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Petitioner: MUHAMMAD BAKHSH VS Respondent: NIZAM DIN
Court Name: Lahore High Court Judge(s): Aftab Hussain, Muhammad Siddiq Title: MUHAMMAD BAKHSH vs NIZAM DIN Case No.: F. A. O. No, 59 of 1972 Date of Judgment:1977-08-30 Reported As: PLD 1978 Lahore 31 Result: Appeal dismissed
JUDGMENT
JUDGMENT ' AFTAB HUSSAiN, J.-The learned trial Court passed a final decree in a suit for dissolution of partnership and rendition of accounts for a sum of Rs, 3,493.07 on the 20th of March 1970 in favour of the plaintiff-respondent and against the present appellant with costs. This decree was set aside on an appeal filed by plaintiff-respondent and the matter was remanded to the learned trial Court by an order dated 1-12-1971 passed by Mian Ghulam Ahmad, Additional District Judge, Gujranwala. 2. Hence this appeal. 3. Muhammad Bakhsh, appellant, and Nizam Din, respondent entered into a partnership agreement in the year 1948 to carry on business in the name of Premier Safe Company. This firm was registered under the Partnership Act. On the 1st February 1955 Nizam Din filed a suit for dissolution of partnership and rendition of accounts. He reproduced the alleged terms and conditions of the partnership in para. 2 of the plaint to the following effect: (1) The parties were to share the profits and be liable to losses in equal shares. (2) They were to invest capital in the business in accordance with their shares. The plaintiff had initially invested a sum of Rs, 6,800, while the defendant-appellant had invested in the beginning a sum of Rs, 3,300, but it was settled that he would make up the deficiency of his investment. (3) The defendant-appellant was required to keep accounts and cash and also deposit money in the Bank in the name of the firm. (4) Accounts were to be rendered in the beginning of each year, but the bulk of the share of profits was to be invested in the business for some time in order to improve it. Only a small share of the profits was to be appropriated by the two partners. (5) The plaintiff was to look after the business of the firm in different cities outside Gujranwala.
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(6) The partnership was agreed to be terminable on one month's notice. 4. It was further alleged that the business was run profitably and each year's profit was invested in it. In the year 1952 the relations between the parties became strained with the result that the defendant turned the plaintiff out without rendering any accounts. The defendant also filed a false complaint under section 406 of the P. P. C. Against the plaintiff which was pending on the date of institution of the suit. On the 19th of December 1953 the parties agreed to refer the matter to arbitration, but the defendant did not fulfil his part of the agreement. Ultimately an arbitration agreement dated 20th June 1954 was executed, but the defendant sabotaged it by prevailing upon one of the arbitrators to agree not to act and he, therefore, showed his inability to act as such. 5. The defendant-appellant in his written statement pleaded that the partnership had come to an end in the year 1950 when the plaintiff after misappropriating considerable amount belonging to the partnership left it. Regarding the allegation about investment he alleged that as would be proved by the plaintiff's letters, he had no money to invest the entire investment was made by the defendant. He invested a sum of Rs, 19,171-01-06 in the beginning and had been later on adding to this investment. Bulk of this investment was misappropriated by the plaintiff on which a complaint under section 406/420, P. P. C. Was filed against him in January, 1953 in which he had been charge- sheeted. It was also alleged that the plaintiff was liable to maintain the accounts, but at the time of termination of the partnership he had taken all the Account Books with him. Reference to arbitration was admitted, but the allegation about the part attributed to the defendant in sabotaging it was denied. In para. 6 it was further said that the defendant did not maintain any account even after dissolution of partnership in the year 1950 since when he had been carrying on the business as its sole proprietor. 6. Issues Nos. 3 and 4 were framed by the learned trial Court on the question whether the partnership had been dissolved and if so, whether the plaintiff was entitled to rendition of accounts, if so, for what period. As stated above, the basis of the dissolution of partnership was Ye misappropriation of a large sum belonging to the firm by the plaintiff. In his statement the defendant disclosed that this sum amounted to Rs, 40,380. This story of misappropriation of the partnership funds was not believed since no documentary or oral evidence was produced in support of this contention except the bare statement of the defendant. The defendant produced some documents to prove that a notice for dissolution of partnership was served by him upon the plaintiff. This evidence was also disbelieved. The learned trial Court took note of certain letters Ms. P. 6 to P. 9, written by the which disproved the story of the relations between the parties being strained or the alleged dissolution. On the other hand they proved that relations between the parties were quite cordial and the parties had been carrying on business of the partnership. The learned Court placed reliance upon a form Exit. P. 1 dated 29-12-1953, to which copious reference will have to be made in the later part of this judgment, which had been jointly submitted by the parties to the Rehabilitation Department for the allotment of the premises of the Premier Safe Company, &h. P. 2 an allotment order dated 25-2-1954 in favour of both the parties, and Exh. P. 10 a certificate of registration of the firm dated 29-1-1951. It was proved beyond any shadow of doubt from these documents that the story that the firm stood dissolved in 1950, was false within the knowledge of the defendant A finding of the subsistence of the partnership was given on Issue No, 3 by the learned trial Court. Under Issue No, 4 it was held that the defendant was the accounting party. His allegation that the plaintiff had taken away the Account Books was disbelieved, As a result of these findings the learned trial Court passed a preliminary decree for dissolution of the partnership and for rendition of Accounts holding the parties to be entitled to equal share in the partnership business. The learned Judge appointed Mian Abdul Hamid, Pleader, as Commissioner to go into the accounts and also as a receiver to manage the business pending the settlement of accounts.
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6-A. The defendant-appellant filed an appeal against this preliminary decree which was dismissed by Mian Muhammad Saleem, District Judge, Gujranwala on the 18th of May 1962 on a similar appreciation of the evidence of the parties. Mian Abdul Hamid, prepared inventory of the machinery and material found at the premises of the firm on the 25th of January 1957. 7. It is clear from the record that the defendant neither produced the accounts before the Local Commissioner nor put in appearance before him. Mian Abdul Hamid at his request was allowed to relinquish his duties as a Local Commissioner on the 25th of May 1964. In his place Mr. Jamil Hassan Manj, Advocate, was appointed. The parties appeared before Mr. Manj where Muhammad Bakhsh reiterated his plea that the Books of Accounts were with Nizam Din, although this plea had been turned down by the learned trial Court earlier. The Local Commissioner submitted a report on the 10th of December 1964 complaining that both the parties were not cooperating with him and were suppressing the truth and both of them are responsible about the loss of the record. This report, so far as the allegations against Nizam Din, plaintiff are concerned was incorrect and was contrary to the finding of the learned trial Court given at the time of passing of the preliminary decree that the defendant was the accounting party and he had to produce accounts. 8. When this report came up before the learned Senior Civil Judge, Muhammad Bakhsh insisted that the burden of proof was on the plaintiff and he himself was legally required to produce evidence in rebuttal. This was opposed by the counsel for the plaintiff. The Court held that as the defendant had been found to be an accounting party, the onus was on him to lead the evidence in support of his plea as to what amount was due to the parties from each other. Ho further observed that the defendant cannot escape his liability by raising the plea that the Account Books were never with him. The defendant was held liable to lead his complete ' evidence "in the form of production of documents etc. And oral evidence and after the close of his evidence", the plaintiff was held to have a right to lead evidence in rebuttal. It appears that Nizam Din had shown lack of confidence on the Local Commissioner, which does not appear to be unjustified in view of the above report blaming him for non-production of the record, but this objection was withdrawn by him. The matter was again referred for inquiry to Mr. Jamil Hussain Manj ride order dated 19-1-1965. After about 1i years the Commissioner gave another report, but the same was considered meaningless by the learned Court and was returned on the 9th of June 1966 with a direction that he should give his finding after recording evidence. He was further directed to act under the C. P. C. And take ex parte proceedings if a party did not put in appearance. The appointment of Mr. Manj was revoked on the 24th November 1966 for his failure to submit any report. Mr. Jamshed Ahmad, Advocate, was then appointed a Local Commissioner. 9. It appears from the record that in spite of the direction of the learned trial Court that the defendant should produce his evidence first, Muhammad Bakhsh applied to Mr. Manj to direct the plaintiff to produce all the documents relied upon by him. A notice as required under Order XII, rule 8 dated 18-5-1965 was also sent to the plaintiff calling upon him to file "all books, papers, letters, copies of letters and other documents in your custody, possession or power containing any entry, memorandum or minute book relating to the matters in question in this suit". An objection was raised to this procedure. In spite of the fact that Muhammad Bakhsh had not produced any evidence and had been dilly dallying, the Local Commissioner observed on different dates that none of the parties wanted to produce evidence. 10. Mr. Jamshed Ahmed was appointed a Local Commissioner after the withdrawal of the order of appointment of Mr. Mani Mr. Jamshed Ahmed recorded the statement of Muhammad Bakhsh on the 19th of February 1967. The defendant denied that he had any accounts, yet he produce Exhs. D. 1 to D. 14, receipts of payment and other documents of the firm Nizam Din, Muhammad Bakhsh. He stated that the amounts paid by these receipts were paid by him from his own source and not by Nizam Din. He further stated that his investment amounted to Rs, 15,871-07-6. In support of this
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statement he relied upon a receipt Exh. D. 14 dated 30th of March 1949 issued by the Pakistan Iron and Steel Syndicate in the name of Messrs Premier Safe Company. Although the firm had started business in 1948, but he insisted that this amount was spent by him alone in the purchase of Iron steel. He also relied upon a copy of the application for allotment of Evacuee industrial concern Premier Safe Company in proof of Rs, 14,871 being his investment. According to him this document was produced by the plaintiff and he (Muhammad Bakhsh) admitted its contents. In cross- examination, questions were put to him on behalf of the plaintiff to prove the incorrectness of these contents, but they were not allowed by the Local Commissioner. However, it transpired that this document was not exhibited. After close of the statement of Muhammad Bakhsb, the plaintiff's evidence was closed under Order XVII, rule 3, C. P. C. The Local Commissioner submitted his report to the Court on the 19th of February 1967 in which he criticized Muhammad Bakhsh. He reported that Muhammad Bakhsh was not in a position to invest Rs, 14,871-07-6 in the firm. According to the Local Commissioner both the parties must have invested this amount. Regarding the form of allotment dated 29-12-1953 which as stated above, was relied upon by Muhammad Bakhsh and which did not bear any exhibit mark, it was reported that in that form this investment was admitted to be that of the defendant. It was, however, observed that all the entries in it were in English language. The defendant had signed on It in English while the plaintiff had signed it in Urdu. He further stated that this form was not exhibited. He criticised the statement of Muhammad Bakhsh in almost all respects and refused to believe him. 11. It may be recalled that the form of application for allotment dated 29-12-1953 was exhibited as Exh. P. 1 in the proceedings before the passing of the preliminary decree by the Court. This form does not appear to have been on the record when the evidence of Mohammad Bakhsh was recorded. The form which was relied upon by Muhammad Bakhsh was found unexhibited by the Local Commissioner. It means that P. 1, the exhibited document had before that been removed from the file. When the file was received in Court, even that unexhibited form was missing. On the 20th of March 1967 the learned counsel for the plaintiff brought this fact to the notice of the learned Judge, who directed the Ahmad to make a search. Since both the counsel stated that it was a mere copy, and could be obtained from the Rehabilitation Department, the counsel for the plaintiff undertook to obtain a fresh copy and to place it on the file. It is apparent from the record that the Ahlmad obtained a fresh copy which was exhibited by the Court as Exh. P. 1. 12. The successive loss of the two documents (that is to say the original copy of Exh. P. 1, which was exhibited by the trial Court prior to the passing of the preliminary decree and the unexhibited copy relied upon by Muhammad Bakhsh, defendant-appellant before Mr. Jamshed Ahmed, Local Commissioner) and the certified copy placed by the Ahlmad on record in 1967 gave rise to certain complications. Muhammad Bakhah submitted some petition to the learned District Judge claiming that the copy obtained in 1967 and exhibited as P. 1 was a forged document. This application is not on this record, but it appears from the arguments addressed before me that instances of interpolations in the columns relating to the investment made and the profits earned, were alleged by Muhammad Bakhsh. According to him the original application for allotment of premises of the factory in the joint names of the parties contained an admission of the plaintiff that the entire investment was made by the defendant-appellant. Similarly it was alleged to be admitted in that application that the profits from the year 1948-1953 were nominal. He alleged that the original copy Exh. P. 1 proved this, while copy exhibited as P. 1 in 1968 with a view to reconstruct the record showed that the main investment was that of the plaintiff-respondent and that the firm had earned huge profits during the earlier years of partnership. It was further stated at the bar that to prove this contention Muhammad Bakhsh had relied upon a copy of the original Rehabilitation form which he himself had obtained from the Rehabilitation Department in the year 1955 and which proved the
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admission of the plaintiff-respondent about all the investment being that of the defendant and the amount of profits in the earlier year being very low. 13. The District Judge called a report from the learned Senior Civil Judge who submitted it on the 24th of July 1967. This report is reproduced below :- "In the case cited above, Sh. Jamshed Ahmed, Advocate was appointed Commissioner by my order dated 7-1-1967 with the direction to file his report by 4-3-1967. The said Local Commissioner had received the file from the Ahlmad against the receipt on 30-1-1967 and had returned the same along with his report on 20-2-1967. ' The next date of hearing in the case was 20-3-1967 when the learned counsel for the plaintiff had stated that a copy of Form No, Reh. VI was missing from the file. Is had accordingly orally directed the Ahmad to search for the same, but the parties counsel had stated that it was a mere copy and could be obtained from the Rehabilitation Department. The counsel had accordingly stated that they would obtain a fresh copy from the Rehabilitation Department and would place it on file, Now it is being contended that a change in Form No, Reh. VI has occurred. It is noteworthy that Muhammad Bakhsh defendant had personally inspected the file on 23-2-1967. I, however, feel that it was the duty of Muhammad Iqbal Ahmad to check the documents at the time when the file was received from the Local Commissioner. Similarly on inspection of the file by the parties he ought to have remained vigilant. It is difficult to give opinion as to whether the original copy has been misplaced by Muhammad Iqbal, Ahlmad, or it has. Been done away with by any one of the parties to the litigation. ' Report submitted :- ' The original complaint of Muhammad Bakhsh defendant along with the explanation of Mr. Muhammad Iqbal, Ahmad dated 18-7-1967 are enclosed." 14. The contents of the first part of the report are supported by the unrebutted averments made by Nizam Din in an application dated 17-7-1968 (page 169 of the file). 15. A case was registered against Nizam Din and his son Saeed Ahmad under sections 380/381, 467/468 and 420/409, P. P. C. Under the order of the learned District Judge. The accused were arrested in that case, but were released on bail after some time. Ultimately they were discharged in that case. 16. In view of the inconclusiveness of the report submitted by Mr. Jamshed Ahmad, another Local Commissioner, namely Mian Muhammad Asad, Advocate was appointed on the 14th of May 1968. For about two months no evidence was recorded. On the 17th of July 1968 the plaintiff-respondent filed a petition for removal of Muhammad Asad and for reappointment of Sh. Jamshed Ahmad as Local Commissioner. It is unnecessary to refer the grounds of this petition which was supported by an a davit. However, notice was ordered to be issued for the 30th of July 1968. On the same date when the above order was passed, the Court by another order directed the Local Commissioner to submit his report by 14th of September 1961. The above complaint application was dismissed on the 30th of July 1%8 for non-deposit of process fee. On the same day it was restored on the protest of the plaintiff that he had not heard the call and that the process fee had already been deposited. Notice was then issued for 14-9-1968. The proceedings before the Local Commissioner were not however stayed. The Local Commissioner submitted his report by the due date with the result that the complaint petition could not be disposed of. 17. The learned counsel for the plaintiff raised an objection on the 6th of August 1968 before the Local Commissioner against the continuance of proceedings and requested for their stay in view of the complaint filed in Court. The Local Commissioner continued the proceedings and recorded the evidence of the defendant. The learned counsel for the plaintiff therefore dissociated himself from the proceedings.
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18. The defendant-appellant produced Shaukat Raza, Clerk of the Settlement Department and he also appeared as his own witness before the Local Commissioner. He proved from the file of the Rehabilitation Department pertaining to the allotment of the premises of Premier Safe Company, a photo stat copy of a certified copy of a document which according to him was in accord with a photostat copy on the Rehabilitation record, The Local Commissioner exhibited this document as Exh. D. W. 1/A. He further stated that the original document was in possession of the police. Muhammad Bakhsh in his statement referred to Exh. P. 1 which was proved on behalf of the plaintiff in the pre-preliminary decree proceedings. According to him this Exh. P. 1 proved his investment to be a sum of Rs, 14,871-07-6-I-Rs, 4,300. This document was removed by Nizam Din through his son Saeed Abmad in collusion with the Ahlmad of the Court, because in addition to proving his investment, it also proved the profit earned by the firm from 1947 to 1953. Nizam Din also removed the original of that Exh. P. 1 from the file of the Settlement Department and substituted there a new document which proved the amount of profits for the same period to be about Rs, 3,00,000. The defendant submitted an application to the District Judge, at whose instance a criminal case was registered against Nizam Din, his son, the Ahlmad and the Settlement Clerk Bashir Hussain. Nizam Din in the meanwhile secured a copy of this forged document and placed it on the civil Court's file in collusion with Muhammad Iqbal. He stated further that he had in his possession a certified copy of Exh. P. 1 obtained by him in 1955 which he had proved before the Deputy Settlement Commissioner who had directed removal of the forged document and reconstructed the Rehabilitation file on the basis of the certified copy produced by him. Muhammad Bakhsh did not make a reference to Exh. D. W. 1/A which as stated above, was a photostat of a photostat copy of a certified copy and was proved by Shaukat Rasa, Rehabilitation Clerk from the file of the Rehabilitation Department. He, however, stated that according to the original Exh. P. 1 his investment was Rs, 19,171-07-6 while Nizam Din had never made any investment. The profit for 1953 was Rs, 10,356, out of which a sum of Rs, 4,478 had already been received by Nizam Din upto 1952 and only a sum of Rs, 1,400 as profit of 1953 remained with him in which the share of Nizam Din was only Rs, 700. He further stated that he started his business after 1953 with a sum of Rs, 6.100, but he could not improve the business on account of the litigation. He had thus earned Rs, 5,000 more. He proved certain other documents also for which no reference is necessary. 19. The Local Commissioner went into the question of genuineness of copy Exh. P. 1 on the Court record as well as Exh. D. W. 1/A produced before him. He found D. W. I/A to be a genuine document and believing the statement of Muhammad Bakhsh he found the plaintiff entitled to a sum of Rs, 3,493,07. 20. Nizam Din filed objections against this report. It was urged that the Local Commissioner had proceeded with the matter notwithstanding that he had been informed about the filing of the complaint application praying for cancellation of his appointment ; that on 6-8-1968 a date on which proceedings were fixed only for attendance of the parties, a direction was given to the parties to produce their evidence although previously the defendant alone was ordered to bring his evidence ; that the Commissioner proceeded to record ex parte evidence on 6-8-1968 that photo-stat copy of Form No, Reh. VI was wrongly relied upon by the Commissioner ; that the Commissioner had acted in collusion with the defendant, and had shown favour to him by finding a sum of Rs, 3,493.07 only as due, whereas he was in fact liable to pay Rs, 3,00,000 ; that true accounts were purposely withheld by the defendant and that even the record produced by the defendant's witness Shaukat Raza, Rehabilitation Clerk was not genuine. 21. The learned trial Court in his order dated 20-3-1970 found all the orders of the Commissioner to be proper. He also held that the Commissioner had rightly relied upon Exh. D. W. 1/A, but he did not elaborate this by discussion from the record. He held that no illegality or material irregularity going to the root of the matter and resulting in gross failure of Justice was brought out against the report.
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Holding that the report was not liable to be set aside he rejected the objections and directed the case to be put up for preparation of the final decree. The same day he passed a final decree in terms of the Commissioner's report directing the defendant appellant to pay Rs, 3,473.07 to the plaintiff. 22. The plaintiff-respondent filed an appeal against this decree, which was allowed by Mr. Ghulam Ahmad, learned Additional District Judge on the 1st of December 1971. He took strong exception to the manner in which the application for removing the Local Commissioner was dealt with by the learned Court. He was also of the view that the Local Commissioner was under a moral obligation to stay proceedings and wait for the orders of the Court on that application. He criticized the order of the Local Commissioner closing the evidence of the plaintiff under Order XVII, rule 3, C. P. C. And held this rule to be inapplicable since no adjournment was sought on the earlier date by the plaintiff nor was the…
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