A partnership firm of which the petitioner is a managing partner was registered by the respondent No.2 and a certificate of registration was issued. Later some changes in the constitution of the firm were reported and the same were incorporated in the record3. The pethioner is aggrieved of order dated 10 5-2000 (Annex-'A') passed by the respondent No.2 whereby he has proceeded to cancel the firm purporting to act under the provisions of Partnership Act, 1932.
2. Learned counsel for the petitioner contends that the Registrar has no jurisdiction to cancel the registration of the firm and thus the impugned order is without lawful authority. Learned Federal Counsel, on the other hand, states that the petitioner and the said firm is taking undue advantage of the said certificate of registration and is representing before the people that the said certificate authorizes the petitioner to sell and allot land in Islamabad and that several applications/complaints have been received from individuals as well as foreign missions that the innocent people are being deceived and fleeced by the petitioner and his firm. The learned Federal Counsel has further tried to argue that the order passed by the respondent No.2 is covered by section 41 of the Partnership Act, 1932.
3. I have given some thought to the respective contentions of the learned counsel and the learned Law Officer. Now the said Partnership Act of 1932 has been enacted as it was found expedient to define and amend the law relating to partnership. The said law defines a partnership and its natures and how it comes into existence. It then provides for relations inter se the partners and partner and the third party. Then it provides for the introduction, retirement, expulsion of a partner and rights of the outgoing partner. Now Chapter VI containing the said section 41 provides for dissolution of a firm while Chapter VII provides for registration of firm.
4. Now a reading of the entire Chapter VII would show that it is not at all compulsory to get a firm registered for doing business in partnership. On the other hand, section 58 provides for the contents of the application for registration of a firm, the manner of signing and the verification thereof. Section 58(3) provides that the name of the firm shall not contain the words mentioned therein. Now section 59 provides mat where the Registrar is satisfied that the provisions of section 58 have been complied with he shall register the firm.
5. Now section 69 provides for the effect of non-registration and the effect is that a suit of the nature provided in subsections (1) and (2) and a claim of setoff provided in subsection (3) of section 69 shall not be instituted or filed unless the firm is registered and the person suing is shown in the register of firm as a partner in the firm. Now coming to the said section 41 being relied upon by the learned Federal Counsel, this section provides that a firm shall stand dissolved in case all the partners or of all the partners but one are adjudicated upon to be insolvent. The second circumstance leading to the said compulsory dissolution is the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership. The reliance is upon this latter condition. A bare look on the said terms in the light of the illustrations provided to the section would show that the mere fact that while doing a business which otherwise is lawful, the Rules applicable to the same are not being followed would not render it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership. I, therefore, do find that the Registrar-respondent No.2 has no jurisdiction to cancel the registration of the firm.
6. Now coming to the said other contentions of the learned Federal Counsel, my attention has been drawn to some advertisements issued by the petitioner in the national Press. To my mind the said advertisement does go to give impression that the said particulars of the certificate of registration of firm are being given to give the impression as if the petitioner is an authorized Cooperative Society. Be that as it may, the learned counsel for the petitioner has given an undertaking at the bar that a notice in Press shall be given by his clients explaining that the said particulars pertain to the certificate of the registration of the firm under the Partnership Act, 1932.
7. The writ petition accordingly is allowed and the impugned order passed by the respondent No.2 on 10-5-2000 (Annex-'A') is set aside. However, this will be subject to the publication of the notice in the manner undertaken by learned counsel for the petitioner in, at least, two leading Urdu Dailies published in Rawalpindi/ Islamabad, within 30 days of this judgment. No orders as to costs.