AI Drafter 
TaxTMI 
TaxTMI 
2001 (10) TMI 1136
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....e) and his wife Smt. Ashok Kumari and in a family settlement arrived at thereafter, the entire land and building admeasuring 5354 sq. yds. (4478 sq. meters) of the Tourist Hotel as such fell to the share of the son Shri Vijay Krishna Yadav. Thereafter, he made a notional division of the property into three shares measuring 1184 sq. meters, 1587 sq. meters and 1707 sq. meters in favour of himself, his wife Smt. Sudha Yadav and son Prashant Yadav. On 31.1.87, a partnership by name M/s Sumeru Enterprises was entered into between Shri Yadav, his wife, M/s Padmini Enterprises Private Ltd. and one Smt. Kalpana Kothari, besides admitting the minor Prashant Yadav to the benefits of partnership, with share in profits at 11%, 12%, 32.5%, 32.5% and 12% with shares in losses at 14%, 15%, 35.5%, 35.5% and nil respectively among them. The property of the Tourist Hotel was brought into as the stock of the Firm and valuing the same at 61% the respective shares was credited into the Capital Account of the Firm as Rs.17,00,000/-, Rs.22,00,000/- and Rs.22,00,000/- respectively in the names of Shri Yadav, his wife Smt. Sudha Yadav and their minor son Prashant Yadav. The rest of the capital was said to....
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....s per direction in the Will and Letters of Administration), of Smt. Yadav at Rs.20,03,432/- and of Master Prashant Yadav at Rs.10,03,432 (in all Rs.40,21,067/- from the funds of the Firm). After all these, a sum of Rs.6,82,650.52 (Rs.3,41,325.26 each) was said to be lying to the credit of Smt. Yadav and Master Prashant Yadav in the accounts of the Firm. The further claim of the appellants seems to be that on effecting sales of some of the apartments, the profits earned were also distributed among the partners by proper credit entries of Rs.5,96,829.30 each in favour of Smt. Yadav and Prashant Yadav and Rs.11,08,397.28 each in favour of Smt. Kalpana Kothari and M/s Padmini Enterprises Pvt. Ltd. It is also claimed that till October 1995, a total number of 173 offices and shops came to be disposed of and of which possession in respect of 154 were also said to have been delivered to the buyers and several crores of rupees were ploughed into for executing the construction works. Misunderstanding seems to have surfaced among parties resulting in the issue of a notice dated 1.2.95 by Smt. Yadav making serious allegations of malpractices and irregularities against others in the Firm fol....
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....d majority on 21.9.97. But, subsequently in about two months time the very same defendants (respondents 1 & 2 before High Court) filed an application on 26.10.99 under Section 8 (1) of the Arbitration and Conciliation Act, 1996, with a prayer that the proceedings before the Trial Court be stayed without prejudice to the rights under Section 8(3) of 1996 Act, till the commencement/continuation of the arbitration proceedings and making of the Arbitrators award. A learned Single Judge of the Rajasthan High Court at Jaipur by the order dated 18.1.2000, under challenge in these appeals, set aside the orders of the Trial Court dated 6.2.96, and held as follows: a) The balance of convenience is in favour of appointment of a Receiver for preserving as well as managing the property to save it from any anticipated loss till the decision of the suit; b) that having got the application earlier filed before the trial court under Section 34 of the Arbitration Act, 1940 which was in force at the time of filing of the suit dismissed as withdrawn, it is not permissible to invoke the powers under Section 8 of the Arbitration and Conciliation Act, 1996 to obtain the relief of stay of further pr....
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....t against any other party to such agreement, in derogation of the arbitration clause and attempts for settlement of disputes otherwise than in accordance with the arbitration clause by substantiating the existence of an arbitration clause and the judicial authority concerned may stay such proceedings on being satisfied that there is no sufficient reason as to why the matter should not be referred to for decision in accordance with the arbitration agreement, and that the applicant seeking for stay was at the time when the proceedings were commenced and still remained ready and willing to do all things necessary to the proper conduct of the arbitration. This provision under the 1940 Act had nothing to do with actual reference to the arbitration of the disputes and that was left to be taken care of under Sections 8 and 20 of the 1940 Act. In striking contrast to the said scheme underlying the provisions of the 1940 Act, in the new 1996 Act, there is no provision corresponding to Section 34 of the old Act and Section 8 of the 1996 Act mandates that the Judicial Authority before which an action has been brought in respect of a matter, which is the subject-matter of an arbitration agreem....