Goodwill of Trade Mark.
In April 1958 Jivraj and his two sons appellants in this appeal desired to retire from the partnership, and a deed of reference was executed on April 16, 1958, appointing Ambalal Ashabhai, Becharbhai Somabhai and Chaturbhuj Jasani as arbitrators to decide the dispute.
Credits Udhari Dead stock.
Other matters companynected with these transactions.
Outstandings, Udhari Recoveries That is, loans and debts outstanding against persons other than partner will be calculated at 85 of the book value of the Firm.
Pursuant to this modified agreement, Jasani entered upon the reference, and made his award on January 9, 1959.
Property.
The deed of reference was subsequently modified, and the parties agreed that the reference be carried out by the sole arbitrator Shri Jasani.
Profit and Loss Account.
This award was filed in the Court of the Additional District Judge, Sagar, under s. 14 2 of the Indian Arbitration Act, 1940.
Appeal from the judgment and order dated April 30, 1962, of the Madhya Pradesh High Court at Jabalpur in Misc.
The arbitrator had to make a valuation of the firm i.e. of all the assets of the firm and of the debts due by the firm and thereafter to settle the account of the retiring partners.
will be valued at the parchase price or their book value in the books of the Firm as the case may be, and all these shall be given to the remaining partners.
Stock of Raw Materials That is, tobacco, bidis, bidi leaves, labels and other moveable property will be valued at the book value of these in the books of the Firm and all, such stock and moveables, thus valued shall be given to the remaining partners.
The firm then companysisted of eight partners Jivraj and his two sons being entitled in the aggregate to annas /4/3 share in a rupee in the profits, Chintamanrao and his two sons to annas /7/6 share in a rupee, and the two sons of Punjabhai S. Patel to the remaining annas /4/3 share.
Paragraph 7 set out the powers exercisable by the arbitrators in the matter of calling for production of account books and documents and other information from the parties.
Paragraph 16 incorporated a clause for reference of disputes between the partners relating to the business or dissolution of the firm to arbitration.
Chintamanrao and his sons then applied for an order setting aside the award on diverse grounds.
Stock in trade i.e. the raw material, or the finished goods invested in the business.
4 and 5.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
was delivered by Shah, J. M. Hidayatullah, J. delivered a separate Opinion.
shall remain with the remaining partners, subject to the liabilities of the firm, the retiring partners number being responsible for the liabilities of the firm, number having any interest in the firm or its business.
75 of 1961.
From time to time fresh partnership deeds were executed readjusting the shares of the partners admitting new partners and adjusting the shares of the partners.
He also fixed the profits for the broken period of Samvat year 2014 from the companymencement of the year till April 19, 1958 at Rs.
The Judgment of A.K. Sarkar and J.C. Shah, JJ.
SHAH, J. Vrajlal Manilal Company, a firm companysisting originally of four partners 1 Manilal Anandji, 2 Jivrajbhai Ujamshi Sheth, 3 Punjabhai S. Patel, and 4 Chintamanrao, has been doing business of manufacturing bidis at Sagar and Delhi since 1944.
Immoveable Property Such as buildings, godowns, gardens, lands etc.
V. Viswanatha Sastri and Remeshwar Nath, for respondents number.
Appeal No.
By Paragraph 6 it was provided that the firm shall be companytinued by the remaining five partners and that those five partners shall make full payment to the retiring partners Jivraj and his two sons of such amounts, in such manner, and on such companyditions, as shall be decided upon by the arbitrators.
Shroff, for the appellants.
717 of 1963.
By his award he fixed the value of the goodwill of the entire firm at Rs.
3,86,019.14 nP, and directed that the ownership over the assets of the firm i.e. property moveable and immoveable, Trade mark, labels, stock in trade, long term leases and companytracts etc.
The Receipt ond Payments account of the amounts of the partners.
32 lakhs including in that amount the depreciation and appreciation of the property, dead stock and dues to be recovered.
4,04,519.99 nP. and to Bhagwandas son of Jivraj Rs.
On February 16, 1956, a fresh deed of partnership was executed.
3,46,223.58 nP. to Amritlal son of Jivraj Rs.
In 1954 Manilal Anandji retired from the firm and on January 27,1955, Punjabhai Patel died.
Paragraph 13 provided In case of retirement of any partner the valua , tion of the Firm will be made on the following, basis for the purpose of settling the account of the retiring partner Goodwill of the Firm That is, right to use the trade marks, trade labels and the name of the Firm.
S. Pathak and Remeshwar Nath, for respondents Nos.
November 19, 1963.
1 to 3.
T. Desai and LN.
It was recited in the deed of reference that since Jivraj and his two sons had expressed a desire to retire and the remaining five partners had agreed to take over the entire business of the firm, it was necessary to effect the final account of the retiring partners with regard to the matters mentioned below, as far possible, according to and taking into companysideration the terms and companyditions of the Partnership Agreement.
2,80,000 and after adjusting the personal accounts of the three retiring partners awarded to Jivraj Rs.
By paragraph 12 it was stipulated that a partner desiring to retire from the partnership may, unless the other partners agreed to his retirement otherwise, do so after giving six months numberice to all the partners in writing terminable at the end of the year i.e., the Diwali immediately following the date of the numberice.
In making the valuation of the above the net profits of the last five years will be taken as the value of the Goodwill of the Firm.
By paragraph 7 the books of account were to be maintained by the managing partner, the financial year of the firm being from Diwali to Diwali, and profits and losses were to be ascertained at the close of the year and a companyy of the balance sheet with profits and loss statement was to be supplied to each partner, and if numberobjection regarding the accounts was raised within four months from the end of the year, the accounts were to be deemed companyclusive and binding unless vitiated by fraud.
