Dismissed

Dr.M.P.Korah v. Dr.Mrs.Rachel Zachariah @ Rahel

Kerala HC13 Jun 2018CRP/28/2018

Case brief

AI extract

What is this about?

The Court dismissed a revision petition challenging the dismissal of an application for reference to arbitration. The Court held that the claim for partition by co-owners did not fall within the arbitration clause of partnership deeds as the dispute concerned co-ownership status, not partnership matters, thus no reference arose.

What did the court decide?

Petitioners' claim for reference to arbitration under Section 8(1) of the Act was dismissed. The impugned order dismissing the application was confirmed.

Dr.M.P.Korah Vs Dr.Mrs.Rachel Zachariah @ Rahel — Partition | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE SATHISH NINAN

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WEDNESDAY, THE 13TH DAY OF JUNE 2018 / 23RD JYAISHTA, 1940

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CRP.No. 28 of 2018

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IA. NO.2348/2015 IN OS. NO.113/2015 OF PRINCIPAL SUB COURT, ERNAKULAM.

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REVISION PETITIONERS/PETITIONERS/DEFENDANTS 1 TO 4

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1 DR.M.P. KORAH, S/O.LATE PAILY, MANJUMMEKUDIYIL (CHELAKKULAM), KEERAMPARA P.O., 686 681, KEERAMPARA VILLAGE, KOTHAMANGALAM TALUK.

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2 DR.M.P. KURUVILA, S/O.LATE PAILY, MANJUMMEKUDIYIL (CHELAKKULAM), KEERAMPARA P.O., 686 681, KEERAMPARA VILLAGE, KOTHAMANGALAM TALUK, PRESENTLY RESIDING AT 15, CEDAR RIDGE LANE, DIX HILLS, LONG ISLAND, NEW YORK 11746, U.S.A., REPRESENTED BY HIS POWER OF ATTORNEY HOLDER 3RD REVISION PETITIONER, M.P. VARGHESE, S/O.LATE PAILY, MANJUMMEKUDIYIL (CHELAKKULAM), RESIDING AT G348, PANAMPILLY NAGAR P.O., KOCHI-682 036, ELAMKULAM VILLAGE, KANAYANNOOR TALUK, ERNAKULAM DISTRICT.

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3 M.P. VARGHESE, S/O.LATE PAILY, MANJUMMEKUDIYIL (CHELAKKULAM), RESIDING AT G348, PANAMPILLY NAGAR P.O., KOCHI-682 036, ELAMKULAM VILLAGE, KANAYANNOOR TALUK, ERNAKULAM DISTRICT.

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4 MRS.ANIMOL, W/O.DR.M.P. KORAH, MANJUMMEKUDIYIL (CHELAKKULAM), KEERAMPARA P.O., 686 681, KEERAMPARA VILLAGE, KOTHAMANGALAM TALUK.

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BY ADVS.SRI.V.K.BALACHANDRAN SRI.KIRAN PETER KURIAKOSE.

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RESPONDENTS/RESPONDENTS/PLAINTIFF AND DEFENDANTS 5 AND 6:

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1. DR.MRS.RACHEL ZACHARIA @ RAHEL, D/O.LATE PAILY, W/O.DR.ZACHARIAH THOMAS, PRESENTLY RESIDING A VILLA NO.6, MERIDIAN REGENT SQUARE, V.P. PETER ROAD, MARADU P.O., 682 304, MARADU VILLAGE, KANAYANNOOR TALUK, ERNAKULAM DISTRICT.

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CRP.No. 28 of 2018

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2. PRESTEEGE TEXTILE MARKETING COMPANY, REPRESENTED BY ITS MANAGING PARTNER L.VISHNUDAS, DOOR NO.40/402, CHELAKKULAM BUILDINGS, M.G. ROAD, JOS JUNCTION, KOCHI-682 011.

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3. PUNJAB & SIND BANK, REPRESENTED BY ITS BRANCH MANAGER, DOOR NO.40/403, CHELAKULAM BUILDINGS, M.G. ROAD, JOS JUNCTION, KOCHI-682 011, ERNAKULAM VILLAGE, KANAYANNOOR TALUK.

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R1 BY ADVS. SRI.M.N.MATHEW, SRI.THOMAS T.VARGHESE. R3 BY ADVS. SRI.SAJI MATHEW, SRI.DENU JOSEPH, SMT.NEETHU REGHUKUMAR.

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THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 05-06-2018, THE COURT ON 13/06/2018 PASSED THE FOLLOWING:

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rs. 14/06/2018.

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SATHISH NINAN, J.

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= = = = = = = = = = = = = = = = = = C. R. P. No.28 of 2018

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= = = = = = = = = = = = = = = = = = Dated this the 13^th day of June, 2018

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O R D E R

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An order refusing to refer the parties to arbitration in terms of Section 8(1) of the Arbitration and Conciliation Act, 1996 (for short “the Act”), is assailed in this revision by defendants 1 to 4 in the suit.

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Paily and Annam had four children - three sons Kora, Kuruvila and Varghese and one daughterRachel. They along with the wife of one of the sons Kora, purchased 19.648 cents of land in Sy. Nos.2575/2, 2575/4 and 2589/1 of Ernakulam village as per Ext.B1 Sale Deed dated 05.07.71. The daughter of the couple viz. Rachel filed the present suit for partition.

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The defendants filed I.A. No.2348/15 contending that in respect of the subject matter of the suit, all the co-owners of the property had entered into Ext.A1 Partnership Deed dated 01.04.96

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C. R. P. No.28 of 2018

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:- 2 :-

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which was subsequently re-constituted on the death of the mother as per Ext.A2 Partition Deed dated 30.12.03. Under Ext.A1 Partnership Deed, the property in question has been brought in as a partnership asset. Under Exts.A1 and A2 Partnership Deeds, there is an arbitration clause. Therefore, the dispute may be referred for arbitration in terms of Section 8(1) of the Act, is the contention.

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The court below found that the genuineness of the Partnership Deeds are disputed by the plaintiff, and that her genuineness not having been proved, the existence of a valid arbitration agreement as contemplated under Section 8(1) of the Act is not satisfied and accordingly, dismissed the application.

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Heard Senior Counsel Sri.N.Sukumaran on behalf of the revision petitioners and Sri.M.M.Mathew, learned counsel appearing on behalf of the respondents.

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The claim for partition is sought to be

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C. R. P. No.28 of 2018

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:- 3 :-

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referred for arbitration relying upon the arbitration clause in the partnership deeds. The partnership is claimed to have been constituted between the co-owners. As noticed supra, the genuineness of Exts.A1 and A2 Partnership Deeds are under dispute. Whatever that be, if the defendants are able to show that a partnership was constituted between the co-owners in respect of the subject matter, the suit for partition will not lie. According to the defendants, the property has been brought in as a partnership asset as per Ext.A1 Partnership Deed. Law is settled that whatever may be the character of the property which is brought in by the partners into the partnership, it becomes the property of the firm. Though the partnership property will vest in all the partners, all that the partner is entitled to is, share of profits. During the subsistence of the partnership, no partner can deal with any portion of the property as his own. It would be worthwhile to refer to the decision of the Apex Court in Addanki Narayanappa and another v. Bhaskara Krishnappa [AIR 1966 SC

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C. R. P. No.28 of 2018

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:- 4 :-

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1300] wherein it was observed thus:

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“The provisions of Ss. 14, 15, 29, 32, 37, 38 and 48 make it clear that whatever may be the character of the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership it becomes the property of the firm and what a partner is entitled to is his share of profits, if any, accruing to the partnership from the realisation of this property, and upon dissolution of the partnership to a share in the money representing the value of the property. No doubt, since a firm has no legal existence, the partnership property will vest in all the partners and in that sense every partner has an interest in the property of the partnership. During the subsistence of the partnership, however, no partner can deal with any portion of the property as his own. Nor can he assign his interest in a specific item of the partnership property to anyone. His right is to obtain such profits, if any, as fall to his share from time to time and upon the dissolution of the firm to a share in the assets of the firm which remain after satisfying the liabilities

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C. R. P. No.28 of 2018

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:- 5 :-

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set out in Cl. (a) and sub-cls. (i), (ii) and (iii) of Cl. (b) of S. 48. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership. It is true that even during the subsistence of the partnership a partner may assign his share to another. In that case what the assignee would get would be only that which is permitted by S. 29(1), that is to say, the right to receive the share of profits of the assignor and accept the account of profits agreed to by the partners.”

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C. R. P. No.28 of 2018

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:- 6 :-

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Therefore, if the constitution of the partnership under Exts.A1 and A2 is proved, the suit for partition will not lie.

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The claim for reference to arbitration is made relying on a clause in the Partnership Deed. The said clause in Ext.A1 and A2 are identical and reads thus:

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“Any dispute or difference of opinion which may arise

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regarding the construction, meaning and effect of these presents or regarding any liabilities of the partner under these presents or the dissolution or winding up of the business or any other matter relating to the firm shall be referred to one or more arbitrators to be appointed unanimously by the partners and the decision of such arbitrator/arbitrators shall be final and binding on all the partners of the firm.”

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The said clause comes into play only to resolve the dispute between the partners of the firm. The present claim for partition is in their status as co-owners. It does not fall within the sweep of the arbitration clause incorporated in the Partnership Deeds. Therefore, I am of the opinion that the

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C. R. P. No.28 of 2018

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:- 7 :-

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reference as sought for under Section 8(1) of the Act does not arise.

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In the result, though for varying reasons, I confirm the order of dismissal of I.A. No.2348/15. CRP is accordingly dismissed.

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Sd/SATHISH NINAN JUDGE

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kns/-

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//True Copy//

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P.S. to Judge

Dr.M.P.Korah v. Dr.Mrs.Rachel Zachariah @ Rahel

Case brief

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Dr.M.P.Korah v. Dr.Mrs.Rachel Zachariah @ Rahel

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