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Judgment
S.P. Goyal, J.—This judgment will dispose of two petitions (C.R. Nos. 144 and 800 of 1987) which have arisen out of similar
circumstances and are between the same parties.
The Respondents filed suit for rendition of accounts against the Petitioner concerning an agreement of paddy shelling entered into on behalf of
the Respondents by Rakesh, one of the partners. The Petitioner on appearance filed an application u/s 34 of the Indian Arbitration Act that there
was an arbitration agreement existing between the parties relating to the dispute, subject matter of the suit and so the suit was liable to be stayed.
One of the objections raised in reply by the Respondents was that the alleged arbitration agreement would not bind the firm and the partners other
than Rakesh as he had no authority to enter into the said agreement. The Petitioner to controvert the plea replied on Exhibit A.4 the power of
attorney executed by the six partners in favour of four persons Ram Kishore, Sham Kishore, Aaaad Kishore and Rakesh. This power of attorney
has no legal value to sustain the plea that Rakesh had the power to enter into arbitration agreement on behalf of the other partners. The power of
attorney had been executed in favour of four persons. It is not stated that they could act severally.
Again, the power of attorney Exhibit A.4 does not contain any clause which authorises the attorney to enter into an arbitration agreement relating
to the business of the firm. According to Section 19(2)(a) of the Indian Partnership Act, a partner has no implied authority to submit a dispute
relating to the business of a firm to arbitration which necessarily means that there has to be an express authority in favour of the partners to enter
into an arbitration agreement. A similar view was taken by Sultan Singh, J. in National Small Industries Corporation Limited Vs. Punjab Tin
Printing and Metal Industries and Others, . No decision to the contrary has been brought to my notice by the learned Counsel for the Petitioner.
There is thus no escape from the conclusion that Rakesh had no authority to enter into the alleged arbitration agreement on behalf of the remaining
five partners and the said agreement therefore, would not bind him There being thus no valid agreement of arbitration binding all the partners, the
order rejecting the application u/s 34 has to be sustained. These revision petition are accordingly dismissed but without any order as to costs.