AIR 1996 SUPREME COURT 2209 ::1996 AIR SCW 2696 ::1996 (2) Arbi LR 1 ::(1996) 2 RRR 586 ::(1996) 2 ArbiLR 1 ::1996 (10) SCC 88 ::1996 (2) CurCC 418 ::(1996) 2 APLJ 81.1 ::1996 (3) All WC 1366 ::1996 (3) ICC 440 ::(1996) 2 LandLR 462 ::1997 (2) BankLJ 224 ::(1996) 5 JT 162 (SC)

Supreme Court Of India

(From : Karnataka)

Hon'ble Judge(s): K. Ramaswamy, G. B. Patnaik , JJ

Partnership Act (9 of 1932) , S.69(3)— Firm - Effect of non-registration - Bar to suit - Dissolution of unregistered firm by mutual consent - Partnership deed containing arbitration clause - Dispute with regard to settlement of accounts, or right or power to realise property of dissolved firm, etc. - Reference to arbitration - Valid, as there is no dispute as regards rights arising from contract of firm. Arbitration Act (10 of 1940) , S.20— Where the parties had already agreed for dissolution of the unregistered partnership by mutual consent, and the partnership stood dissolved, and the partnership deed contained an arbitration clause, the reference to arbitration in terms of agreement regarding working out the right flown from dissolution for settlement of accounts of the dissolved firm or any right or power to realise the property of the dissolved firm etc. would be valid because there would be no dispute as regards right arising from contract of a firm and it would form part of exception engrafted in S. 69 (3) which provides that partner of erstwhile unregistered partnership firm cannot bring suit to enforce right arising out of contract falling within ambit of main part of S. 69 (3). In spite of the defect of non-registration and the prohibition created in the mainpart of non-enforceability of the right arising from a contract, the parties....