Disposed

M/S. D.S.Transformers and Electrical Contractor v. State Bank of India

Telangana HC23 Aug 2018WP/9348/2018

Case brief

AI extract

What is this about?

This writ petition challenged the freezing of a partnership firm's bank account by the bank based on a partner's letter citing internal disputes. The Court held it was a contractual matter outside writ jurisdiction and directed the petitioner to use available remedies under the arbitration clause.

What did the court decide?

Writ petition dismissed. No order as to costs. Pending writ petitions stand closed.

M/S. D.S.Transformers and Electrical… — Constitutional and Fundamental Rights | Telangana HC (2018)

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HON’BLE SRI JUSTICE A.RAJASHEKER REDDY

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WRIT PETITION No.9348 OF 2018

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ORDER :

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This Writ Petition is filed assailing the action of the 2^nd respondent in freezing the current account No.32076350574 of the 1^st petitioner firm without any reason and consequently to direct the respondents 1 and 2 to unfreeze the said account.

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Heard learned counsel for the petitioner and Sri M.Srikanth Reddy, learned Standing Counsel for the respondents 1 & 2 and Sri K.L.B.Kumar, learned counsel appearing for the 3^rd respondent.

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Learned counsel for the petitioner, basing on the averments in the affidavit filed in support of the Writ Petition submits that the 2^nd petitioner and 3^rd respondent constituted a partnership firm, which is the 1^st petitioner herein. By virtue of the partnership deed dated 20.11.2011, the 2^nd petitioner is the Managing Partner of the 1^st petitioner firm and he is authorized to oversee the bank affairs apart from other functions and not the 3^rd respondent. He submits that the 1^st petitioner firm is undertaking repair works of current transformers and renders services to TSSPDCL and it is maintaining current account No.32076350574 with the 2^nd respondent Bank. He submits that when disputes arose between the 2^nd petitioner and the 3^rd respondent, the 3^rd respondent addressed a letter to the 2^nd respondent in the month of August, 2017 to freeze the accounts of the 1^st petitioner firm on the allegation that there were disputes between them. He submits

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ARR,J WP_9348_2018

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that freezing of current account of the 1^st petitioner by the 2^nd respondent basing on the letter of the 3^rd respondent is illegal. He submits that when once the current account is opened basing on the partnership firm, with the consent of both parties, same cannot be withdrawn on the letter given by one of the parties to the partnership firm and that the action of the 2^nd respondent in freezing the account of the 1^st petitioner is illegal, arbitrary and without jurisdiction.

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On the other hand, learned Standing Counsel for the 2^nd respondent appearing for the 2^nd respondent submits that though the current account is opened in the name of 1^st petitioner firm basing on the partnership deed dated 20.11.2011 between the 2^nd petitioner and the 3^rd respondent, but subsequently, 3^rd respondent addressed a letter dated 16.08.2017 stating that there were disputes between the 2^nd petitioner and the 3^rd respondent and requested to stop the operation of the said account. He submits that since there are only two partners in the 1^st petitioner partnership firm i.e., 2^nd petitioner and 3^rd respondent, one of the partner i.e., 3^rd respondent objected to for the operation of the current account of the 1^st petitioner firm, which is purely contractual in nature, as such, they stopped the operation of the said account and same cannot be faulted.

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In this case, it is to be seen that admittedly formation of 1^st petitioner firm by virtue of partnership deed dated 20.11.2011 between the 2^nd petitioner and 3^rd respondent, opening of current account No.32076350574 with the 2^nd respondent Bank and that

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ARR,J WP_9348_2018

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authorization of 2^nd petitioner for operating the said account is not in dispute. When the 3^rd respondent has withdrawn his authorization given by way of partnership deed in favour of 2^nd petitioner as there were disputes between 2^nd petitioner and 3^rd respondent, it is purely of contractual dispute, which cannot be resolved by the 1^st and 2^nd respondents nor by this Court by exercising the power of extraordinary jurisdiction under Article 226 of the Constitution of India.

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Since it is stated by the learned counsel for the petitioners that in the partnership deed there is an arbitration clause, as such, it is for the petitioner to avail the said remedy or any other appropriate remedy.

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With the above observation, this Writ Petition is disposed of. No order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.

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A.RAJASHEKER REDDY, J

23.08.2018 kvs

ARR,J WP_9348_2018

HON’BLE SRI JUSTICE A.RAJASHEKER REDDY

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WRIT PETITION No.9348 OF 2018

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Date: 23.08.2018

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kvs

M/S. D.S.Transformers and Electrical Contractor v. State Bank of India

Case brief

What is this about?

What did the court decide?

M/S. D.S.Transformers and Electrical Contractor v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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