Item- 3. sg 07-01-2025 Ct. 37 In The High Court at Calcutta Civil Appellate Jurisdiction Appellate Side Commercial Division FMAT (Arbaward) 44 of 2024 CAN 1 of 2024 Gora Chand Sadhukhan & Anr. Versus Amarnath Sadhukhan Mr. Rahul Karmakar Ms. Ishita Kundu …for the appellant No.1 Mr. Chayan Gupta Mr. Souradeep Banerjee Ms. Sanjana Sinha …for the respondent 1. The dispute is between the brothers. The parties are the partners of a partnership business carried out under the name and style of Sadhukhan Enterprise. The plaintiff is the elder brother. It is alleged that during the period of December 2021 and July 2022, the appellant/respondent no.1 has siphoned the money from the accounts of the partnership firm for the purpose of starting of a new proprietorship business of his own name which would be in a direct competition to the business run by the partnership firm. It was also alleged that the appellant has violated the trust and faith reposed upon the appellant for the purpose of conducting the partnership business. 2. In a proceeding initiated under Section 9 of the Arbitration and Conciliation Act, the present appellant has expressed his willingness to dissolve the partnership firm. The said proposal was, however, not accepted by the respondent. However, it is manifestly clear that mistrust and distrust between the parties and it is no more desirable to continue with the partnership business. In fact, the willingness to dissolve by the respondent no.1 can be treated as a notice for dissolution of the firm. The Partnership Act requires the partners to act for the benefit of the firm and not for their individual benefits. Section 16 of the Partnership Act requires that the personal profits earned by the partners from any transaction is required to account for such profit and pay it to the firm. The rights and duties of the partnership are also clearly stipulated in Section 17 of the Partnership Act, 1992. It is not in dispute that during the continuance of the partnership business, the respondent no.1/appellant has started a medical business using the surname of the family i.e. Sadhukhan. The business is also similar to the business being carried on by the partnership firm. 3. There are two partnership firms carried on business of medicine and related products. As mentioned above, because of the mistrust, there is no reason for the parties to carry on the said business and for a partnership at will, the law requires that the firm will be dissolved by any partner giving notice in writing to all other partners of his intention to dissolve the firm. The circumstances for dissolution had happened by reason of the prejudicial conduct and breach of argument as alleged by the respondent and it is an admitted position that as on date both the brothers cannot carry on the said business. Accordingly, for the purpose of dissolution of the business, the date of filing of 2 the application under Section 9 of the Arbitration and Conciliation Act shall be treated as the date for dissolution of the firm. 4. On the dissolution of the firm, every partner or his representative is entitled as against all other partners or representatives to have the property of the firm as applied in payment of the debts and liabilities of the firm and to have the circular distributed amongst the partners or their representatives according to their rights. After the dissolution of the firm, the authority of each of the partners would bind upon and other mutual rights and obligations of the partners continue notwithstanding the dissolution so far as may be necessary to wind up the affairs of the firm and to complete the transaction begun but unfinished at the time of dissolution. Mode of settlement of the account is contemplated under Section 48 of the Indian Partnership Act, 1992. However, the statue mandates that after a firm is dissolved every partner or its representative may in the absence of the contract between the partners to the contrary rested any other partner or representative from carrying on a similar business in the firm name or from using any of the property of the firm for its own benefit until the affairs of the firm is completely wound up. The problem likely to arise that the continuation of the business is of the appellant is rightly to prejudice and affect the distribution process. Both the parties have agreed to the appointment of an arbitrator by this Court without proceeding with the application pending for appointment of an arbitrator. Accordingly, we appoint Mr. Shuvasish Sengupta, Advocate, of the Bar Library Club as an 3 Arbitrator to decide the disputes between the parties. 5. Mr. Sengupta shall fix his remuneration in consultation with the parties at the first sitting. It is needless to mention that all costs, charges and expenses in connection with arbitration proceeding shall be borne by the parties in equal measure. The learned Arbitrator shall be entitled to appoint a personal staff and a stenographer, whose expenses are also to be borne by the parties in equal measure. 6. The learned Arbitrator shall make a declaration in terms of Section 12(5) read with VII Schedule of the Arbitration and Conciliation Act, 1996 before commencement of the arbitration proceeding. 7. Till the arbitration proceeding is commenced and subject to any order that may be passed by arbitrator in this arbitration proceeding, the appellant shall, without prejudice to its rights and contentions, furnish all accounts in relation to its business to the respondent no.1 since there is an allegation that the fund of the partnership was utilized for the purpose of formation and continuation of the business of medicine by the present appellant. The parties shall be at liberty to apply before the learned Arbitrator for any interim measure during the continuation of the arbitration proceeding. 8. Having regard to the fact that the receiver has not yet implemented the order in view of the pendency of the appeal, we modify this order to the extent that the appellant shall be restrained by an order of injunction from carrying out its business concern under the name and style of Sadhukhan until he furnishes all accounts in respect of the proprietorship 4 business month by month as directed by the learned Trial Court and any further direction in this regard that may be passed in the arbitration proceeding. 9. We make it clear that in the event the appellant furnishes all accounts in respect of the partnership proprietorship business month by month from its inception to the respondent as directed earlier the appellant shall be entitled to carry on its business. We further make it clear that the observations made in this order are only for the purpose of deciding this application and shall not influence the learned Arbitrator in deciding the dispute on merits. 10.With aforesaid directions, the appeal and the application stand disposed of. 11.Urgent Photostat certified copy of this order, if applied for, be supplied to the parties upon compliance of all requisite formalities. (Soumen Sen, J.) (Biswaroop Chowdhury, J.) 5