TaxTMI 
TaxTMI 
2000 (4) TMI 758
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....s, zarda and allied products. It has three registered trade marks, (i) Surya Chhap Zarda, (ii) Surya Chhap Tobacco and (iii) Pan Chhap 12 Number Zarda. Disputes having arisen relating to the business of the partnership firm, an 'Agreement of Mutual Understanding' was executed by stating that all the said trade marks owned by the firm were to cease to be of one ownership but had to be owned by all the partners thereof. The respondent No. 1 and other partners were to use the said trade marks separately only in the territories allotted to them thereunder as per agreement with each of the partners having a percentage in the share of profits and losses under the then existing deed of partnership dated 21-4-1986. On 1-8-1987 a Deed of Retirement was executed by all the partners of the firm providing for retirement of respondent No. 1 as partner thereof on certain terms and conditions. On 28-7-1989 a suit was filed by respondent No. 1 in Civil Suit No. 186 of 1989 in the court of the Civil Judge, Senior Division, Chalisgaon, for a declaration that the retirement deed dated 1-8-1987 was ineffective, inoperative, unenforceable, null and void and that he continued to be the partner of the fi....
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....tively be referred to the sole arbitrator of Shri D.M. Rege, Retired Judge Bombay High Court. The arbitrator will file the award in the Bombay High Court in accordance with the provisions of the Arbitration Act." 3. Thus the disputes between the parties which arose in the suit stood referred to sole arbitration of Justice D.M. Rege. Claims were preferred before the sole arbitrator by all parties. The arbitrator made an award on 25-1-1999. He declared that the writing/agreement dated 3-7-1987 and retirement deed dated 1-8-1987 is invalid, void, ineffective and not binding on the parties and created no rights or obligations between the parties thereto. He further declared that respondent No.1 had not retired under the aforesaid deed but continued as a partner of the firm V.H. Patel and Company from and after 1-8-1987. This relief was, however, to operate in favour of respondent No. 1 only on his paying a sum of Rs. 5,17,927.17 to the firm and it was also declared that the three registered trade marks continued to be the assets of the firm V.H. Patel & Company and H.H. Patel & Company or its partners including Hirubhai Himabhai Patel or any other person has no right, title and inte....
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....Court that is in challenge before us. 4. The learned counsel for the petitioners Shri T.R. Andhyarujina and Shri Vinod A. Bobde, the learned senior advocates, submitted that the principle question is whether the arbitrator was competent to entertain the counter-claim filed by the respondent No. 1 for dissolution of the firm V.H. Patel & Company and falls within the scope of the terms of reference made by this Court on 15-2-1991, that the counter-claim made by the respondent for dissolution of the firm was not within the terms of reference either expressly or impliedly and the parties did not refer the disputes relating to the firm to the arbitrator, that on the contrary, para 2 of the Consent Terms, which is extracted above, referred to the arbitrator specific disputes relating to the rights and obligations of the parties, (i) arising out of the agreement dated 3-7-1987, (ii) retirement deed dated 1-8-1987, (iii) to the user of the trade marks in question, and (iv) to the determination of the rights of respondent No. 1 as a partner of the firm as per the pleadings of the parties in the pending suits that the pleadings of the parties in the suits did not include any claim by any ....
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....lude the question whether the partnership should be dissolved, the Court in its discretion may not stay a suit for dissolution, if dissolution is sought under section 44(g)( e). In the undermentioned cases the view taken is that whenever dissolution of partnership is sought under section 44(g), then it is for the court to decide, whether it would be just and equitable to dissolve the partnership or not and such a matter cannot be left to be gone into and decided by the arbitrator in pursuance of the arbitration clause contained in the partnership deed." 5. In that view of the matter it is submitted that the parties could not have intended to have referred a claim for dissolution of the partnership under the inherent powers of the court and an intention to act consistently within the law and practice relating to arbitration should be attributed to the parties when they entered into the consent order before this Court. 6. Shri R.F. Nariman and Shri V.A. Mohta, the learned senior advocates for the respondents, submitted that an appeal to the Division Bench of the High Court would lie from the judgment of the learned Single Judge and a special leave petition should not be enterta....
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....hat relief in the civil suit and as the civil suit was withdrawn pursuant to the agreement reached before this Court, such a prayer is, therefore, made before the arbitrator as all the disputes between the parties in the suits filed by the parties were referred to the arbitrator. The High Court placed strong reliance upon the decision of this Court in Orissa Mining Corpn. Ltd.'s case (supra). Distinction is sought to be made between the aforesaid case and the present case on the basis that the reference was made of all the disputes between the parties, a counter-claim in the written statement could arise only after the order of reference and in those circumstances, the reference would cover all disputes between the parties, including one raised in the counter-claim. In answer to this aspect it is noticed that the first respondent filed a suit as a partner of the firm V.H. Patel & Company for enforcing some of his rights as a partner and seeking dissolution of the firm is also a right of a partner and had the suit remained pending, it was possible for him to amend his plaint seeking an order for dissolution of the firm, the cause of action for seeking such relief would be the same o....
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....olution of the partnership and when that was not possible by mutual consent a dispute could certainly arise thereto and such a dispute could have been referred to arbitration as provided in clause 11 of the Partnership Deed. If that was permissible, such a contention could be raised in the suit filed by the parties. Merely because the disputes between the parties have been referred to arbitration, he is not prevented from raising such a question or the arbitrator is prevented from deciding such a matter. Therefore, agreeing with the view expressed by the High Court, we reject the contention raised on behalf of the petitioner that it was not permissible for the arbitrator to enter upon the question of dissolution of the partnership. Though the disputes between the parties originated on the basis whether one or the other partner had not retired from partnership or as to the rights arising in relation to trade marks or otherwise, still when there is no mutual trust between the parties and the relationship became so strained that it is impossible to carry on the business as partners, it was certainly open to them to claim dissolution and such a question could be adjudicated. The scope ....