Case Note & Summary
The petitioners, partners of a firm governed by a partnership deed dated 20 November 1995, referred a dispute to arbitration. The arbitration was pending for cross-examination. The petitioners filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking permission to withdraw their proportionate share of 65% of the royalty amount deposited by the respondent as agent with the Court Receiver. The Court had earlier appointed a Receiver of the partnership firm Hind Automobiles (Dongri) and its assets. The respondent was appointed as agent of the Court and had been depositing royalty since April 2011. The amount lying with the Receiver was about Rs.9,00,000. The Court allowed the petition, permitting the petitioners to withdraw 65% of the amount deposited, subject to furnishing an undertaking to refund the amount if required by the final award or order. The Court held that interim relief under Section 9 is necessary to protect the interests of the partners pending arbitration.
Headnote
A) Arbitration - Interim Relief - Section 9 of the Arbitration and Conciliation Act, 1996 - Withdrawal of Royalty - Petitioners sought withdrawal of 65% share of royalty deposited by respondent as agent with Court Receiver - Court allowed withdrawal of proportionate share of 65% of the amount deposited, subject to furnishing undertaking to refund if required - Held that interim relief is necessary to protect the interests of the partners pending arbitration (Paras 1-5).
Issue of Consideration
Whether the petitioners, as partners of a firm, are entitled to withdraw their proportionate share of royalty deposited by the respondent as agent with the Court Receiver pending arbitration.
Final Decision
The Court allowed the petition and permitted the petitioners to withdraw 65% of the amount deposited by the respondent as agent with the Court Receiver, subject to furnishing an undertaking to refund the amount if required by the final award or order.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- interim relief
- partnership dispute
- court receiver
- agency
- royalty
- proportionate share
Case Details
2012 LawText (BOM) (04) 98
Arbitration Petition No. 943 of 2011
Mr. Sandeep Parikh a/w Mr. Rajesh G. Singh i/by M/s. Legal Liasons for the Petitioners, Mr. Javed Hussein i/by M/s. Hussein & Co. for the Respondent, Mr. Ketan Trivedi, 1st Assistant for Court Receiver present in the Court
Bimla Devi Vijan and Mahinder Kumar Vijan
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief pending arbitration in a partnership dispute.
Remedy Sought
Petitioners sought permission to withdraw their proportionate share of 65% of the royalty amount deposited by the respondent as agent with the Court Receiver.
Filing Reason
Dispute arose between partners of a firm governed by partnership deed dated 20 November 1995, and arbitration was pending.
Previous Decisions
On 6 October 2010, in Arbitration Petition No. 1229 of 2010, the Court appointed a Receiver of the partnership firm Hind Automobiles (Dongri) and its assets, with direction to take formal possession and appoint an agent. The order was affirmed in appeal. The respondent was appointed as agent and has been depositing royalty since April 2011.
Issues
Whether the petitioners are entitled to withdraw their proportionate share of royalty deposited by the respondent as agent with the Court Receiver pending arbitration.
Submissions/Arguments
Petitioners argued that they are entitled to 65% share of the royalty amount deposited by the respondent as agent with the Court Receiver.
Ratio Decidendi
Under Section 9 of the Arbitration and Conciliation Act, 1996, the court has power to grant interim relief to protect the interests of parties pending arbitration. In a partnership dispute, partners are entitled to their proportionate share of income generated from partnership assets, and such withdrawal can be permitted subject to appropriate safeguards.
Judgment Excerpts
The Petitioners being partner of a firm governed by partnership deed dated 20 November 1995, as dispute arose, referred the matter to the Arbitral Tribunal.
This Court on 6 October 2010, in earlier Petition No. 1229 of 2010 appointed the Receiver of the partnership firm Hind Automobiles (Dongri) and of the assets and properties more described in the schedule, with further direction to take formal possession and to appoint an agent in the usual manner.
Procedural History
The petitioners filed Arbitration Petition No. 943 of 2011 under Section 9 of the Arbitration and Conciliation Act, 1996. Earlier, on 6 October 2010, in Arbitration Petition No. 1229 of 2010, the Court appointed a Receiver of the partnership firm and its assets. The order was affirmed in appeal. The respondent was appointed as agent and has been depositing royalty since April 2011. The present petition was heard and judgment reserved on 6 March 2012 and pronounced on 19 April 2012.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
