F. I. Rebello, J.
1. There is admittedly a Deed of Partnership entered into between the plaintiff on the one hand and the defendant on the other, dated 1st April, 1997. Clause 11 of the said partnership deed reads as under :--
'The duration of the partnership shall be 'at Will' terminable by either of the partners giving three calendar month's notice in writing to the other partners. Death, Retirement, Insolvency or Insanity of any partner shall not dissolve the partnership.'
Clause 15 of the Deed of Partnership reads as under:--
'All disputes and differences arising between the partners or question in connection with the partnership or this Deed shall be referred to the arbitrators one to be appointed by each party or by his/her personal representative under the provisions of the Indian Arbitration Act, 1940 or any statutory modifications or re-enactment thereof for the time being in force.'
It is the case of the plaintiff that difference have arisen which are set out in the plaint and consequently a notice came to be issued on their behalf by their Advocates dated July 10, 2003. After setting out various facts in the notice, it is then set out as under :--
'Please note that the said partnership Finn of M/s Sagar Builders shall stand dissolved with effect from expiry of three calendar months from the receipt of this notice by you.'
The other aspects need not be adverted to. There is a reply to that notice on behalf of the defendants herein.
2. The suit thereafter came to be filed on 19th August, 2003. Some of the relevant prayer clauses in the suit are as under :--
(a) that this Honourable Court may be pleased to pleased to dissolve the suit partnership firm i.e. Sagar Builders with -immediate effect and/or with effect from such date as this Honourable Court deems fit;
(b) in the alternative to prayer (a), this Honourable Court may be pleased to declare that the suit partnership firm i.e. Sagar Builders stands dissolved in pursuance of plaintiff's Advocates Notice dated 10th July, 2003 with effect from such date as may be fixed by this Honourable Court.'
It is not necessary to advert to the other prayers. Suffice it to say that in support of the prayer Clause (a) in paragraph 8 of the plaint the averments are as under:--
'It is imminently just and equitable that the said firm should be dissolved and unless this Honourable Court intervenes.......'
This Motion thereafter was taken out on 2nd September, 2003 wherein various reliefs have been sought including appointment of Receiver as well as injunction.
The defendants have filed their reply and in paragraph 3 have raised the plea that the subject matter of the suit is covered by an Arbitration Clause. This Court, therefore, considering section 8 may direct parties to arbitration. The relevant averments in para 3 of the affidavit are that the Court be pleased to dismiss the above suit as per the provisions of section 8 of the Arbitration and Conciliation Act, 1996. It is averred that this should be treated as an application for invocation of the arbitral clause in arbitration agreement. The subject matter of the suit is covered by the arbitral agreement which is wide enough to include disputes as to dissolution. It is, therefore, prayed that the suit in view of the Arbitration Agreement between the parties be stayed or rejected.
On behalf of the plaintiff learned Counsel contended that he is not filing rejoinder, but proceeding on the basis of denial of the contentions raised.
3. On behalf of the plaintiffs it is argued by the learned Counsel that though the partnership is at Will and though the plaintiffs had served a notice for dissolution of the partnership that will come into effect after 3 months from the date of receipt of notice dated 10th July, 2003. It is in that context it is contended that they have prayed for dissolution of partnership on just and equitable grounds. The ground for just and equitable dissolution is a power conferred on the Court and not on the Arbitrator. In these circumstances it is contended that this Court retains jurisdiction to hear and decide the suit. For that purpose reliance was placed on the Judgment of Privy Council in the case of Rehamtunissa Begum and Ors. v. Price and Ors. AIR 1917 PC 116. Reference also made to the judgment in Olver v. Hillier (1959) 2 All E.R. 220.
On behalf of the defendants their learned Counsel contends that considering the clause in the partnership and the language thereof all disputes and differences arising from and out of the partnership can be decided by the Arbitrator. It is pointed out that this will also include the ground of dissolution on just and equitable ground, Reliance for that purpose is placed on the judgment in the case of V. H. Patel and Company and Ors. v. Hirubhai Himabhai Patel and Ors., : (2000)4SCC368 . It is contended that if the language of Section 44 of Partnership Act is considered it would be seen that there are other grounds where the Court may dissolve the partnership and which dissolution is not based on the partnership agreement. If the construction sought to be placed by the plaintiff is to be accepted then those cases covered by Clauses (a) to (f) of Section 44 also cannot be subject matter of reference to the Arbitrator, and it is the Court alone that could exercise jurisdiction to dissolve the partnership. It is pointed out that the Apex Court in V. H. Patel (supra) has held otherwise. The mere fact that the issue of Section 44(g) was not answered would not mean that the Arbitrator would have no jurisdiction in case dissolution is sought on just and equitable ground.
4. Having heard the learned Counsel the first question is whether the averments in the affidavit in reply by the defendants can be treated as an application under Section 8 of the Arbitration and Conciliation Act, 1996. Under Section 8 of the Arbitration and Conciliation Act, 1996 to invoke jurisdiction a party seeking to rely on the said provisions must apply not later than then submitting his first statement on the substance of the dispute. In the instant case in reply to the Motion having knowledge of the arbitration clause the defendants have so applied. In other words they have satisfied the first predicate of the said section. Section 8 would require that the application shall not be entertained unless accompanied by the original arbitration agreement or a duly certified copy thereof. In the instant case the plaintiff himself has filed and relied on the arbitration agreement. The defendants do not dispute the correctness of the said Arbitration Agreement. In other words there is substantial compliance by the defendants insofar as the second requirement of Section 8 of the Act of 1996 is concerned. Section 8 contemplates that it must be an application by any of the parties to the arbitral agreement. In the instant case the affidavit in reply itself can be treated as an application by the defendants considering the specific averments in para 3 of the affidavit in reply.
5. We may now decide the issue as raised by the plaintiff that the relief sought being on just and equitable grounds it is the Civil Court alone that would have jurisdiction and that the Arbitrator on such a ground has no jurisdiction. It may firstly be noted that Section 8 could be invoked and parties directed to arbitration if (a) all the parties to the suit are parties to the arbitration agreement and (b) the reliefs prayed for in the suit are covered by the Arbitral clause. The first criteria is satisfied as all parties to the arbitration agreement are parties to the suit. We may, therefore, deal with the said aspect. We have already reproduced the Arbitral clause. We have also noted that there are two prayer clauses. The second prayer clause is the alternate prayer for dissolution on the ground that the partnership is at Will. It may be noted here that the clause pertaining to dissolution of the partnership at Will requires the plaintiffs to give notice of 3 months. This can be said to be the period of notice which the parties have agreed amongst themselves under the contract to give reasonable period and on the expiry of that reasonable period the partnership would stand dissolved if the notice is not withdrawn or incapable of being withdrawn. The notice is dated 10th July, 2003. That notice has been received by the defendants which can be seen from the reply addressed to the plaintiff on 6th August, 2003. The only issue would be the exact date of receipt of the notice, as the period would commence from the date of receipt and on the expiry of 3 months, the date would be the date of dissolution of the partnership, on the ground of the partnership being at Will. This prayer clause therefore, would directly be covered by the arbitral clause as contained in the Deed of Partnership.
6. The contention on behalf of the plaintiff, however, is that as the partnership is at Will the same would stand dissolved after the completion of 3 months period which event has yet to happen. This Court, therefore, would retain jurisdiction to try the suit on the ground that Section 44(g) of the Partnership Act that dissolution of a partnership on the ground that it is just and equitable, is specifically the power of the Court and not of the Arbitrator. In Rehmatunissa Begum (supra) the Privy Council was considering the provisions as contained in Section 252 of the Contract Act as it then stood. Under the Act of 1940 which issue was considered in Olver v. Hillier (supra) a Civil Court could retain jurisdiction in certain circumstance even if an application was moved for stay the suit on reasons of fraud, etc., and itself decide the suit and not direct the parties to arbitration. This position has been reiterated by the Apex Court.
That is no longer the position under the Act of 1996. Under Section 16 of the Act of 1996 the Arbitral Tribunal can rule on its own jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement. In other words the issue whether it has jurisdiction to dissolve the partnership on the ground that it is just and equitable being a ground of the Tribunal assuming jurisdiction, can be decided by the Arbitral Tribunal considering the arbitral clause. At this juncture it is not necessary to decide the issue finally on account of the cause of action which is bound to arise on 3 months period expiring and the partnership stands dissolved. We may however, prima facie consider the issue, of 'just and equitable ground'. It is pointed out on behalf of the plaintiff that insofar as the issue is concerned, it is not within the jurisdiction of the Arbitrator and the Arbitrator can rule on his own jurisdiction and accordingly refuse or assume jurisdiction to decide the disputes. In my opinion that the issue is open for decision by the Arbitrator is no longer res integra considering the various judgments of the Apex Court including in Konkan Railway Corporation v. Rani Constructions, (P) Ltd. : [2002]1SCR728 which has thereafter been followed by the Apex Court in the State of Orissa v. Gokulananda Jena AIR 2003 SCW 3772. In other words it is clear that the issue pertaining to jurisdiction will be an issue which can be decided by the Arbitrator. If thereafter the Arbitrator answers the issue in the affirmative in favour of the plaintiff it may pass such appropriate orders as it may deem fit and proper. It is not for this Court to speculate on the nature of the order that may be passed by the Arbitrator at this stage.
7. Coming to the second limb of argument in the case of V. H. Patel (supra) it is true that the Apex Court insofar as the judgment is concerned in paragraphs 11 and 12 did not answer the issue of reference to arbitration on the ground of just and equitable ground. The Apex Court considering that case has been made out under the other clauses of Section 44 held that it would be within the jurisdiction of the Arbitrator to answer the disputes referred to it. The language of Section 44 of the Partnership Act would show that the suit filed at the instance of a partner, the Court may dissolve a firm on various grounds which are given therein, including on the ground of it being just and equitable. The Judgment in V. H. Patel (supra) if construed in the manner sought for the plaintiff would mean that a Court insofar as Clauses (a) to (f) is concerned would have jurisdiction, but insofar as Clause (g) is concerned would not have jurisdiction on the ground that Clause (g) is an exercise under the inherent jurisdiction of the Court. Prima facie though the judgment in V. H. Patel (supra) did not answer that issue in my opinion it will not be possible to read Section 44 in isolation or de hors the other grounds specifically set out in Section 44 and considering the opening words of the section. Section 44 does not form a part of the term of the contract between the parties as set out in the deed of partnership. It is a power conferred on the Court in situations arising thereto to dissolve the partnership including under Section 44(3). However, as already stated earlier, I do not propose to answer finally that issue, considering that this will be an issue which is be left open for consideration by the Arbitral Tribunal if the plaintiff so raises it.
7A. Having said so in my opinion the reliefs being covered by the arbitral clause and considering Section 8 of the Arbitration and Conciliation Act, 1996 the parties are directed to proceed to arbitration, of the disputes as set out in the plaint and the prayer clauses thereto by an Arbitrator to be appointed in terms of the agreement between the parties as contained in the arbitral clause.
8. On behalf of the plaintiff learned counsel contended that considering the urgency defendants should be restrained by an order of injunction or such other reliefs that this Court deems fit and proper. I am afraid this will not be possible as it is always open to the plaintiff to invoke Section 9 of the Arbitration and Conciliation Act for such reliefs. Having said so as the entire subject matter and the reliefs prima facie are covered by the Arbitration clause, parties are directed to proceed to arbitration.
Suit and Notice of Motion accordingly stand disposed of. There shall be no order as to costs.
Parties/Authorities to act on an ordinary copy of this order duly authenticated by the Associate/Personal Secretary of this Court.
Certified copy expedited.