This petition under section 561-A, Cr. P. C. Seeks quashment of the proceedings of a criminal case under section 406, P. P. C. Started on a direct complaint in the Court of S. D. M. Nazimabad, Karachi.
2. The facts according to this complaint in brief are that the com--plainant and the accused/petitioner had started a partnership concern under the name and style of Paramount Construction Company and Qureshi Traders. The complainant was the financial partner and the accused/petitioner became a working partner. The complainant invested Rs. 1,14,949.94 in the construction company and Rs. 35,000 in Qureshi Traders. The complainant then left for East Pakistan and subsequently that part of the country seceded from West Pakistan. The complainant could not return from East Pakistan and the accused/petitioner is alleged to have converted the entire partnership assets for his own personal use and even transferred some of the assets to a foreign country.
3. It has been argued by Mr. M. I. Memon on behalf of the petitioner that the petitioner was holding the property of partnership in his capacity as a partner and a partner cannot be prosecuted for an offence under section 406 in respect of property received or held on behalf of partnership business; that there was no special agreement entrusting any particular property to him in any other capacity apart from his capacity as a partner. Mr. Memon has relied upon a Full Bench decision of Calcutta High Court reported in AIR 1951 Cal.
69. He has also quoted 1968 SCMR 470 where leave to appeal was allowed and subsequently in the final judgment the appeal was allowed and proceedings quashed, being Appeal No. K-17 of 1969 decided by the Supreme Court against the order passed in Cr. Misc. 179/66 by the Sind High Court. A reference has also been made to a recent decision of this Court reported in Abdul Hakim and 2 others v. The State (PLD 1978 Kar. 359) This Court had observed that a partner cannot be prosecuted under section 406 for withholding the share of the profits which the other partner is alleged to be entitled as the partner or joint owner of the partnership assets but a partner could only be held guilty if there was evidence of actual entrustment of a particular property in his fiduciary capacity. Mr. Memon stated that in this particular case the matter as per partnership agreement was referred to arbitration and an award has actually been made, which has been filed in Court. The arbit--ration proceedings of confirmation of the award are pending.
4. It has on the other hand been argued by Mr. Muhammad Ali Shaikh that in this particular case the facts are distinguishable because the petitioner was only a working partner and all the property or assets had been contributed by the complainant/respondent. That he might even produce evidence to show that before leaving for East Pakistan he had entrusted the concern to the accused/petitioner. However, there is nothing in the partnership agreement filed in this case to suggest that the property of partnership assets were to remain as the property of the complainant/respondent. The entire property was invested and became partnership property.
There is also no documentary evidence in support of the plea of entrustment. It cannot therefore, be said that in this particular case the criminal proceedings would be maintainable. On the other hand the remedy was provided in the partnership deed itself and this remedy has already been availed of by the parties and the case is pending on the civil side of the High Court.
5. Under these circumstances, for the reasons mentioned in detail in the Judgment of this Court in Abdul Hakim and others v. The State the petition is allowed and the criminal proceedings in the Court of A.C.M. Court No. 1, Karachi are hereby quashed.