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2001 DAILYLAW 1265 (DEL)

RAJINDER SINGH v. KARTAR SINGH

2001-07-20

Sharda Aggarwal

body2001
Delhi High Court (July 20, 2001) 2001 (TLS)125861 2001-AD (Del)-7-1036 :: 2001-ILRDLH-7-245 RAJINDER SINGH Vs. Kartar Singh SHARDA AGGARWAL ( 1 ) THE petitioners have moved two applications for interim relief. IA. No. 11741/99 is in application under section 9 of the arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) read with Order 40 rule 1 Civil Procedure Code for appointment of a court receiver to take possession of the entire assets of the partnership M/s kalyan Cinema and IA. No. 11736/99 is under Section 9 of the Act read with Order 39 Rules 1 and 2 Civil Procedure Code for grant of interim injunction restraining the respondents from running the business of Kalyan Cinema or any other similar business by using the name or property of the dissolved partnership firm. ( 2 ) A short background of the facts is necessary. The applicants are the legal heirs of Sh. Kanhai Ram, who mas a partner alongwith the respondents having 31. 66% share in partnership firm, M/s Kalyan Cinema, As he Mas not satisfied with the running of the business of the firm, he filed a petition under Section 20 of the Indian arbitration Act, 1940 which was registered as Suit no. 1918a/95 for appointment of an arbitrator in terms of the arbitration clause contained in the partnership deed alleging that disputes had arisen with regard to the business of the cinema and its canteen and cycle stand. He had claimed rendition of accounts of the business w. e. f. 1986 and claimed his share. ( 3 ) ALONG with the main petition Kanhai Ram had also moved an application for appointing him a receiver (IA. 8369/95 in S. No. 1918/95), which was allowed vide orders dated 4/1/1996 and Kanhai Ram was appointed a receiver of the canteen and the cycle stand. Later on, Kanhai Ram had also moved an application for amendment (IA. 1114/97) of the main petition, alleging that additional disputes had arisen as the respondents had started misappropriating the funds of the main cinema business as well. He also moved an application (IA. 4123/97) praying for interim injunction restraining the respondents from incurring in any manner any expense on behalf of the partnership firm exceeding Rs. 500. 00 and restraining them from making any payment exceeding rs. 500. He also moved an application (IA. 4123/97) praying for interim injunction restraining the respondents from incurring in any manner any expense on behalf of the partnership firm exceeding Rs. 500. 00 and restraining them from making any payment exceeding rs. 500. 00 except by cheque and for directions to the respondents to deposit the daily proceeds of the cinema in the bank account of the firm. ( 4 ) THE respondents thereafter moved an application under Order 7 Rule 11 Civil Procedure Code for rejection of the petition on the ground that the firm being not registered, the petition/suit was not maintainable. The learned Single judge vide his orders dated 3/4/1998 allowed the respondents application and dismissed the suit in view of the bar of Section 69 of the Indian Partnership act, 1932 (hereinafter referred to as the Partnership act ). The other pending interlocutory applications were, accordingly, dismissed, An appeal being FAO (OS) No. 97/98 was filed against the said order. Kanhai Ram moved two applications in the appeal. One for appointing him a receiver (CM. 1443/98) of the canteen and cycle stand and the other for interim injunction (CM. 1445/98), which were disposed of vide a common order dated 22/10/1998. Kanhai Ram was appointed a receiver of the canteen and cycle stand subject to his depositing in the bank account of the partnership firm every month in advance a sum of rs. 30,000. 00 and possession thereof was ordered to be handed over to him w. e. f. 1/11/1998. On the application for interim injunction relating to the income of the main cinema business, the following orders were passed by the Division Bench:- "having regard to the facts and circumstances of the case, we direct the respondents not to make cash payment of any expense exceeding rs. 1,000. 00. We further direct the respondents to deposit in the bank account of the partnership firm whatever cash amounts they presently have within 48 hours. The respondents are further directed to deposit in the bank account of partnership the daily collections of the cinema, on the next working day of the bank. ( 5 ) KANHAI Ram died on 5/11/1999. 00. We further direct the respondents to deposit in the bank account of the partnership firm whatever cash amounts they presently have within 48 hours. The respondents are further directed to deposit in the bank account of partnership the daily collections of the cinema, on the next working day of the bank. ( 5 ) KANHAI Ram died on 5/11/1999. Being the legal heirs of Kanhai Ram, the applicants filed the present petition under Section 8 and 11 of the Act for appointment of an arbitrator to adjudicate the disputes and to go into the accounts of the dissolved firm alleging that the firm being partnership at Will, on the death of Kanhai Ram, it stood compulsorily dissolved under Section 42 (c) of the Partnership Act. The respondents without settling the accounts and giving the share of Kanhai Ram to his legal heirs, continued the business and opened a new bank account in State Bank of india, Ghonda. They ignored the offer of the petitioners to join them as partners in place of Kanhai Ram and execute a new partnership deed. Appointment of an arbitrator has been sought by the petitioners on the ground that after the death of Kanhai Ram, the firm stood dissolved under Section 42 (c) of the Partnership Act and the respondents could not run the business without rendition and settling of the accounts of the dissolved firm and paying off the share of the deceased partner to his legal heirs i. e. the petitioners herein. The petitioners case is based on Kanhai Ram s partnership with the respondents. They referred to a partnership deed dated 8/2/1990 containing an arbitration Clause. According to the respondents reply to the main petition, the last partnership deed was dated 1/4/1992. Copy of this deed has been placed on record, both by the petitioners as well as the respondents. Both the parties thus rely on this deed which, however, does refer to the earlier deed dated 8/2/1990. The partnership is at Will. It contains an arbitration Clause. ( 6 ) THE main objection taken by the respondents is that the present petition is not maintainable being barred under Section 69 (1) of the Partnership Act, as the petitioners being the legal heirs of Kanhai Ram claimed their rights and liabilities arising out of the contract of partnership of which Kanhai Ram was a partner. ( 6 ) THE main objection taken by the respondents is that the present petition is not maintainable being barred under Section 69 (1) of the Partnership Act, as the petitioners being the legal heirs of Kanhai Ram claimed their rights and liabilities arising out of the contract of partnership of which Kanhai Ram was a partner. According to the respondents, neither the said partnership was registered under the Partnership Act nor the name of Kanhai Ram was shown in the Register of firms. The same objection was taken in the earlier petition under Section 20 of the Indian Arbitration act, 1940 on the basis of which the said petition was rejected vide orders dated 3/4/1998 of the learned single Judge against which an appeal FAO. (OS ). 97/98 is pending before a Division Bench. The respondents have contended that the order dated 3/4/1998 has yet not been set aside and as such the bar will operate against the legal representatives of Kanhai Ram. The contention of the respondents is that since the main petition is not maintainable, the two applications under consideration are also not. maintainable in view of the bar of Section 69 of the Partnership Act. ( 7 ) I have been taken through the earlier order dated 3/4/1998 of the learned Single Judge and the order dated 22/10/1998 of the Division Bench in the FAO on the two applications moved by Kanhai Ram in the said appeal. Though the respondents have not filed any reply to the present applications under consideration but the learned counsel has addressed his arguments, inter alia, raising a preliminary objection to the maintainability of the main petition as well on merits of the applications. It was after the arguments were concluded and the order reserved that the parties also placed on record written submissions, wherein willingness has been shown to refer the dispute to an arbitrator, expecting that the arbitrator would render a timely award. This plea appears to have been taken as a ground for denying the prayer of the petitioners oners for appointment of a receiver. It is pertinent to note that in the reply to the main petition, the appointment of an arbitrator is opposed on every possible ground. This plea appears to have been taken as a ground for denying the prayer of the petitioners oners for appointment of a receiver. It is pertinent to note that in the reply to the main petition, the appointment of an arbitrator is opposed on every possible ground. Both the learned counsel for the parties insisted that arguments on the two interim applications be heard and the same be disposed of- Had the offer been bonafide the petition would have been disposed of long time back as a number of adjournments were given to the parties for settlement. Arguments were only addressed on the interim applications and I, accordingly, propose to dispose of the same. ( 8 ) IT transpires from, the record of this case that the parties took considerable time for settling the dispute amicably but the same did not materialize and finally arguments were addressed without even filing reply to the applications. However, reply to the main petition is on record. ( 9 ) BEFORE dealing with the merits of the two applications it would be appropriate to decide the objection of the respondents to the maintainabity of the main petition in view or the bar or Section 69 (1) of the Partnership Act. The earlier petition under Section 20 of the Indian Arbitration Act, 1940 was filed by kanhai Ram (since deceased) being a partner of an existing firm, against the respondents being his co-partners. So far the present petition under Section 8 and 11 of the Act is concerned, the position has substantially changed, in that Kanhai Ram died on 5/11/1999 and the partnership being at Will, stood automatically dissolved under Section 42 (c) of the partnership Act. This fact is not disputed. Admittedly, the respondents after the death of Kanhai Ram continued with the business of the firm to the exclusion of the petitioners and opened a fresh account in the State bank of India, Ghonda. The present petition has been filed by the petitioners to enforce their rights for rendition of accounts and settling the affairs of the dissolved firm. Shri Sandeep Sethi, learned counsel for the respondent contends that the death of a partner does not bring the firm to a close and the surviving partners can carry on business with the property of the firm. Shri Sandeep Sethi, learned counsel for the respondent contends that the death of a partner does not bring the firm to a close and the surviving partners can carry on business with the property of the firm. The contention is that since the partnership deed dated 1/4/1992 wherein Kanhai Ram was a partner was not registered with the Registrar of the Firms, the present petition is barred under Section 69 of the Partnership act. . The controversy as to whether the earlier petition filed under Section 20 of the Indian Arbitration Act, 1940 filed by Kanhai Ram was barred under Section 69 of the partnership Act is pending before a Division Bench in FAO (OS) 97/98. ( 10 ) SHRI Harish Malhotra, learned counsel for the petitioners has argued that the said controversy will not affect the decision of the decision of the present petition, as the earlier controversy was with regard to the rights of a partner against his co-partners in an existing partnership firm, whereas the present petition rebates to the rights of the legal heirs of the deceased partner after the dissolution of the firm. In order to appreciate the rival contentions, Section 69 of the partnership Act,1932 is reproduced below: "69. Effect of non-registration - (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been partner in the firm unless the firm is registered and the person suing is or his been shown in the Register of Firms as a partner in the firm. (2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of firms as partners in the firm. (2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of firms as partners in the firm. (3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect,- (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right to power to realise the property of a dissolved firm, or (b) the powers of an official assignee, receiver or court under the presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency act, 1020 (5 of 1920) to realise the property of an insolvent partner. (4) X X X X X X ( 11 ) A reading of Section 69 of the Partnership Act shows that sub-section (1) bars the rights of any person suing as a partner in a firm to enforce a right arising from a contract against the firm or any of its partners, and sub-section (2) bars the enforcement of a claim arising from a contract by a firm against third parties unless the firm is registered with the Registrar of firms. Sub-section (3), however, introduces certain exceptions to the disability imposed by sub-sections (1) and (2 ). The disabilities are also extended to the claim of set off or other proceedings to enforce a right arising from any such contract. The exceptions to sub-sections (1) and (2) of Section 69 of the Partnership act are provided in sub- section 3 (a) and 3 (b ). These exceptions clearly enable the enforcement of right to sue for the dissolution of a firm or for accounts of a dissolved firm or any right or power of firm to realize the property of a dissolved firm. Thus, a suit for accounts of a dissolved firm or for realizing the assets of a dissolved firm is not barred under the provisions of sub-sections (1) and (2) of Section 69 of the Partnership act by reasons of the exceptions contained in sub-section (3) of Section 69 of the Partnership Act. Thus, a suit for accounts of a dissolved firm or for realizing the assets of a dissolved firm is not barred under the provisions of sub-sections (1) and (2) of Section 69 of the Partnership act by reasons of the exceptions contained in sub-section (3) of Section 69 of the Partnership Act. A petition under the arbitration Act is covered under the term "other proceedings" as referred in sub-section (3) of section 69 of the Partnership Act, as the right to claim arbitration is a right arising out of the contract between the parties. If the right to claim the relief is restricted to the accounts of a dissolved firm or any other right or power to realize the property of the dissolved firm then non-registration of the firm is no bar to a petition for reference of disputes to arbitration. Shri Harish Malhotra the learned counsel for the petitioners in this respect has relied upon Jagat mittar Saigal Vs. Kailash Chander Saigal and anr. AIR 1983 delhi 134. In the said case the partners were brothers and sisters. They entered into a partnership vide a partnership deed dated 1/5/1968. Later on some of the terms and conditions of the partnership were varied and a fresh partnership deed was executed on 12/4/1971. The said partnership deed contained an arbitration clause. Certain disputes arose between the partners with regard to the carrying on the business of the firm. The partnership being at Will one of the partners dissolved the partnership firm with effect from 15/9/1976. A balance sheet was prepared and sent to the other partner which was not accepted as correct. At this the other partner demanded the rendition of true and proper accounts of the partnership dealings and transactions. On failure of complying with the said demand a dispute arose between the parties which was referable to the arbitrator in terms of the arbitration Clause. In these circumstances, the aggrieved partner invoked the Jurisdiction of the Court by a petition under Section 20 of the Indian Arbitration act, 1940 for appointment of an arbitrator for adjudication of theentire disputes with regard to the affairs, dealings and rendition of accounts of the dissolved firm. In these circumstances, the aggrieved partner invoked the Jurisdiction of the Court by a petition under Section 20 of the Indian Arbitration act, 1940 for appointment of an arbitrator for adjudication of theentire disputes with regard to the affairs, dealings and rendition of accounts of the dissolved firm. A preliminary objection was raised about the maintainability of the petition on the ground that the partnership firm, in pursuance of the deed dated 12/4/1971 was not registered with the Registrar of Firms and as such the petition was barred under Section 69 of the Partnership Act. The Court after considering the provisions of Section 69 of the Partnership Act found that the petition to be maintainable as it clearly fell within the exceptions provided under sub-section (3) of section 69 of the Partnership Act. It was held as under:- "the legislature in its wisdom has provided in Clauses (a) and (b) of sub-sec. (3) of Section 69 of the partnership Act that the rights of the partners of an unregistered firm in regard to the dissolution of the partnership, its accounting and the realization of the property of a dissolved firm are to remain unaffected by the provisions of sub-secs. (1) and (2) of Section 69 of the Partnership act. Clauses (a) and (b) of sub-section (3) of Section 69 engraft an exception upon the provisions contained in sub-sections (1) and (2) of Section 69. It is equally applicable to the enforcement of a right arising from a contract by way of a suit or in other proceedings including a petition under section 30 read with S. 8 or the Act. The right to proceed to Arbitration is a right arising out of the contract between the parties. If the right to claim the re]ief is restricted to the accounts of a dissolved firm or any right or power to realize the property of a dissolved firm, then the non-registration of the firm is no bar to the petition for referring the matter in dispute to arbitration. " ( 12 ) THE facts of this case apply to the case in hand on all force. Shri Sandeep Sethi, the learned counsel for the respondents has heavily relied on Jagdish Chander Gupta vs. Kajaria Traders (India Ltd. ). 1964 (8) SCR 50 . " ( 12 ) THE facts of this case apply to the case in hand on all force. Shri Sandeep Sethi, the learned counsel for the respondents has heavily relied on Jagdish Chander Gupta vs. Kajaria Traders (India Ltd. ). 1964 (8) SCR 50 . In the said decision, the case before the Supreme Court was not a suit or other proceedings by a partner of an unregistered firm to enforce any right to sue for dissolution of the firm or for accounts of dissolved partnership or for realizing the property of a dissolved firm. As such the ratio of the said case cannot be applied to the case in hand. The case in hand clearly falls within the exceptions provided by Clauses (a) and (b) of sub-section 3 of Section 69 of the Partnership Act. In the Supreme Court decision, Kajaria Traders (India) ltd. entered into a partnership agreement containing an arbitration clause with Jagdish Chander Gupta but, the partnership was not registered. Disputes arose between the parties. Kajaria Traders invoked the arbitration clause and requested "jagdish Chander Gupta" to refer the disputes for arbitration. On failure of Jagdish Chander gupta to agree to the request, Kajaria Traders filed an application for appointment of an arbitrator. The petition was rejected being barred under Section 69 sub-section (3) of the Partnership Act on account of the firm being not registered with the Registrar of the Firms. On these facts, the Supreme Court held that the petition was not maintainable Under sub-section (3) of Section 69 of the Partnership Act. As the said case did not fall under the exceptions provided in sub-section (3) of section 69 of the Partnership Act, there was no occasion to discuss the scope of the exceptions. The said Supreme court case was also referred but distinguished in Jagat mittar Saigal s case (supra ). ( 13 ) AT this stage, reference to another Supreme Court decision in the case of Premlata and anr. Vs. M/s. Ishar_ dass Chaman Lal and ors. , (1995) 2 SCC 145 may be made with advantage. In the said case a suit was filed under section 20 of the Indian Arbitration Act, 1940 by the legal representatives of a deceased partner of a firm for reference to arbitration, of disputes regarding rendition of accounts of the firm after dissolution, in, terms of an unregistered partnership deed having an arbitration clause. In the said case a suit was filed under section 20 of the Indian Arbitration Act, 1940 by the legal representatives of a deceased partner of a firm for reference to arbitration, of disputes regarding rendition of accounts of the firm after dissolution, in, terms of an unregistered partnership deed having an arbitration clause. An objection of the maintainability of the suit as raised by the opposite party on the ground of non-registration of the firm. After considering Section 69 of the Partnership Act and distinguishing Kajaria trader s case (supra) the Supreme Court held as under:- "sub-SECTION (3) (a) carves out three exceptions to sub-sections (1) and (2) and also to the main part of sub-section (3) of Section 69 of the Partnership Act, namely, (1) the enforcement of any right to sue for the dissolution of firm; (2) for accounts of the dissolved firm; and (3) any right or power to realize the property of the dissolved firm. Having created such exception, the right to sue cannot again be construed to engulf the exceptions carved out by sub-section (3) or sub-section (4) of Section 69 of the act. Any construction otherwise would render the exceptions, legislature advisedly has carved out in sub-sections (3) and (4) of Section 69, otiose. The object appears to be that the partnership having been dissolved or has come to a terminus, the rights of the parties are to be worked out in terms of the contract of the partnership entered by and between the partners and the rights engrafted therein. The exceptions carved out by sub-section (3 ). are to enforce those rights including the rights to dissolution of the partnership despite the fact that the partnership firm was an unregistered one. Having kept that object in view, it is clear that the alternative resolution forum agreed to by the parties, namely, reference to a private arbitration is a mode of enforcing the rights given under clause (a) of sub-section (3) of Section 69 of the Act and gets excluded from the main part of sub-section (3) and sub-sections (1) and (2) of Section 69. The enforcement of the right to sue for dissolution includes a right for reference to an arbitration in terms of the agreement of the partnership by and between the parties. Therefore, there is no embargo for filing a suit under Section 20 of the Act. The enforcement of the right to sue for dissolution includes a right for reference to an arbitration in terms of the agreement of the partnership by and between the parties. Therefore, there is no embargo for filing a suit under Section 20 of the Act. " ( 14 ) REFERENCE is also made to another Supreme Court decision in the case of M/s. Krishna Motor Service by its partners Vs. W. B. Vittala Kamath. AIR 1996 SC 2209 . In this case an unregistered partnership firm was dissolved by mutual consent. The partnership deed contained an arbitration clause. Disputes arose with regard to settlement of accounts and right to realize property of the dissolved firm etc. A petition under Section 20 of the Indian Arbitration Act, 1940 was filed for appointment of an arbitrator to adjudicate the disputes having arisen with regard to the settlement of accounts of the dissolved firms. An objection was raised to the maintainability of the petition on the ground that the partnership was not registered with the Registrar of Firms. While raising the objection, reliance was placed on Kajaria Traders case (supra ). The Supreme Court distinguishing the decision in kajaria s case (supra) and following Premlata s case (supra), held as under:- "but in a case where the parties have already agreed for dissolution of the partnership by mutual consent, the partnership stood dissolved. There is no dispute as regards the right arising from the contract of a firm. The dispute is only with regard to working out the rights flown from dissolution for settlement of accounts of the dissolved firm or any right or power to realize the property of the dissolved firm etc. That right would form part of the exception engrafted in sub-section (3) of Section 69. The object intended by the Legislature appears to be that in spite of the defect of non-registration and the prohibition created in the main part of non- enforceability of the right arising from a contract, the parties having worked under that contract, to the limited extent of the enforcement of a right to realize the assets, settlement of the accounts of the dissolved firm or any right or power to realize the property of the dissolved firm are exceptions engrafted therein and gives right to the parties to enforce the same, independent of the right arising from the contract. Therefore, the parties are relieved from the prohibition created by operation of Section 69. " ( 15 ) IN view of the above disussion, I hold that the present petition under Section 8 and 11 of the Act is not barred under sub-sections (1) and (2) of Section 69 of the Partnership Act. The petition is maintainable. another objection raised by the respondents is that the death of Kanhai Ram did not bring the business of the firm to a close and the business of the firm survived and the surviving partners are entitled to carry on the business with the property of the firm and the estate of the deceased partner can find recourse to section 37 of the Partnership Act and would be entitled to such share of the profits made since his death as may be attributable to the use of the deceased partner s share of the property of the firm or to an interest at the rate of 6% per annum on the amount of the share of the deceased in the property of the firm, as on the date of his death. The facts that Kanhai Ram died on 5/11/1999 and the partnership was at Will, and the firm stood compulsorily dissolved under sub-section (c) of Section 42 of the Partnership Act, are not disputed. In order to appreciate as to whether in the given facts of the case the petitioners representing the estate of the deceased Kanhai Ram would be entitled to the winding up of all the affairs of the firm and for realizing the assets thereof as on the date of dissolution of the firm or would be entitled to exercise their option under section 37 of the Partnership Act to have the share of the profits in the firm made since Kanhai Ram ceased to be a partner, which might be attributable to the use of his (deceased) share of. the property of the firm, it mould be important to refer to the relevant provisions of the Partnership Act. Section 37 falls in chapter V of the Partnership Act, which deals with the "rights of incoming and outgoing partners". Section 37 runs as under: "37. Right of outgoing partner in certain cases to share subsequent profits. the property of the firm, it mould be important to refer to the relevant provisions of the Partnership Act. Section 37 falls in chapter V of the Partnership Act, which deals with the "rights of incoming and outgoing partners". Section 37 runs as under: "37. Right of outgoing partner in certain cases to share subsequent profits. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six per cent per annum or the amount of his share in the property of the firm: provided that whereby contract between the partners an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner, or the outgoing partner or his estate, as the case may be, is not entitled to any further or other share of profits; but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof, he is liable to account under the foregoing provisions of this section. " ( 16 ) ACCORDING to this Section if in the event of the death of a partner or his otherwise ceasing to be a partner, the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of the accounts, then, the outgoing partner or the estate of the deceased partner is entitled to such share of the profits made subsequent to such cessation or his death, which may be attributable to the use of his share of the property of the firm or to interest at the rate of 6% per annum on the amount of his share. The legal heirs of. The legal heirs of. the deceased have an option to exercise that right. This Section deals with the rights of an outgoing partner or the estate of a deceased partner in respect of the firm subsequent to the date of such cessation or his death. On the death of a partner if the share of the deceased in the partnership business remain, and the business is continued, the estate of the deceased partner becomes entitled to the subsequent profit earned by the business which may be attributable to the use of his share. This Section does not at all deal with the rights of the erstwhile partner or his estate prior to the date of his cessation as a partner or his death. ( 17 ) IN order to exercise the option under Section 37 of the Partnership Act, the share of the deceased partner as on his death has to be ascertained. The share of kanhai Ram as on his death has not been ascertained as the accounts of the dissolved firm have not been settled and admittedly the respondents are carrying on the same business with the property of the firm including the share of Kanhai Ram. The petitioners cannot be compelled to exercise their option under Section 37 of the Act till the accounts of the dissolved firm are settled nor they can be barred from claiming the past sharp or the partner by virtue of Section 37. The rights or a retiring or outgoing partner or the estate of the deceased partner under Section 37 of the Partnership Act came up for consideration before a Division bench of Calcutta High court in the case of Tilokram Ghosh and others Vs. Smt. Gita Rani Sadhukhan and ors. , AIR 1989 Cal. 254 , wherein it was held as under:- "section 37 of the Partnership Act deals with the rights of a retiring partner or the estate of the deceased partner in respect of the firm. Smt. Gita Rani Sadhukhan and ors. , AIR 1989 Cal. 254 , wherein it was held as under:- "section 37 of the Partnership Act deals with the rights of a retiring partner or the estate of the deceased partner in respect of the firm. On the death of a partner, if the shares of the deceased partner in the partnership business remain and the business is continued, the estate of the deceased partner u/s 37 of the partnership Act, becomes entitled to the subsequent profit earned by the business as may be attributable to the use of the share of the deceased partner in the firm or to have interest at the rate of 6% per annum on the shares of the deceased partner in the assets of the firm provided there was no final settlement of the accounts as between the firm and the estate of the deceased partner. This right and/or the option conferred by the provisions of Sec. 37 of thy Partnership Act on the estate of the deceased partner cannot be properly exercised until the accounts of the subsequent business are made available and as such the estate of a deceased partner is not bound to make the election until the profit earned in if respect of the share of the deceased partner is ascertained. This section should be read with the provisions of Sec. 88 of the Trust Act which provides that the continuing partners are trustees for the estate of the deceased partner as would be evident from the illustration (f) set out thereunder. The autority on this point is Ramnarayan v Kashinath reported in AIR 1954 Pat 53 . Therefore, on the death of Sibram, Bhabatartni could claim, u/s. 37 of the Act and after her death, the appellants Nos. 2 to 8 become entitled to all the right title and interest of bhabatarini conferred by S. 37 of the Act on account of Bhabatarini dying intestate. The plaintiffs 2 to 8 are, therefore, entitled to the share of the profit which has been earned by the firm subsequently to the death of Sibaram in respect of his share which continued to remain in the firm and Banerjee Group continued to be trusteed for them. The plaintiffs 2 to 8 are, therefore, entitled to the share of the profit which has been earned by the firm subsequently to the death of Sibaram in respect of his share which continued to remain in the firm and Banerjee Group continued to be trusteed for them. On dissolution of the firm, they will be entitled to exercise their option conferred by S. 37 of the Partnership Act when the accounts of the dissolved firm would be taken in accordance with the provisions of S. 48 of the partnership Act. " ( 18 ) CHAPTER VI of the Partnership Act deals with "dissolution of a Firm". Section 42 refers to the dissolution of a firm on the happening of certain contingencies including the compulsory dissolution of a firm on the death of a partner. Section 43, deals with dissolution of a firm where the partnership is at Will by any partner giving a notice in writing to the other partners. Section 44 deals with dissolution of a firm by the intervention of a Court. Section 46 deals with the rights of the partners to have the business wound up after dissolution. Section 48 deals with the mode of settlement of accounts between the partners. Section 49 deals with the payment of a firm s debts at the time of settling accounts. Section 53 deals with the rights of a partner or his representative after a firm is dissolved, to restrain the other partners from carrying on a similar business in the firm name andusing the property of the dissolved firm for their own benefit till the affairs of the dissolved firm are completely wound up. Section 55 provides that at the time of settling of the account of the dissolved firm the goodwill of the firm shall be included in the assets of the firm. ( 19 ) THE scheme of the Sections of the Partnership Act and the above discussion make it clear that the petitioners cannot be compelled to exercise their option under. Section 55 provides that at the time of settling of the account of the dissolved firm the goodwill of the firm shall be included in the assets of the firm. ( 19 ) THE scheme of the Sections of the Partnership Act and the above discussion make it clear that the petitioners cannot be compelled to exercise their option under. Section 37 of the Partnership Act till the accounts of the dissolved firm are settled In accordance with the provisions of Section 48 of the Partnership Act nor can section 37 be a bar: to their claiming the share of Kanhai ram in the partnership profits and assets as might be found due to him or his estate on the date of dissolution of the firm. ( 20 ) I will now deal with the merits of petitioners application being IA No. 11741/99 moved under Section 9 of the Act read with Order 40 Rule 1 Civil Procedure Code for appointment of a court receiver. The petitioners have prayed for appointment of a Court receiver with a direction to take possession of the assets and to run the business of M/s kalyan Cinema. The contention of the learned counsel for petitioners is that after the death of Kanhai Ram the partnership stood dissolved under Section 42 sub-section (c) of the Partnership Act and the petitioners inherited the shares of Kanhai Ram in partnership business of Kalyan cinema by virtue of a registered will left by Kanhai Ram. Kanhai Ram had a share to the extent of 31. 66% in the partnership. It is contended that in view of the compulsory dissolution of the firm the surviving partners i. e. the respondents do not have the right to continue with the said business and to utilise the partnership assets till the affairs of the firms are wound up and after paying off the liabilities, the surplus divided in the sharing ratio of the partners. The submission is that despite the petitioners request, not to continue with the said business they have been running the same and have even opened a fresh account in another bank which is being operated by the respondents and are misappropriating the assets of the partnership firm, which stood compulsorily dissolved on the death of Kanahi Ram on 5/11/1999. The submission is that despite the petitioners request, not to continue with the said business they have been running the same and have even opened a fresh account in another bank which is being operated by the respondents and are misappropriating the assets of the partnership firm, which stood compulsorily dissolved on the death of Kanahi Ram on 5/11/1999. The respondents even refused the offer of the petitioners for being Joined as partners in the business after the death of Kanhai Ram. The petitioners, seek the appointment of a receiver in order to protect their rights in the assets of the firm, which already stands dissolved. ( 21 ) IT is pointed out that even during the life time of Kanhai ram disputes had arisen as the respondents had started misappropriating the funds of the business of the cinema and the income from the canteen and cycle stand. Even kanhai Ram had filed a petition under Section 20 of the indian Arbitration Act, 1940 registered as Suit No. 1918a/95 for referring the disputes rgarding the income from canteen and cycle stand of the cinema, to an arbitrator. It is pointed out that according to Kanhai Ram the income from canteen and cycle stand was about Rs. 2,000. 00 per day against which the respondents were only showing an income of Rs. 18,000. 00 per month. The learned counsel for the petitioners contends that the respondents were misappropriating the income of the firm and Kanhai Ram was, therefore, appointed as recevr by the learned single Judge to continue the business of the canteen and cycle stand on his depositing a sum of Rs. 30,000. 00 per month. It is contended that, though later on, the suit filed by Kanhai Ram was dismissed in view of the bar of section 69 of the Partnership Act, but an appeal against the same was admitted and is pending before a Division bench, wherein Kanhai Ram was again appointed a receiver for the canteen and cycle stand w. e. f. 1/11/1998 on his depositing a sum of Rs. 30,000. 00 per month and directions were issued to the respondents to deposit the daily cash receipts of cinema income in the bank account to which kanhai Ram was a signatory and further directed not to pay in cash any expense exceeding Rs. 1 ,000. 30,000. 00 per month and directions were issued to the respondents to deposit the daily cash receipts of cinema income in the bank account to which kanhai Ram was a signatory and further directed not to pay in cash any expense exceeding Rs. 1 ,000. 00 the contention is that instead of settling the affairs of the firm after the death of Shri Kanhai Ram and paying the share of the deceased to his heirs, the respondents continued the business to their exclusion utilizing the share of the deceased in the dissolved firm. Mr. Harish Malhotra contends that the respondents conduct even during the life time of Shri Kanhai Ram speaks volumes which is reflected in the Division Bench order dated 22/10/1998 where it is observed,as to how the cinema canteen and cycle stand were given out for a term of five years to one Smt. Urmila Devi for Rs. 48,000. 00 per annum i. e. Rs. 4,000. 00 per month only as against the offer of Shri Kanhai Ram to deposit a sum of Rs. 30,000. 00 per month. It was on account of the misappropriation of the partnership funds, which highlighted, the conduct of the respondents, that, Kanhai Ram was appointed a Receiver for running the business of the canteen and cycle stand on his depositing a sum of Rs. 30,000. 00 per month in the bank account of the firm. As the respondents were even found paying the salaries of the staff in cash, indicating that the business funds were being mis-appropriated, the division Bench vide its order dated22/10/1998also directed the respondents not to make cash payments of any expense exceeding Rs. 1,000. 00. They were also directed to deposit in the bank account of the firm the daily collection of the cinema on the next working day. The contention is that. when the conduct of the respondents in running the business of the firm was not fair even during the life time of Kanhai Ram, how one could expect that it would be fair towards the heirs of Kanhai Ram. Respondents relations with the petitioners are not at all cordial, rather the record demonstrates that they are at logger heads. when the conduct of the respondents in running the business of the firm was not fair even during the life time of Kanhai Ram, how one could expect that it would be fair towards the heirs of Kanhai Ram. Respondents relations with the petitioners are not at all cordial, rather the record demonstrates that they are at logger heads. Admittedly, after the death of,kanhai Ram, the respondents have not settled the accounts of the dissolved firm and have continued the business by utilizing the share of the deceased by opening a new bank account to be operated by the respondents alone. admittedly, earlier Shri Kanhai Ram used to be a signatory to the bank account but after his death, his heirs are not associated with the business of the firm. The contention is that the respondents are thus mis-appropriating the share of the deceased in the dissolved firm to the detriment and exclusion of the petitioners. Mr. Harish malhotra, learned counsel for the petitioners contends that the petitioners not only have an apprehension of injury at the hands of the respondents but are actually suffering an injury and in the circumstances it is a fit case where Receiver should be appointed of the partnership property and assets of the firm to protect the same, otherwise the same. is in danger of being wasted and dissipated. The learned counsel has placed reliance on a decision Vidya Devi Vs. Mani Ram and ors. , 1974 RLR 346 . M/s. Krishna Motor Service by its partners Vs. W. B. Vittala Kamath. AIR 1996 SC 2209 . Jagdish Chander Gupta vs. Kajaria Traders (India Ltd. ). 1964 (8) SCR 50 . Jagat mittar Saigal Vs. Kailash Chander Saigal and anr. AIR1983 delhi 134 ( 22 ) IN the said case, Vidya Devi, after the death of her husband, who was a partner in the firm, became a partner in his place and a new partnership was constituted. She, however, could not continue for long and the partnership being at Will opted to dissolve the firm by serving a notice on the other partners. She also prayed for the appointment of Receiver of the property and assets of the firm in order to protect her share therein. Learned single Judge, relying upon two earlier decisions in the case of Nihalchand L. Jai Narain and ors. Vs. Ram Niwas munna Lal and ors. She also prayed for the appointment of Receiver of the property and assets of the firm in order to protect her share therein. Learned single Judge, relying upon two earlier decisions in the case of Nihalchand L. Jai Narain and ors. Vs. Ram Niwas munna Lal and ors. AIR 1968 Punjab and Haryana 523 and sheonarain Jaiswal and ors. Vs. Shree Kirpa Shankar jaiswal and anr. , AIR 1972 Pat 75 , held that where the parties fear injury at the hands of the co-partners, a receiver should be appointed of the partnership property in the so it for dissolution of firm. In Nihalchand's case (supra), it was held that Receiver might be appointed where there is reasonable apprehension of the partnership assets or income being in danger of mis-used or dissipated. In Sheonarain Jaiswal's case (supra), it was held that Receiver should be appointed as a matter of course where partnership stands dissolved and the suit is for distribution of assets of a dissolved firm. ( 23 ) MR. SANDEEP Sethi, learned counsel for the respondents has vehemently opposed the proposition that in case of a dissolved firm, Receiver should be appointed as a matter of course. We has placed reliance on the decision in the case of T. Krishna Swamy Chetty Vs. C. Thangavelu Chetty and ors. , AIR 1955 Mad 430 where the learned Single Judge of that Court had enunciated five principles, which could be described as "punch Sadachar" of the courts exercising equity jurisdiction in appointing receivers. The five principles are as under : "1. The appointment of a receiver pending a suit is a flatter resting in the sound and judicial discretion of the court taking into account all the circumstances of the case and for the ends of justice and for protecting the rights of the parties interested and in the absence of there being no other adequate remedy. 2. The court should not appoint a receiver except on proof by the plaintiff that prima facie he has excellent chance of succeeding in the suit. 3. The plaintiff must show some emergency or danger loss calling for an immediate action. A Court will not appoint a receiver merely on the ground that it will do no harm. 4. 2. The court should not appoint a receiver except on proof by the plaintiff that prima facie he has excellent chance of succeeding in the suit. 3. The plaintiff must show some emergency or danger loss calling for an immediate action. A Court will not appoint a receiver merely on the ground that it will do no harm. 4. An order appointing a receiver will not be made where it has the effect of depriving a defendant of a de-facto possession since that might cause irreparable wrong. 5. The Court looks to the conduct of the party who makes the application and would usually refuse to interfere unless his conduct had been free from blame. " ( 24 ) THE principles laid down by the Madras High court have been considered and followed in subsequent cases by other High Courts including Delhi High Court. ( 25 ) NO doubt, the principles laid down by the Madras high Court need to be kept in mind while deciding an application for appointment of Receiver, but no court has been able to lay down unvarying and inflexible rules applying to all circumstances and eventualities. The facts of the actual case are of primary consideration which determine the exercise of the discretionary powers of the Court. It is true that the power is to be exercised sparingly and with caution and circumspection. ( 26 ) LEARNED counsel for the respondents has relied upon another decision in the case of Mohindar Nath and ors. Vs. Narender Nath and ors. , 72 (1998) DLT 759 (OB ). In this case, the principles laid down by the Madras High court were considered and following observations were made: "we are not in agreement with mr. Dholakia that in every case where a partner approaches the Court for dissolution of partnership, which is stated, to be at Will a Receiver is to be appointed as a matter of course. In our view, a Receiver is to be appointed only in cases where it is just and convenient to appoint the same. No positive or unvarying rule can be laid down as to whether the Court will or will not interfere by this kind of interim protection of the property. It depends on the facts and circumstances of each case. In our view, a Receiver is to be appointed only in cases where it is just and convenient to appoint the same. No positive or unvarying rule can be laid down as to whether the Court will or will not interfere by this kind of interim protection of the property. It depends on the facts and circumstances of each case. In all these cases, it is necessary to allege and prove some peril to the property and the appointment then rests on the sound discretion of. the court. If the Court is satisfied upon the material it has before it that the party who makes the application has established a good prima facie title, and that the property the subject matter of the proceedings will be in danger if left until the trial in the possession or under the control of the party against whom the Receiver is asked for or, at least, that there is reason to apprehend that the party who makes the application will be in a worse situation if the appoitment or a Receiver is delayed, the appointment of a Receiver is almost a matter of course. " ( 27 ) THE Division Bench in the above case did observe that appointment of a Receiver depends on the facts of each case. It has observed that if the Court is Satisfied on the material placed before it that the party seeking appointments of a receiver has. a good prima facie case and that the property in question will be in danger if left in the control of the opposite party and that it is apprehended that the party seeking the appointment of a receiver would be in a worse position if the appointment is delayed then such an appointment is almost a matter of course. In the said case the Court declined to appoint a receiver as the facts and circumstances of the case and the conduct of the petitioner did not warrant the same. In the said case, there was a specific provision in the partnership deed that notwithstanding the death or retirement of any partner, the partnership shall continue and the firm shall not be dissolved. According to the deed, the outgoing partner was entitled to his share in the value of the trade name and goodwill of the firm. In the said case, there was a specific provision in the partnership deed that notwithstanding the death or retirement of any partner, the partnership shall continue and the firm shall not be dissolved. According to the deed, the outgoing partner was entitled to his share in the value of the trade name and goodwill of the firm. The intentions of the parties reflected from the provisions of the partnership deed were clear to the effect that the partnership will not be dissolved at the seeet will of any of the partners, rather their intention was that the partnership business would continue notwithstanding the death or retirement of any of the partners. In the said case, though according to the provisions of the partnership deed, the partnership was not at "will", suit was filed by one of the partners for dissolution of the firm and for rendition of accounts the Court considered the application for appointment of Receiver assuming the partnership at Will and it was found on the facts of the said case that there was no material placed on record by the plaintiff showing his apprehension that the property of the firm Mas in danger of being wasted. The conduct of the plaintiff was considered and it was found that he waited for almost eight years to come to the Court after he had been allegedly ousted from the management of the firm. The fact that the plaintiff had waited for almost eight years clearly indicated that there was no emergency or danger or loss demanding immediate action by appointing receiver of the property of the firm. On the facts of the said case, it was found that it was not a fit case for appointment of a Receiver. Said judgment has no application on facts to the case in hand. in the case in hand, Kanhai Ram died on 5/11/1999 and the partnership admittedly being at Will stood dissolved under Section 42 (c) of the Partnership act and the petitioners being the heirs or Kanhai Ram filed the present petition under Section 8 and 11 of the act for appointment of a Receiver for adjudicating the disputes regarding the accounts and settlement of the affairs of the dissolved firm on 16/11/1999, only after a few days of the death Of Kanhai Ram without losing any time. ( 28 ) LEARNED counsel for the respondents has also relied upon another decision in the case of Satish aggarwal and anr. Vs. Subhash Chand Aggarwal and ors. , 2000 (V) AD (Delhi) 889. This case is also not applicable to the facts of the case in hand. It was a case where the petitioner himself was found guilty of embezzlement of huge funds of the partnership firm and sufficient amount was lying in fixed deposits, which could meet the claim of the petitioner. In the said case, soon after the filing of the petition, respondents were restrained from using the properties, assets and funds of M/s Sultan Chand and sons and M/s Premier Book Company for their benefit. The interest of the petitioner thus remained protected by way of this interim measure. The facts of that case also show that during the course of hearing, possible terms for settlement were also considered. In fact an offer was made by the respondents to deposit a sum of Rs. 6. 00 crores in the form of fixed deposit receipts and bank balances in order to safeguard the interest or the petitioner and the petitioner's counsel had accepted the offer on certain conditions. Somehow the settlement could not materialise. On facts, it was found that the petitioner wasrunning a parallel business and large scale withdrawals of cash funds by the father of the petitioners had created heavy imbalance in the firm's funds. The respondents had also invested a huge amount of funds in the partnership. There were also instances of fraudulent conduct of the petitioner, which created obstacles in the smooth running of the business. Under these facts and circumstances, it was found that there was no such emergency or danger or loss demanding immediate action by way of appointment of a receiver. Under the given facts of that case the de-facto possession of the respondents was hot disturbed and with the consent of the parties an arbitrator was appointed, who was expected to give an Award expeditiously in addition to the interim order restraining the respondents from using the properties of the two firms, in order to further protect their interests. The respondents were also directed to deposit the sum of Rs. 6. 00 crores lying in fixed deposits, in Court. The facts of the said case did not warrant the appointment of a receiver. The respondents were also directed to deposit the sum of Rs. 6. 00 crores lying in fixed deposits, in Court. The facts of the said case did not warrant the appointment of a receiver. The said case is no authority for the case in hand learned counsel for the respondents has further placed reliance on the decision in the case of Mohar Singh and anr. Vs. Deen Dayal Gupta and ors. , 65 (1997) DLT 1 (DR ). This case has no application to the facts of the present case. In the said case, the appellant himself was a tenant and he had let out part of the tenanted premises to the respondents and in order to escape eviction on the ground of sub-letting had entered into partnership with the respondents. The partnership deed was held to he a sham document and in the facts of that case, receiver was not appointed. ( 29 ) IN the present case, admittedly the partnership was at Will Which stood dissolved under Section 42 (c) of the Partnership Act on the death of Kanhai Ram who had 31. 66% share in the partnership. The petitioners offer to be joined as partners in place of Kanhai Ram was not accepted by the respondents and the continued the same partnership business by opening a new bank account to the exclusion of the petitioners without settling the affairs of the dissolved firm. Admittedly, these was litigation between Kanhai Ram and the respondents prior to the death of Kanhai Ram. The facts show that even during the life time of Kanhai Ram, respondents were mis-appropriating the income of the partnership firm including that of canteen and cycle stand. It was on account of the respondents mis-appropriating the partnership finds that Kanhai Ram had filed a petition under section 30 of the Indian arbitration Act, 1940 wherein Received) was appointed by the learned Single Judge for the business of canteen and cycle stand. The record also show that even though the main petition under Section 20 of the Indian Arbitration act,1940 was dismissed vide orders dated April, 1998 in view of the bar under Section 69 of the Partnershi in the appeal filed by Kanhai Ram, a Division Bench of this Court had appointed Kanhai Ram as the Receiver for the business of canteen and cycles land on his depositing a sum of Rs. 30,000. 30,000. 00 per month and on another apllication moved by Kanhai Ram, the Division Bench by the same order had issued directions to the respondents to deposit daily cash proceeds or the cinema business in the bank account of the firm and not to make cash payment of any expense exceeding Rs. 1,000. 00. The Division Bench, while passing the said order for appointment or Receiver and issuing directions with respect to the firm income, observed as under : "we need not go into the question whether the appellant was put in possession of the canteen and cycle stand in 1998 soon thereafter for the reason resently noticed. The judgment in the suit was delivered by learned single Judge dismissing the suit on 3/1/1998 and on that very day respondent a letter to the appellant withdrawing aforesaid letter dated 31/3/1998 sent by their counsel. In reply to the application seeking appointment or receiver in respect of cycle stand and the canteen, the case set up by the respondents is that the canteen and the cycle stand have been given out by the partnership firm on a five years terms commencing from april, 1998 to one Smt. Urmila Devi. The further case of the respondents is that in fact the income from the canteen and cycle stand is Rs. 48,000. 00 per annum which is appropriately accounted for in the books of the firm. In short, the case of the respondents is that the canteen and cycle stand have been given out by the Firm at the rate of Rs. 4,000. 00 per month to smt. Urmila Devi. No document which may have been executed has been placed on record. No details of any payment which may have been made by Smt. Urmila Devi have been disclosed. It deserves to be emphasized that Smt. Urmila Devi is none other than the wife of Suresh Gupta who had filed the suit as aforesaid on 10/1/1996. Despite the dismissal of the suit on 3/4/1998, it was the duly and obligation of the partners to deal with the partnership properties as a reasonable and prudent person. It is open to the partners to contend that with the dismissal of the suit they wll shut their eyes to the offer of Rs. 30,000. 00per month and give away the property of the firm at rs. 4,000. 00 per month. It is open to the partners to contend that with the dismissal of the suit they wll shut their eyes to the offer of Rs. 30,000. 00per month and give away the property of the firm at rs. 4,000. 00 per month. The conduct of the respondents in dealing with the partnership property speaks volume about their intentions and the manner in which they want to conduct the partnership business. " ( 30 ) THE Division Bench also observed in the said order that it was clear that the partnersip property was likely to be wasted in the hands of the respondents. This being the conduct of the respondents and the conduct of kanhai Ram being free from blame, Kanhai Ram was appointed a receiver w. e. f. 1/11/98. He complied with the saids order during his life time and had been depositing Rs. 30,000. 00 every month in the firm's amount as against the income of Rs. 4,000. 00 shown by the respondents for the canteen and cycle stand business. Kanhai Ram was a signatory to operate the bank account of the firm. As per directions of the Court no payment of any expense exceeding Rs. 1,000. 00 could be made in cash and a cheque above Rs. 1,000. 00 was to be signed by Kanhai Ram also. Thus there was control of Kanhai Ram also on the day to day income/proceeds of the business. ( 31 ) THE respondents after the death of Kanhai Ram did not act fairly. They refused to settle the affairs of the firm which admittedly stood dissolved at the death of kanhai Ram. The reason being that they did not want to give the share of the deceased partner and on the contrary continued with the business utilizing his share to the exclusion of his estate. They turned down the offer of the petitioners to join them as partners to the extent of kanhai Ram's share and constitute a new partnership. The share of the deceased in the dissolved partnership is being misappropriated and is being used to earn profits to the exclusion of the estate of the deceased. The property of the firm thus in the hands of the respondents' is in danger of being wasted and dissipated. The share of the deceased in the dissolved partnership is being misappropriated and is being used to earn profits to the exclusion of the estate of the deceased. The property of the firm thus in the hands of the respondents' is in danger of being wasted and dissipated. The petitioners, without wasting any time filed the present petition under section 8 and 11 of the Act, i. e. only after a few days from the death of Kanhai Ram. The facts show that the interest of the petitioners is exposed to manifest peril as the property of the dissolved firm is being misappropriated by the respondents to the exclusion of the petitioners. The petitioners have placed enough material on record to satisfy that the property of the dissolved firm is in danger of being wasted and dissipated if immediate action is not taken to protect the same. The petitioners have established a good prima facie title to the share of the deceased Kanhai Ram as on his death in the dissolved partnership firm. From this they have been able to establish that the property of the dissolved firm, the subject matter of this petition will be in danger of being wasted if under the control of the respondents. ( 32 ) LEARNED counsel for the respondents has contended that in fact the conduct of the petitioners is not free from blame as they failed to comply with the orders dated22/10/1998of the Division Bench and failed to deposit the sum of Rs. 30,000. 00 for the months of november and December,1999, despite a notice dated 28/12/1999. The arguments of learned counsel is devoid of any merits and do not convince me. Vide the orders dated 22/10/1998 Kanhai Ram was appointed a receiver for the canteen and cycle stand business on his depositing a sum of Rs. 30,000. 00 per month. Kanhai Ram had in fact been complying with the said order till he died on 5/11/1999. The said order ceased to operate on his death. The said order would not bind the heirs of the deceased. It is surprising that on the one hand the respondents have refused the offer of the petitioners to join them as partners in place of Kanhai Ram and constitute a new partnership firm, whereas on the other hand they expect them to deposit a sum of Rs. 30,000. The said order would not bind the heirs of the deceased. It is surprising that on the one hand the respondents have refused the offer of the petitioners to join them as partners in place of Kanhai Ram and constitute a new partnership firm, whereas on the other hand they expect them to deposit a sum of Rs. 30,000. 00 every month in pursuance of the order dated 28/10/1998 which was not against them. ( 33 ) LEARNED counsel for the respondents further contends that the grievance of deceased Kanhai Ram was only limited to canteen and cycle stand and he had in fact acquiesced in the management and operation of the cinema for the respondents. It is submitted that in view of the acquiescence of the deceased partner, it would not be just or equitable to disturb the position, by appointing a receiver at the instance of the petitioner. The arguments of the learned counsel are fallacious on the face of it. ( 34 ) THE record shows that Kanhai Ram was initially aggrieved about the canteen and cycle stand business but later on when the respondents had started misappropriating even the cinema - income he had moved an application seeking amendment in the main suit No. 1918a/95. Even though that suit was dismissed being not maintainable, on an application moved by Kanhai Ram in the appeal, directions were issued to the respondents to deposit in the bank account of the firm the daily collections of the cinema and not to make cash payments on any expense exceeding rs. 1,000. 00 except by cheque. These directions were issued with regard to the main cinema business keeping in view the fact that Kanhai Ram was one of the signatory for operating the bank account. These facts show that there was no acquiescence of the deceased partner in the running of the main cinema business by the respondents. There was also no delay or latches on the part of the petitioners in filing the present petition, after the death of Kanhai ram. ( 35 ) THE arguments of the learned counsel for the respondents that the rights and interests of the petitioners are adequately safeguarded by the orders of the Division Bench dated 22/10/1998 are also without any force. Saying that the respondents are still not making any expense in access of Rs. 1,000. ( 35 ) THE arguments of the learned counsel for the respondents that the rights and interests of the petitioners are adequately safeguarded by the orders of the Division Bench dated 22/10/1998 are also without any force. Saying that the respondents are still not making any expense in access of Rs. 1,000. 00 in cash in pursuance to the said orders has no meaning. Farlier when the said order was passed, Kanhai Ram was alive and he was one of the signatories to operate the bank account. The respondents are now running the same business by opening a new bank account to which the petitioners are not signatories, nor they are associated with the business in any manner. ( 36 ) TAKING into account the principles laid down by the Madras High Court for appointment of a receiver I do not find anything stated in the said decision which is compulsive for denying the petitioners application for appointment of a receiver. Barring the possible exception of the fourth principle which refers to the de-facto possession of the respondents, the remaining four principles do not stand in the way of petitioners being granted their prayers for appointment of a receiver. Even the fourth principle if properly scrutinized and applied to the facts of the present case will not stand in the way of the petitioners' getting them the relief. In fact, the position of a partner is to be deemed the position of all the partners and, therefore, it cannot be said that the appointment of the receiver will be detrimental to the interests of the respondents. In fact, where a partner excludes another partner from the management of the partnership affairs, there is a case made out. for appointment of a receiver. In the present case, the estate of the deceased Kanhai Ram has been excluded from the management of the partnership affairs and the respondents are running the business of the dissolved firm without settling the accounts and affairs of the firm. As already held above, the petitioners have established a prima facie title to the share of the deceased and the fact that their interest is exposed to manifest peril and the property of the firm is in danger of being wasted and dissipated, if left under the management and control of the respondents. As already held above, the petitioners have established a prima facie title to the share of the deceased and the fact that their interest is exposed to manifest peril and the property of the firm is in danger of being wasted and dissipated, if left under the management and control of the respondents. The petitioners have also established prima facie that the conduct of the petitioners had been fair and free from blame whereas conduct of the respondents had been unfair and detrimental to the petitioners' interest. Thus applying the well established principles, to the facts of this case, I am of the considered view that it would be just and convenient to appoint a Receiver. ( 37 ) I accordingly appoint Mr. P. C. Dhingra, Advocate, 1/c, Lawyers Chambers, Delhi High Court, New Delhi as the receiver. He will take charge of the assets and property of the firm M/s Kalyan Cinema and run its business. The following directions are issued in this respect: 1) The respondents will handover the property and assets of the partnership business including the account books etc. to the receiver. 2) The respondents will bring to the notice of the receiver pending contracts with various parties with regard to the partner ship business including the exhibiting of the films etc. The receiver will make arrangements for executing the pending contracts with the help and assistance of the respondents. 3) The receiver shall make all the recoveries and the respondents will no make any recoveries. They would, however, assist the receiver in making the recoveries. 4) the respondents will not operate any bank account relating to the firm. 5) The respondents will not recover any payment from anyone on behalf of the firm. 6) The receiver shall maintain the accounts. 7) All moneys received by the receiver will be deposited by him in a bank account to be opened for this purpose in his own name. 8) Receiver's fee is fixed at Rs. 7,500. 00 per month which would be the first charge on the income and assets of the partnership. While fixing the receiver's fee, the fact that the receiver would have to devote substantial time to the running of the business, has been kept in mind. 9) Copy of this order shall be sent to the receiver. ( 38 ) IA. NO. 00 per month which would be the first charge on the income and assets of the partnership. While fixing the receiver's fee, the fact that the receiver would have to devote substantial time to the running of the business, has been kept in mind. 9) Copy of this order shall be sent to the receiver. ( 38 ) IA. NO. 11736/99 is an application under Order 39 rules 1 and 2 Civil Procedure Code praying for an interim injunction thereby restraining the respondents from running Kalyan Cinema and from carrying on any similar business by using the firm name or the property of the dissolved firm and from receiving any amount from anyone on behalf of the firm till the disposal of the main petition under Section 8 and 11 of the arbitration and Conciliation Act, 1996. Since a receiver has been appointed to run the business of the firm who would he receiving all the payments relating to the business and operate a separate bank account, no further orders are required to be passed on the injunction application. Both the applications accordingly stand disposed.