authorities. Registrar of Firms and the Bank about the dissolution of the firm and the reconstitution thereof. As per dissolution deed the firm and its property situated at Chandigarh was given to Shri S. L. Bhasin and Shri P. L. Bhasin inter alia was to get Rs. 65,000 out of which Rs. 25,000 each was payable by him and Shri K. K. Bhasin and Rs. 15,000 by Shri S. L. Bhasin; that he got two Bank drafts of Rs. 12,500 each prepared as the first instalment of his share and that of his brother Shri K. K. Bhasin and these drafts were sent to Shri P. L. Bhasin but the same were returned back. Copies of the drafts are marked ‘M’ and ‘N’ later on he and Sh. K. K. Bhasin paid Rs. 50,000 to Shri P. L. Bhasin through two bank drafts of Rs. 8,000 and Rs. 42,000 at the instance of Shri Vikramajit Nayyar and both Bank drafts were encashed by Shri P. L. Bhasin. Shri S. L. Bhasin had also sent three cheques, one of Rs. 7,000 and two of Rs. 3,500 each. He has further deposed that bank operation was stopped at the instance of Shri P. L. Bhasin in the year 1977 and Shri S. L. Bhasin had written letter Ex. DW 4/A to the Bank and thereafter he and Shri K. K. Bhasin were allowed to operate the Bank account. In cross examination it was suggested that the original dissolution deed was sent to the arbitrator for obtaining the signatures of all the partners and that the dissolution deed was never executed which he has denied. He also denied that Ex. DW 4/B does not bear the signatures of Shri P. L. Bhasin. These suggestions denying his signature is wrong and false as in statement of Shri P. L. Bhasin recorded before issues he has admitted his signature though he had stated then that his signatures were obtained under undue influence and under influence of liquor. This latter plea has neither been taken in the pleading nor proved by evidence.
8. DW-5 Shri Sudershan Khera who is an employee of this firm since 1961 has deposed that the partnership formerly consisted of four partners, it was dissolved in the year 1977 through a dissolution deed and thereafter it consisted of only two partners, namely, Shri C. L. Bhasin and Shri K. K. Bhasin. He has proved the dissolution deed Ex. DW 4/A and has deposed that he and one Shri Yashpal, typist had signed it as attesting witnesses and all the four partners had also singed before them. He has further deposed that after dissolution of the firm necessary entries were made in the books of accounts and balance sheet Ex. DW 3/2 (copy) was drawn. DW 3 Shri K. B. Jasuja has been the Chartered Accountant of the firm. He has deposed that he has been counsel of this firm for income-tax purposes since 1957-58 and it consisted of four partners, the parties to the petition, that the firm was dissolved in the year 1977 and reconstituted with two partners Shri. C. L. Bhasin and K. K. Bhasin; he has been filing the returns of the partnership firm and also of all the partners and on dissolution he had filed Forms No. 11 and 11-A with the Income Tax authorities intimating about the reconstitution of the firm. He has also proved one assessment order Ex. DW 3/1, for 1978-79 whereby the firm is assessed in the names of only two partners and the factum of retirement of other two partners, i.e. petitioner and respondent No. 3 is also recorded. He has also deposed that balance sheet. Ex. DW 3/2 for 1-1-1977 to 5-1-1977 was prepared in terms of the dissolution deed and the account of Shri P. L. Bhasin was credited with a total sum of Rs. 50,000 as per the dissolution deed in full and final settlement of his claim, copy of the dissolution deed was also submitted by him to the Income-tax authorities. In cross-examination he has also stated that he had drafted the dissolution deed at the instance of all the four partners. Nothing was elicited from him to the contrary. DW 2 Shri Bhim Singh is from the office of the Registrar of Firms, Delhi and has deposed that the firm Shree Mahalaxmi Engineering Works was formerly registered in 1959 with the petitioner and the three respondents as its partners and subsequently there was a change in the number of partners in the year 1977 when two of the partners had retired. He has proved relevant statement (Form ‘C’) Ex. DW 2/A showing the names of respondent Nos. 1 and 2 as the existing partners of the firm.
9. Besides this oral testimoney, statement of the petitioner was also recorded before the issues were framed under Order 10, Rule 2, C.P.C. on 11-4-1980. In the statement he admitted that in January 1977 he was asked to sign stamp papers bearing stamps one of Rs. 10 and 2-3 papers of Rs. 2 in the presence of Shri J. N. Sehgal, their brother-in-law. He had first stated that dissolution deed was not signed by him but at the same time admitted that he had signed the dissolution deed under undue influence and under the influence of liquor. In the pleadings, the petitioner has not taken any such plea of undue influence or influence of liquor nor any effort was made to prove it. On behalf of the petitioner, his wife Smt. Neema Bhasin had appeared as PW-1. She could not prove that her husband had not executed the dissolution deed in question or the partnership was not dissolved. In the rejoinder as well as in her statement she has admitted that a sum of Rs. 50,000 was paid to her husband by respondents I and 2. Though according to her this was on account of share of her husband in the profits of the firm and as part payment.
10. The testimony of DW-4 who was been corroborated by DWs 2, 3 and 5, is reliable and it is proved that the firm was dissolved by means of dissolution deed dated 5-1-1977 which was duly executed by the four partners and the dissolution deed had been acted upon. Reconstitution of the firm has been entered in the records of the Income-Tax department. Registrar of Firms and in the Bank records which would not have been possible unless there was a dissolution of the firm. The dissolution deed provides that the accounts were gone into and its assets divided, respondent Nos. 1 and 2 had to pay Rs. 25,000 each besides a sum of Rs. 15,000 to be paid by respondent No. 3, Rs. 50,000 have admittedly been paid by respondent Nos. 1 and 2 to the petitioner. PW-I has not denied that respondent No. 3 had not paid his share of Rs. 15,000. The plea of the petitioner (PW-I) that the amount of Rs. 50,000 was paid respondents No. I and 2 on account as part payment of share of profit cannot be believed as had it been so this fact would have been brought on record in the proceedings. Except her self serving statement there is no other evidence to prove it. The evidence led by the respondents is reliable and trustworthy which remains unrebutted.
11. During arguments learned Counsel for the petitioner has pointed out that in his letter dated January 24, 1977 Ex. DW 4/D, Shri C. L. Bhasin (respondent No. 1) had asked Shri J. N. Sehgal to get the documents signed before 28th January, 1977 so that the payments of two drafts of Rs. 25,000 will be made to Shri P. L. Bhasin. The inference sought to be drawn is that the dissolution deed had not been signed till 24-1-1977. It appears that Shri J. N. Sehgal who was the brother-in-law of the parties had intervened and possibly with his efforts the settlement had been arrived at and the papers were signed. The petitioner as already noticed has admitted having signed the dissolution deed. From this it cannot be said definitely that the documents were signed before or after 24-1-1977. It could be that the documents had been signed by the petitioner but intimation was not received by respondent No. 1 when he had written this letter. The document after they were signed and executed will relate back from the date it was agreed by the parties to be effective. On the basis of the material on record, I do not find any reason to disbelieve the testimony of DW 4 and DW 5 that the partnership deed Ex. DW 4/A is the photocopy of the dissolution deed executed by the petitioner and the respondents and the original dissolution deed had remained in the possession of Shri P. L. Bhasin which has not been produced by him for obvious reasons. With the execution of dissolution, accounts were settled and assets divided mutually. Thus, the disputes stood settled as agreed in this dissolution deed. Issue No. I is, accordingly, decided in the affirmative and in favour of the respondents.
Issue No. 2 :
In view of finding on issue No. 1, the petition is not maintainable and this issue is decided accordingly.
Issue No. 3 :
In view of finding on issue Nos. I and 2, this issue not survive and is decided accordingly.
Issue No. 4 :
In view of these finding on issue Nos. 1, 2 and 3 above, this petition is frivolous, misconceived and is not maintainable.
The petition is, accordingly, hereby dismissed with costs. Lawyer’s fee assessed at Rs. 1,500.
12. Petition dismissed with costs.