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Petitioner: ISMAIL DADA ADAM SOOMAR VS Respondent: SHORAT BANOOHonorable Justice A. S. FaruquiSharifuddin,Fakhruddin
1960 P T D 1194
1960 P T D 1194
[Karachi (Pakistan)]
Before A. S. Faruqui, J
ISMAIL DADA ADAM SOOMAR‑Plaintiff
Versus
SHORAT BANOO‑Defendant
Suit No. 365 of 1956, decided on 3rd June 1960.
(a) Partnership‑----
-----Existence to be determined by initial agree ment, not by subsequent events‑Partnership created for purpose to avoiding heavy incidence of income‑tax‑Not a real partnership.
A partnership involves a legal concept of business resting upon an agreement and is to be determined with regard to the real relationship between the parties. It is not the subsequent happen ings which establish the relationship but the initial agreement.
A partnership created for the ulterior purpose of avoiding the incidents‑of heavy income‑tax is not a real partnership.
(b) Partnership Act (IX of 1932)-----
-----Ss. 4 & 6‑Essentials of partnership.
The essentials of a partnership are : (1) there should be a relationship by agreement between two or more persons (2) that they should run a business with the intention of sharing profits and (3) the business should be run by all or by any one of them acting for all. But whether there is a partnership and whether a person is or is not a partner therein is a question of fact which has to be determined with regard to the real relationship between the parties as shown by all relevant facts taken together.
(c) Benami‑----
-----Burden of proof‑Party setting up benami must prove the plea.
(d) Benami‑---
-----Tests‑Source of consideration money one test.
(e) Benami‑----
------Property purchased by husband with his own money in name of wife ‑Benami‑Doctrine of advancement not applicable in Pakistan.
The English principle of advancement does not apply to India (also Pakistan). No distinction has been made between the cases of Hindus and Muslims on this question. The doctrine of intended advancement in favour of the wife not being applicable in this country, there would be a resulting trust in favour of the husband who provided the purchase money in the absence of proof of contrary intention. The question whether a transfer in the name of the wife for which the consideration was paid by the husband is a benami transaction or amounts to a gift is always one of intention. And the intention to be determined is of the time when the transaction took place. The question which must be squarely answered is : Did the husband intend to make an absolute gift of the property to the wife? In determining the true intention regard must naturally be had to the surrounding circum stances, and the subsequent conduct in so far as it is relevant to the understanding of the initial intention.
A I R 1925 P C 181 and A I R 1915 P C 96 ref.
(f) Benami‑-----
----Presumption of, strengthened if all property purchased by real owner in name of benamidar‑[A I R 1925 Mad. 95 and I L R 48 Cal. 260 ref.].
(g) Benami‑----
-----Motive for benami, of little 'importance‑Motive may be sentimental‑[A I R 1935 Pat. 231 ref.]
(h) Benami‑----
----Possession of document‑Husband and wife living in same house‑Document in wife's possession does not necessarily show that property mentioned in document was hers‑[A I R 1932 P C 13 A I R 1951 Orissa 22 ; A I R 1953 Mys. 89 ; A I R 1945 P C10; A I R 1931 PC 175; A I R 1945 PC 10; A I R 1928 P C 172 and A I R 1937 Lah. 589 ref.]
(i) Benami‑-----
---Possession of property‑Husband and wife living together in property‑Husband leaving house in anger‑Does not indicate that wife was in possession in consequence of an alleged gift in her favour.
(j) Benami‑--
---Small separate property purchased in name of wife in order to get rid of unwanted relations of wife living in the same house with them‑Property, held, not benami.
(k) Benami‑----
----Suit for declaration and possession‑Competent.
Sharifuddin for Plaintiff.
Fakhruddin for Defendant.
Dates of hearing : 18th February 1960; 14th & 22nd April 1960.
JUDGMENT
This is a suit by a husband against the wife praying for declaration that he is the real and absolute owner of the various properties mentioned in the plaint and that the defendant is merely a "Benamidar" or ostensible owner or trustee thereof and for the possession of the same. A declaration is also sought to the effect that the wife was never a partner in the business of Bakers and Confectioners run tinder the name of Ismail D. Adam Soomar & Co.
2. The facts of this unfortunate case which are not really in dispute may be shortly stated. The plaintiff Ismail Adam Sommar was engaged in the family business of Bakery with his father Haji Dada in the same premises in which the present business under the name of Ismail D. Adam Soomar & Co. is being run. This business was started by the grand‑father of the plaintiff in the year 1865 under the name of Adam Soomar & Co. The grand‑father died about the year 1900 and the business came into the hands of plaintiff's father Haji Dada. This plaintiff who is a Kuchhi by caste was married in 1910 with a girl of his own community from whom he had several children. None of these have survived. The plaintiff began to work with his father in this business a year before this marriage.
3. The defendant Mst. Shorat Banoo who was a professional prostitute came to Karachi from Delhi about four months before her meeting with the plaintiff which took place in the year 1921. Her mother who had become old had followed the same profession and so had her elder sister. Having come from Delhi, they took a room on the Napier Road which is said to be the red light area. The plaintiff met Shorat Banoo at a music and dance party in a house in Cincinnatus Town where his other friends had invited her and it was there that she was introduced to the plaintiff. It is plain that the plaintiff got infatuated with this girl almost immediately, with the‑result that he took her out of her profes sional place of abode at the Napier Road and kept her in a separate house which was also situated in Cincinnatus Town. This was in 1921, and he began to pay her Rs. 500 per month besides other expenses. The defendant at that time was about 16 years of age but according to her had followed the profession of singing since she was only 12. This illicit connection lasted till 1923 when the plaintiff married the defendant properly. This marriage was, however, kept secret for sometime and according to the plaintiff it was made public only after the death of his first wife which took place in the year 1925. When this marriage became known, there was a quarrel between the plaintiff and his father on this account with the result that the plaintiff left his father's house in the year 1926 and went to live with the defendant in Cincinnatus Town: He also left the shop. Thereafter followed a period of consider able financial stringency for the couple and several other businesses which the plaintiff did at Karachi did not go very far. It would be best to describe the condition of the parties at this time in the words of the defendant herself : "A few months after the plaintiff came to live permanently with me which was in 1926, some of the friends of the plaintiff gave him some financial assistance and I also sold some of my ornaments and with this money a new Bakery was started by the plaintiff on the Elphinstone Street under the name of Islamia Bakery. This Bakery business failed in 1 years time. We came to such a stage that we were at the point of starvation. Even the clothes were sold and the children from his first wife were, therefore, sent away to their grand‑father."
4. In the year 1930 the plaintiff and the defendant left Karachi and went to Delhi where they lived for about a year. The plaintiff started a Bakery business there which also failed with the result that they left, Delhi and went to Calcutta. There the plaintiff started buying and selling fruits but only after a few days their stay at Calcutta, the plaintiff received a telegram from his fatter asking him to return to Karachi. They did so and the father tried to persuade the plaintiff to give up the defendant and to resume his life with the family. The plaintiff declined that offer. The plaintiff then tried his hands at some other business without much success and the parties were financially in a bad way. Their love, however, endured. The plaintiff's father died in the year 1937. This was followed by a litigation between the plaintiff and his step‑brother and sister which was ultimately compromised in consequence of which the family shop was taken by the step‑brother Ahmad and the plaintiff was to be paid Rs. 50 per month. The plaintiff took another shop where he started his own Bakery business but in the meantime the step‑brother who had taken the family shop was not able to run it well and became the victim of T. B. As the shop was about to be closed, the plaintiff was prevailed upon by the friends of the family to take over the family business which the plaintiff did. This was about the end of the year 1940. The step‑brother died in a few days. After getting into the old premises, the plaintiff started his business under the name of Ismail D. Adam Soomar & Co. and from this point he began to make good and the business prospered.
5. In the year 1942 it appears that due to the fear of war people were removing their families from Karachi and according to the admission of the defendant herself, she was also sent to Delhi for the same reason and it was at Delhi that on the 29th of April 1942, a deed of partnership Exh. 10 was executed. The plaintiff had got this deed prepared at Karachi and took it to Delhi where it was executed in the presence of a Magistrate whose signa ture and‑seal appear on this deed. This partnership was in respect of the Bakers and Confectioners business which the plaintiff had been carrying on and according to this deed the share of the plaintiff and the defendant in the profit and loss of the "New Partnership" was fixed at X respectively i.e. the plaintiff was to have 4 annas in a rupee and the remaining 12 annas was to go to the defendant.
6. The defendant returned to Karachi after sometime and the business continued to prosper so that on the 5th of May 1944, an agreement was entered with one Mrs. Steve for the purchase of her house bearing Survey No. 144 situated in the Garden East Area. At this time the parties were living in a flat in the Regal Mansion. This agreement is at Exh. 13 and it is the defendant who has been shown as the Vendee in this document. The price at which this property was agreed to be purchased was Rs. 25,000. The sale deed of this property was executed and registered on 31st of July 1944, and in this sale deed (Exh. 17) as well the defendant has been shown as the purchaser. After getting possession, the old structure of this property was demolished and a fine building with a guest house and out‑houses was built upon the old site. The cost involved in this reconstruction amounted to about a lakh of rupees according to the plaintiff and about Rs. 40,000 according to the defendant. The building was completed by the end of 1945 and the plaintiff who seemed to have a fine taste and was fond of good living had it furnished through the Continental Furnishing House at an expense of about Rs. 25,000. This house was named Shorat Villa. But all this cost money and successive loans had to be incurred which took long to repay. A brand new Nash car was brought on 30‑9‑49 and a house in Pir Ilahi Bux Colony was purchased on 13‑3‑50 as per Exh. 42. All this was in the name of the defendant. The Pir Illahi Bux Colony house was acquired for the purpose of shifting the mother and other relations of the defendant who had migrated to Pakistan from Delhi after partition and who until then were living at the Shohrat Villa.
7. It was about this time that the course of love between the husband and the wife began to be impaired by more sordid con siderations regarding property and business, over which the defendant began to assert her claim, may be, on the advice of her more calculating relations who naturally stood to gain by it. The first dispute took place in 1949 and the second in 1950 (May) when the plaintiff left the house and the business in sorrow and disgust and went out of Karachi for a while. This was followed by exchange of notices, but ultimately they made up. The next crisis came in 1953 when the plaintiff put out a public notice in the "Dawn" Exh. 24 warning any one who might enter into a deal with the defendant in respect of the properties. This was repudiated by the defendant who published photostat copies of the various documents in support of her claim in the `Nai Roshni' of 24th January 1953 (Exh. 47). They, however, made it up again and began to live together until August 1955, when the final break came. The plaintiff was having kidney trouble and was getting worse day by day and according to him was being neglected by the defendant. He was advised to get himself admitted into a hospital which he ultimately did. There he had to undergo two' major operations and remained there for 4 or 5 months. The defendant did not go to see him in the hospital. The plaintiff says that he learnt in the hospital that the defendant was again going to sell the property and so 'this suit was instituted, on 8‑5‑56 claiming the reliefs set out in the opening part of this judgment.
8. Briefly stated the defence of Shorat Banoo is that the partnership in the Bakery and Confectionery business as repre sented by the partnership deed Exh. 10 is real and was acted upon and by virtue of it she became entitled to th share of the profits in that business ; that the immovable property which is now named a Shorat Villa was purchased with her own money and so was the house in the P. I. B. Colony. She also claims to be the owner of the Nash Car as also of the jewellery kept in the lockers and all the cash either in the safe at home or deposited in the Safe Deposit Vault, as also the other movable properties. She has stoutly denied that she was a benamidar in respect of any of the movable or immovable properties, and of which she claims to be the sole and exclusive owner. The cause of action as stated in the plaint is denied. It is alleged that the suit suffered from the defect of misjoinder of causes of action and that court‑fee paid is insufficient. It is further asserted that the plaintiff's suit is barred by time and also by estoppel.
9. The following issues were framed :‑
(1) Whether the plaintiff is the real owner of the plot of land with bungalow, outhouses and other structures thereon known as Shorat Villa, situate Garden Quarters, Karachi and the defendant is benamidar and/or ostensible owner and/or trustee thereof ?
(2) Whether the plaintiff is the real owner of the plot of land with bungalow and other structures thereon situate in. P. I. B. Colony, Karachi and the defendant is benamidar and/or ostensible owner and/or trustee thereof ?
(3) Whether the plaintiff is the real owner of Nash Car No. KAM 3401 and the defendant is benamidar and/or osten sible owner and/or trustee thereof ?
(4) Whether the plaintiff is the real owner of silver wares, furniture, carpets, radios, refrigerators, fittings and fixtures in Shorat Villa and the cash lying in the safe at Shorat Villa and in the lockers with Habib Bank Ltd. Karachi and the defen dant is benamidar and/or ostensible owner and/or trustee thereof ?
(5) Whether the plaintiff is the sole proprietor of the firm Ismail D. Adam Soomar & Co. and the defendant is not partner in the business there of the said firm ?
(6) Whether the plaintiff is estopped from challenging the rights of the defendant in respect of properties mentioned in issues 1 to 5 ?
(7) Whether the suit is time‑barred ?
(8) Whether the suit is undervalued ?
(9) Has any cause of action arisen to the plaintiff ?
(10) Whether the suit suffers from the defect of misjoinder of causes of action ? If so, what is its effect ?
(11) Whether the suit as trained is maintainable ?
(12) Whether the plaintiff is entitled to any relief ? If so, to what relief or reliefs ?
(13) Whether the defendant is entitled to costs under section 35, C. P. C. ?
(14) What should the decree be ?
10. The question of the partnership was argued first and rightly so because a great deal in the case depends upon this question. I shall, therefore, first deal with Issue No. 5. The case of the plaintiff about this partnership is stated in para. 9 of the plaint and though it is not artistically put, it amounts to this that the plaintiff is the sole proprietor of Ismail D. Adam Soomar and the partnership deed was made for the purpose of avoiding the incidence of taxation and that it was never intended to be acted upon and was never acted upon. It was further stated that no consideration whatever flowed from the defendant towards this contract of partnership. To this the defendant has replied in para. 20 of the written‑statement. She says that she had spent a huge sum of her own money to help the plaintiff and his business during the period of about 16 years, and she had seen the ruinous results of quarrels over the family business and for that reason in or about the year 1941, she requested the plaintiff either to make suitable arrangement for repayment of her money or to transfer in her name the business which was then flourishing. The plaintiff did nothing and the defendant went to Delhi to her mother. In 1942 the plaintiff went to Delhi and persuaded her to enter into partnership with him, which she accepted and the deed was executed accordingly. It is further asserted that this deed was acted upon and the partnership was acknowledged by the plaintiff all along.
11. It is best to refer to the partnership deed itself at this stage. It recites that for sometime past, the first party (the plaintiff) had been carrying on business as baker and confectioner in the name and style of Ismail Dada Adam Soomar Bankers and Confectioners and that he had borrowed Rs. 6,000 for carrying on the said business from various persons two of whom were Mr. P. T. Hingorani and Malik Sardar Ahmad who had both lent a total sum of Rs. 3,000 and at the demand of the said creditors, the second party (defendant) at the request of the first party had discharged the said debt of Rs. 3,000 in consideration of being taken up as partner in the aforesaid business, and the parties had agreed to work in partnership and carry on the aforesaid business in the same name on terms and conditions stated in the deed. In clause 5 of the terms and conditions, the capital of the partnership is shown to be Rs. 4,000 of which Rs. 3,000 is shown to have been contributed as mentioned above by the defendant and Rs. 1,000 by the plaintiff. The share of the profit and loss stated in clause 7 under which is given to the plaintiff and to the defendant. Clause 6 states that any further capital required shall be contributed by the defendant and it would be open to the plaintiff to contribute such sum as he might towards the capital and his contribution would be credited to his capital account. A salary of Rs. 150, p.m. is fixed for the plaintiff for his services for managing and carrying on the partnership business. Clause 11 provides that the accounts of partnership shall be taken half yearly in the months of January and July each year and profits and losses shall be determined. Clause 13 lays down that the plaintiff shall discharge all the liabilities of the old business amounting to about Rs. 2,000 and the defendant shall not in any way be liable for the same.
It would appear from the above recitation that the reason why the defendant was given of the share in the partnership was that she had discharged the liability of the old business to the extent of Rs. 3,000 whereas the contribution of the plaintiff was only Rs. 1,000. This is not the case which was pleaded by the defen dant in her written statement. However, when she came to give evidence and was pointedly asked as to why she had not stated in her written statement that she had advanced a sum of Rs. 3,000 she replied that this was not necessary because this fact was stated in the document itself. She also stated in the examination- in‑chief that it was in 1941 that the plaintiff was able after all to get back the father's shop and he then needed money for this business and asked her for a sum of Rs. 3,000 and she said to him that she will get him the money just as she had spent her money for him before but it was just that be should give her share in the new business ; to this the plaintiff agreed and she then asked her mother's sister who came from Delhi and brought this money and she give this sum of Rs. 3,000 to him. She was confronted with the statement in para. 29 of the written‑statement wherein it was stated that it was at Delhi that she was persuaded to become the partner of the plaintiff, and she replied that this was not correct. She also admitted that she had been sent to Delhi by the plaintiff because this was war time and many families were leaving Karachi.
12. Apart from the fact that I find it extremely difficult to believe that the defendant sent for her mother's sister from Delhi and that she brought this sum of Rs. 3,000, it appears to me even otherwise that this story of the payment of Rs. 3,000 by the defendant as stated in the partnership deed is a myth. The, reason for this advancement as given in the deed is that this was for the purpose of discharging loans of Rs. 3,000 borrowed by the plaintiff from two persons viz. Mr. Hingorani and Malik Sardar Ahmad. Mr. Hingorani has migrated to India but Malik Sardar Ahmed has been examined in this case as P. W. 2 and he has categorically stated that he advanced no such loan to the plaintiff. There is also the evidence of Ardeshar Dinshah who is the landlord of the shop premises, and he has stated that he had advanced Rs. 6,000 to Rs. 8,000 to the plaintiff in the year 1940 or 1941. He is a respectable old man of 73 years and so is Malik Sardar Ahmad. There is also the evidence of C. F. Minwala who has stated that he had given Rs. 12,000 to Rs. 15,000 to the plaintiff in the year 1940 or 1941 when the plaintiff had taken charge of the Bakery business in the premises in which his father used to do it. He had also bought him furniture for his shop. All this money was paid off within a year. He further stated that the plaintiff had got some contract for supplies to the army and that it was for this reason also that he had needed the money. I do not see any cogent reason why these witnesses should come forward and tell lies. That these two Parsi gentlemen should be willing to advance money to the plaintiff is perfectly understandable. This bakery was perhaps the oldest in Karachi and had been started by the grand‑father of the plaintiff as far back as 1865, and apart from the fact that Ardeshar was the landlord of the premises and had been responsible for bringing the plaintiff back to the old shop and that Minwala needed supplies for his hotel, they had also been the friends of the plaintiff's father, and would naturally be willing to help him in order to restore the old business. That this business had considerable reputation and had a place of honour in the estimation of the people of Karachi would appear from the pamphelt Exh.27 published on the occasion of the Diamond Jubilee of this bakery. This pamphlet was produced by the defendant herself and was greatly relied upon by her. It must be remembered that this was an old ancestral business to which the plaintiff was bound to have a deep attachment and it was he who started this business all over again and it was he who was to slave in it and it seems extremely unlikely that he would give of the profits of this business to the defendant for a paltry alleged con tribution of Rs. 3,000. In fact I do not believe the story that the defendant advanced this sum of Rs. 3,000 by getting it from Delhi for the discharge of an alleged debt which itself was non‑existent. I reject this story for another reason also because it is at variance with the plea in 'the written‑statement to which I have referred earlier. If, therefore, the defendant did not advance this sum of Rs. 3,000 the very basis of her share in this business as shown in the partnership deed disappears and I must hold also that there was no consideration for this partnership.
13. Now let me briefly examine the story set up in para 20 of the written‑statement on this point to which I have already referred. The case put forward is that the defendant had spent a huge sum of her own money to help the plaintiff and his business during the period of about 16 years. Let us set what is the evidence in support of it. She has stated in her evidence that at the time when she got married to the plaintiff, she had cash and ornaments of the value of Rs. 25,000. Of this she estimates the ornaments to be of the value of Rs. 7,000 and the cash…
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