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Petitioner: ABDUL GHANI VS Respondent: ABDUL RASHIDHonorable Justice Khalid Ali Z. QaziMubarak Ahmed,Syed Asfaq Hussain Rizvi
2008 C L D 1009
2008 C L D 1009
[Karachi]
Before Khalid Ali Z. Qazi, J
ABDUL GHANI and others---Plaintiffs
Versus
ABDUL RASHID and others---Defendants
Suit No.1273 of 2002, decided on 23rd June, 2008.
(a) Partnership Act (IX of 1932)---
----Ss. 43, 44 & 46---Civil Procedure Code (V of 1908), O.XL, R.I---Suit for dissolution of partnership and rendition of accounts---Partnership firm was engaged in developing of Housing Scheme---Nazir of the Court appointed to prepare report about the accounts and assets of the partnership concern, submitted that in spite of repeatedly asking the defendants to produce the accounts of the firm, no such accounts and layout Plan of the Scheme were produced, as such, it was not possible for the Nazir to prepare the accounts of partnership---Record showed that the defendants admitted in their written statement and affidavit-in-evidence and cross-examination that they were conducting the affairs of partnership business as managing Partners but in spite of that admission and the direction of the Court they failed to tender accounts to the plaintiffs and in spite of directions of the Court, they as managing partners, failed to provide and submit accounts of the partnership firm, bank statements, approved plan, allotment orders of the plots in the Housing Scheme and monies received from the allottees of the plots and all the accounts in respect of partnership firm but the managing partner fraudulently, mala fide and dishonestly failed to produce all such accounts and documents---High Court, in circumstances, ordered the office to prepare final decree in terms of O.XX, R.13, C.P.C. and appointed the Nazir as Receiver as well as Commissioner to take over the business and all the assets of the partnership firm moveable or immovable and recover from the defendants including unutilized land of the Housing Scheme (Partnership business) and after taking over all the assets and properties of the partnership firm, he was further directed to sell the same through public auction on 'as is where is' basis and to distribute the sale proceeds amongst the partners in accordance with their respective shares.
(b) Partnership Act (IX of 1932)---
----S.30---Admission of minor in partnership---Scope---Minor may be a partner in a firm with the consent of all the partners for the time being and he may be admitted to the benefits of the partnership.
PLD 1955 Lah. 350 ref.
(c) Administration of justice---
----Technicalities not to create hurdles in way of substantial justice-Principles.
Cases of parties should be decided en merits. If a party upon evidence brought on record, has established his case on merits, then such party should not be knocked out on technical grounds. The technicalities should not create hurdles in the way of substantial justice. Mere technicalities, unless offering insurmountable hurdles, should not be allowed to defeat the ends of justice.
Nasir Hamid Qureshi v. Abbasi Begum 2003 SCMR 1553 rel.
Mubarak Ahmed for Plaintiffs.
Syed Asfaq Hussain Rizvi for Defendants.
Dates of hearing: 20th November, 2007, 5th December, 2007 and 15th January, 2008.
JUDGMENT
KHALID ALI Z. QAZI, J.---This is a suit for dissolution of partnership and rendition of accounts filed by plaintiffs Abdul Ghani and others sons and daughters of Shaban in respect of certain immovable properties consisted of Survey Nos. 254, 255, 264, 288, 291, 292, 299, 300, 482, 483, 484, 485, 486, 496, 497, 513, 514, 516 and 791, Deh Thano, Tappo Thano Taluka and District Malir, Karachi. All such properties have already been mutated in the names of the plaintiffs and defendants according to their shares. The plaintiffs have prayed for judgment and decree to the effect that:--
"(a) to direct the defendants Nos.1 and 2 to tender the account from the very inception of the tenancy of defendant No. i.e. Messrs Shaban Corporation, Suit No.1-4, D/6, Block-7 & 8, Shaheed-e-Millat Road, Karachi from 10-4-1984.
(b) To dissolve the partnership dated 10-4-1984.
(c) To appoint a Receiver.
(d) Cost of the suit.
(e) Any further relief in the circumstances of the case this Honourable Court may deem fit and proper."
2. The case of the plaintiffs as set-up in the plaint is that out of the above properties the defendants Nos.1 and 2 proposed that the properties being Survey Nos.264, 288 and 791 measuring 7 acres and 3 Ghuntas situated in Deh Thano, Tappo Thano, District Malir, Karachi be pooled for purposes of launching a project namely Shaban Town, under the name and style of Messrs Shaban Corporation and the defendant No.9 to be run as a Partnership Concern. In addition to the investment of immovable properties as mentioned above, the parties contributed cash amount according to their shares in the partnership i.e.Rs.20,000 to be contributed by the male members and Rs.10,000 by the female members of the family and a Partnership Deed dated 10-4-1984 has been reduced in writing and duly registered with the Registrar of Firms Karachi and according to such partnership deed each party became partner in partnership business according to their shares in the immoveable properties and cash contribution: On 10-3-1984, in order to run the business of Messrs Shaban Corporation the plaintiffs No.1 and 2 and predecessor of plaintiffs Nos.3 to 13 Mst. Taj Bibi and defendants Nos.2 to 8 have executed a registered General Power of Attorney in favour of defendant No.1. The defendants Nos. 1 and 2 for launching a project i.e. Shaban Town obtained an office on Pugri basis. The defendants No.1 and 2 were paying money out of the proceeds against receipt the accounts of which are kept by them, but the accounts of the firm were never made available to the plaintiffs in spite of repeated requests. The defendants Nos.1, and 2 launched the project after obtaining necessary permission from the relevant authorities and made crores of rupees but never paid a single penny to the plaintiffs nor tendered any account of the business. On account of failure of defendants Nos. 1 and 2 to tender the accounts of the business concern, the plaintiffs served a legal notice on them at their business address, but they refused to accept it. The plaintiffs due to loss of faith are no more interested to continue the partnership and seek dissolution of partnership.
3. The cause of action is shown to have arisen firstly on 10-4-1984 when the partnership was entered into between the parties and on 3-10-2002 when the legal notice was served upon the defendants and since then it continues till the accounts are settled and partnership is dissolved.
4. In response to the summons issued by this Court, defendants filed their written statement through their attorney defendant No.1, wherein it is stated that the said project was not only proposed by the defendants Nos. 1 and 2 but it was proposed by the plaintiffs and defendants as all were running short of money. It is submitted that defendants Nos. 1 and 2 are young, educated and well conversant with the management of business and accounts and have initiative to work for better prospects. It is admitted that the plaintiffs and defendants are the partners of the firm, but added that there is a great difference between sleeping partner and active partner and as such they cannot be at par with each other. It is denied that the account of the firm were not made available to the plaintiffs and they were paid by the defendants more than their share. It is also admitted that by mutual consent of the partners who are real brothers and sisters appointed defendants No.1, who is an educated person and advocate by profession, to manage to dispose of few acres of lands for the prosperity of entire family. It is further submitted that defendant No.1 gave up his legal profession and struggled hard in view of the worst financial condition of the family. It is further stated in the written statement that the market value of the said land is much less than the value as estimated by the plaintiffs in the plaint and they were made more than their shares, being real brother and sisters proper receipts has not been taken regularly, which does not mean that the plaintiffs have been deprived of their legal shares. It is submitted that the total land of the project comprising of 7 acres and three ghuntas, and out of the above land only 3.48 acres have been utilized. The break-up of the utilized land is as under:--
"(a) Plots of 120 sq. yds=12
(b) Plots of 8-0 sq. yds=23
(c) Commercial plots of 80 sq. yds=20
A. Land utilized 13,440 sq. yds.
D. Land utilized 1840 sq. yds.
C. Land utilized 1600 sq. yds.
Total land utilized 16,880 sq. yds."
5. It is denied that the defendants refused any notice issued by this Honourable Court. It is submitted that late Taj Bibi plaintiff No.3 had received approximately double of her share and she has issued receipt of Rs.545,000 and Abdul Ghani has issued receipt of payment of share Rs.1,87,000 and Mrs. Habib had issued receipt of Rs.62,000 these payments are in addition to more payments for which they have not issued receipts as such all the plaintiffs have taken their due shares out of sale proceeds. It is further stated that the plots in question were sold at the rate of Rs. 1000 per sq. yds. Commercial plots, although the rates fixed by KBCA. City District Government were a little more but the plaintiff had to sell the plots on the above said rates as no purchasers were available to purchase the plots more than the said amount. It is also submitted that the defendants Nos.1 and 2 being the acting directors of the company drawing only Rs.12,000 each per month inclusive conveyance and little remuneration and Rs.10,000 for miscellaneous expenses of the company since establishment of project in 1993. It is denied that any instalment against the plots are due as the deal of the plots have almost completed and dissolution of partnership at this stage may create sever hardships to the purchasers of the plots and may disturb the further dealings in progress. It is specifically submitted that the plaintiff No.1 is uneducated person and is under influence of plaintiff No.2, who is real sister of defendants Nos. 1 and 2 and plaintiff No.2 is absolutely under influence of her husband who is instigating the plaintiff No.2 to institute this case only for reacting harassment for getting maximum benefits from in-laws of the defendants. It is also denied that no cause of action has accrued in favour of the plaintiffs against the defendants and prayed for dismissal of suit with compensatory costs.
6. In order to prove the case, the plaintiffs examined Muhammad Azhar Baloch, the attorney of the plaintiffs and son of the plaintiff No.2, who filed his affidavit-in-evidence as Exh. 1 and virtually reiterated the contents of the plaint and asserted that the averments made in the written statement are to be strictly proved by the defendants Nos. 1 and 2 and also examined plaintiff No.3 Muhammad Shoaib son of late Taj Bibi the predecessor of plaintiffs Nos.3 to 13 who filed affidavit-in- evidence as Exh.2 both were cross-examined. The affidavit-in- evidence filed by Muhammad Azhar Baloch Exh.A General Power of Attorney has also been marked as Exh.B photocopy of statement of alleged payment has been produced as Exh.B and photocopy of statement of payment as Exhs. C and D. In cross-examination it was suggested that Partnership Deed can only be dissolved by three contributing male members. The notice was given to the defendants through advocate for the plaintiffs. It was denied that the shares of all the partners were paid. The witness was asked that he is living in the house of his maternal grandmother, which is denied and stated that he is living in his father's house. Muhammad Shoaib, the plaintiff No.3, was also cross-examined and he denied the payment of his mother Taj Bibi, predecessor of plaintiffs Nos.3 to 13 and also denied suggestion that he was paid Rs.2,60,000.
7. The defendant No.1 filed his affidavit-in-evidence as Exh.D. The photocopies of Annexures were not exhibited, as original were not produced. He reiterated the contents of written statement in para-5 of affidavit-in-evidence he introduced a new payment of Rs.2,60,000 to Muhammad Shoaib, plaintiff No.3, and as such he was examined. In para-7 of the affidavit -in-evidence he stated that as Director the defendant No.1 and defendant No.2 as Acting Director were drawing Rs. 12,000 each per month and in addition to the remuneration a sum of Rs. 10,000 towards expenses per month since 1993. He further stated in affidavit-in-evidence that he received Rs.8,00,000 from Mr. Sarwar Shaikh on account of investment of Rs.5,00,000 and Rs.3,00,000 of service charges from incorporation till 1998 and rest of the averments are repeated from the written statement.
8. In cross-examination the following admissions are made by the defendant No.1:--
* He is not on roll of Advocates now;
* Notice under Order XII rule 12, C.P.C. admitted to have been received;
* Partnership Deed admitted;
* Sisters are uneducated and brothers are under Matric;
* Partnership Deed first denied having been got prepared by him then admitted that Partnership Deed was drawn under instructions of defendants Nos. 1, 2 and 4;
* Admitted that the clauses of Partnership Deed were not explained to the other members;
* Admitted that in Para-5 of Partnership Deed Share of male members were 14 Paisa and female members are 5 Paisa;
* Admitted that according to Partnership Deed the share of male members are 12-1/2 Paisa and 6-1/2 for sisters;
* Business started from 1993-94;
* He admitted that there is no other business except the partnership;
* He admitted that office of partnership is being used for computer network;
* He admitted 3 visiting cards Exh.0/4, 0/5 and 0/6 which shows that the premises of office is used by Ghulam Murtaza, Ghulam Sajjad and Ghulam Habib Shaban for their business;
* No contribution is made to the partnership for using premises;
* The telephone mentioned in the cards are of partnership business but no payment is made to the partnership business;
* Telephone bills and Electric charges, mentioned in affidavit-in-evidence are correct and the payments are made by the partnership;
* Brothers and nephews whose cards produced did not contribute to the partnership;
* Witness admitted there were no minutes recorded of meeting of partnership;
* It is admitted that no permission was obtained from other partners for running other business;
* The witness stated that from 1997 till now i.e. 14-2-2005 he has not posed himself as an Advocate;
* He admitted that Safar Jamal lodged a case under sections 468, 471, P.P.C. the F.I.R. No.96 of 2004;
* He admitted that Bail Application was moved by him and in Para-4 of Bail Application he stated that he is an Advocate of KBA;
* The witness admitted that the male members have invested Rs.20,000 and female members Rs. 10,000 which was received by him;
* The witness shows his ignorance whether he opened Bank account of company of the account so received;
* He admitted that no register of account in the office as 'such cannot be produced;
* After the Preliminary Decree the office used only for getting mail;
* The witness admitted that he has not produced any copy of the receipt of monies received from plot holder;
* Witness produced certain account books;
* Witness admitted that Register No.7, Exh.7, pertains to September, 1993 to June, 1994 accounts;
* Other Register pertains to the accounts upto 1999 and these accounts prepared by accountant Hyder Abbas;
* Hyder Abbas left service in 1999 or 2000;
* No accountant appointed after Hyder Abbas;
* Account Books are not signed by the Accountant;
* The witness produced 12 Register as Exhs. 1 to 12;
* The witness admitted that on Exhs. 1 to 12 there are no signatures of the witness, accountant Hayder Abbas or of any concerned person;
* The witness admitted that these Register are one handwriting and in one ink;
* The witness shows his ignorance about Exhs. 1 to 12 whether these are new. register or old;
* The witness denied that these Registers are prepared now;
* The witness admitted no reconciliation accounts were prepared as he is not aware;
* The witness shows his ignorance about maintaining the accounts of firm from 1984 till 93;
* The accounts of Rs.1,60,000 were received in 1984 from the parties cannot be prepared;
* The witness further admitted that the accounts from July, 1999 were not maintained;
* The witness admitted that defendants Nos. 1 and 2 have drawn loan of Rs.8,60,000 and Rs.9,50,000 respectively;
* The witness admitted that no permission or consent of the plaintiffs taken for obtaining above loans;
* He clarified that it was not loan and wrongly mentioned in books as loan;
* The witness admitted that he and defendant No.2 drawing Rs. 14,000 per month each from 1994 and thus total amount drawn by defendants Nos. 1 and 2 comes to Rs.47,94,000 over 14 years;
* The witness had shown his ignorance whether income tax return were submitted or not;
* The witness admitted that Rs.7,50,000 was paid to Faiz Muhammad Palari who has given his office to the company but this account was only for the furniture and specially denied that no Pugri was paid to Mr. Palari but further payment of Rs.7,50,000 is shown in accounts having been paid to Mr. Faiz Palari;
* The witness admitted that the receipts of payment were not confronted to the witness of the plaintiffs;
* The witness admitted that various receipts of payments made through cheques;
* The witness admitted that the female members are illiterate and Pardanashin ladies;
* First the witness stated that the plaintiffs are illiterate and females are Pardanashin and they have not any bank account but thereafter stated he is not aware but no bank reconciliation statement produced to prove the encashment or cheques alleged to have been paid to the plaintiffs;
* The witness failed to produce file of KDA and KBCA in respect of Shaban Corporation as the plaintiff No.1 took all the files three years ago.
* The witness admitted that he received instalments from the allottees;
* The witness admitted that the affidavit-in-evidence was filed after the incident of taken away the files by the plaintiff No. 1;
* The witness admitted that Photostat of documents filed with affidavit-in-evidence in absence of original documents;
* The witness admitted Rs.7,50,000 to Mr. Faiz Palrai before 30-6-1995 on account of furniture;
* The witness shows his ignorance about further payment of Rs.7,50,000 to Faiz Palari. He has returned Rs.8,00,000 to Mr. Sarwar on account of investment and service charges;
* The witness admitted that no partner can be inducted without permission of all the partners;
* The witness further admitted that no permission taken in writing from the plaintiff to induct Mr. Sarwar Shaikh as partner in partnership;
* The witness further admitted that no notice of induction of Mr. Sarwar as partners was given to Registrar of Firms;
* The witness admitted that he has no proof of induction of Mr. Sarwar as partner;
* The witness admitted that he has not produced any original document as per list given in the affidavit-in-evidence;
* The witness admitted that he has not produced documents in respect of allotment of plots and receipt of payment received from the. allottees;
* The witness admitted that the value of the plots comes to Rs.2,06,70,260;
* The witness denied the value of project was Rs.66, 500, 000.
* The witness admitted that the shares of the plaintiffs amounting to Rs. 16,250,000 was not paid to the plaintiffs.
9. I have heard Mr. Mubarak Ahmed Bar-at-Law, learned counsel for the plaintiffs and Mr. Syed Ashfaq Hussain Rizvi learned counsel for the defendants and with their able assistance examined the record and evidence produced by the parties.
10. Mr. Mubarak Ahmed learned counsel for the plaintiff has reiterated the same facts as stated in the plaint, affidavits and counter-affidavits filed by the parties and evidence of the parties, and argued that plaintiffs Nos. 1 and 2 and predecessor of the defendants Nos.3 to 13 Mst. Taj Bibi and the defendants are legal heirs of Late Shaban son of Shamal, who left number of properties which were duly mutated in the name of the parties. He contended that in this suit preliminary decree was passed on 14-4-2004, whereby the partnership firms was dissolved w.e.f. 23-12-2002 and Nazir of this Court was appointed as Commissioner/Receiver in respect of the assets and properties of the partnership firm and to carry out investigation and inquiry including the receivable and to determine the share of each of the partner. Nazir was further directed that after taking accounts from all the partners to determine their respective entitlement in terms of partnership deed and to record evidence. He contended that against the preliminary decree dated 14-4-2004 the defendants filed H.C.A. No.94/2004, which was dismissed in limine. The Nazir recorded the evidence and submitted his report dated 2-8-2007, wherein share is determined as per partnership deed. According to which male members have double share and female members have single share which position was admitted by both the parties. He further contended that despite repeated opportunities to defendant No.1 he failed to produce documents of the accounts and lay out plan in respect of the partnership firm, therefore, the Nazir could not prepare the accounts of partnership firm.
11. Mr. Mubarak Ahmed, learned counsel for the plaintiff further submitted that defendants admitted in their written statement and evidence that defendants Nos.1 and 2 were conducting the affairs of partnership business as Managing Partners but they malafidely and dishonestly failed to tender the accounts to the plaintiff and in spite of direction of this Court the defendant No.1 as Managing Partner failed to provide accounts of the partnership firm, bank statement, approved plan, allotment orders of the plots and sums received from the allottees.
12. Mr. Mubarak Ahmed learned counsel for the plaintiff also argued that according to the defendants they have used only 3-45 acres of land out of 7.3 acres as such rest of 3-45 acres of land remained unutilized. The Nazir of this Honourable Court could not take over the business and assets of partnership firm as the defendant No.1 has not provided the accounts of assets of the firm. He submitted that the alleged payments made to the plaintiffs were not confronted to the witnesses of the plaintiffs and even not proved as provided under the Qanun-e-Shahadat. Therefore, no notice of these payments can be taken. He urged that the defendants Nos.1 and 2 have admitted to have received Rs.12,000 each per month and in cross-examination defendant No.1 admitted to have received Rs. 14,000 each per month without permission or consent of the plaintiffs. The total amount on this score comes to Rs.2,384,000 each from 1994 to 2007, which means both of defendants Nos. 1 and 2 dishonestly appropriated the funds of the firm which amounts comes to Rs.47,68,000. He also contended that the defendants have further shown to have spent the amounts on various accounts such as electricity, Salaries to staff, Telephone General Admin. Miscellaneous, Development, Office Rent, Advertising and publicity, payment to Sarwar Shaikh, Salaries to defendants Nos. 1 and 2 and drawing of partners. He argued that all these expenses are not supported as per requirement of law under Qanun-e-Shahadat and that the office premises was used by the defendants Nos. 1 and 2 and their sons and nephews for their personal business but no payment has been made to the partnership firm this is to be taken notice by Nazir as Receiver. The defendants Nos. 1 and 2 have further drawn Rs.4,000,000 but no other partner has been paid their share. He has further submitted that the defendant No.1 committed fraud, misrepresentation and irregularities whereby the monetary benefits obtained from the partnership. He has prayed that the final decree be passed with a direction to the Nazir to take over the assets of business of partnership firm movable and immovable more specifically the unutilized land and to recover the above amounts from the defendant No.1, as detailed below:--
(i)
Rs.47,68,000
Drawn by defendant No.1 as 2 as salaries.
(ii)
Rs.8,00,000
Paid to Mr. Sharwar Shaikh
(iii)
Rs.40,00,000
Received by defendants No.1 and 2 partner share.
(iv)
Rs. 15,80,000
Drawn by defendant No.1 as expenses.
Total Rs.11,148,000
In addition to the above, the Nazir directed to obtain accounts of all the payments mentioned above from defendant No.1.
Mr. Syed Ashfaq Hussain Rizvi Advocate for the defendants Nos. 1 to 9 have controverted the arguments of Mr. Mubarak Ahmed, learned Advocate for the plaintiff and reiterated the facts as stated in the written statement. Mr.…
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