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2006 YLR 2022

WASEEM GUL and anothers vs Rana GHULAM RASOOL and anothers

Citation2006 YLR 2022
CourtLahore High Court
Case No.Regular Second Appeal No,54 of 2003
Date2004-02-26
Judge(s)Muhammad Muzammal Khan
ResultAppeal accepted

' MUHAMMAD MUZAMMAL KHAN, J.---This second appeal assails judgments and decrees dated 28- 10-2002 and 14-5-2003 passed by the learned Civil Judge and learned Additional District Judge, Lahore, concurrently deciding lis against the appellant.

2. Precisely, relevant facts are that respondent No,1 filed a suit for rendition of accounts against the appellants, impleading respondent No,2 as a party (defendant). It was pleaded by respondent No,1 that appellant No,1 being the sole proprietor of Messrs Moon Enterprises (appellant No,2) entered into a partnership business vide deed executed on 20-12-1997 for supply of 70,000 "Cloth Banners" to the Health Department (respondent No,2) for the year 1997-98, to advertise "Polio Day" at the rate of Rs,55 per banner with requisite specification, as tender of the appellants had been accepted/approved by respondent No,2. This partnership agreement dated 20-12-1997 provided equal investment on 50% profit/loss sharing basis and was to continue for one year i.e, till 19-12- 1998 or till the expiry/completion of the supply under tender, above referred, whichever is later. All the accounts and business activities were to be wound up on expiry/ completion of the contract, by sharing of profits/loss and assets/liabilities according to the agreed ratio of 50% between the parties. Accordingly a joint bank account was opened with Punjab Bank in the name of Messrs Moon Enterprises where this firm had also an account, earlier. Respondent No,1 asserted in his plaint that partnership agreement was verbally extended up to 1998-99 and thus the appellants, were liable to render accounts for this extended period. According to the averments in the plaint, 78960 "Polio Banners" of the value of Rs,55 each were supplied during the year 1997-98, whereas 70000 banners were supplied at the rate of Rs,51 per banner, during the year 1998-99 under the same partnership agreement dated 20-12-1997 on the basis of equal investment and that an amount of Rs,17,19,975 was only received in the joint account, which was shared by the parties after paying overhead expenses and that appellants diverted an amount of Rs,47,51,775 to their personal account, malafidely.

3. Appellants being defendants, refuted the assertions in the plaint and denied their liability to render rendition of accounts for the supply of 70000 banners which was made during the year 1998-99. They denied extension of partnership agreement which, according to them, had ended much before 19-12-1998 on completion of supply under the tender for the year 1997-98. It was also pleaded on behalf of the appellants that respondent No,1 contrary to the agreement, invested only Rs,5,63,000 as compared to their investment of Rs,18,39,800 and with this disparity of investment had already received an amount of Rs,12,90,000, which is more than his share, due. Controversial pleadings of the parties necessitated framing of issues and recording of evidence. The learned trial Judge, who was seized of the matter, after doing the needful, decreed the suit of the respondent No,1 granting him a preliminary decree for rendition of accounts vide his judgment and decree dated 28-10-2002.

4. Appellants aggrieved of the decision of the trial Court dated 28-10-2002 filed an appeal before the learned Additional District Judge, but remained unsuccessful, as their appeal was dismissed on 14-5-2003, whereafter they filed the instant second appeal. Respondent No,1, in response to notice by this Court is represented through his counsel, whereas respondent No,2, who is a pro forma party and is not concerned with the rendition of accounts among the appellants and respondent No,1, in spite of service did not appear, hence is proceeded against ex parte.

5. Learned counsel for the appellants submits that partnership between the parties was through a written deed detailing share of investment by them, their share in profit/loss and fixing tenure of joint venture. According to him, after lapse of written agreement between them, it could not have been extended verbally and thus both the Courts below have acted illegally in assuming that period of partnership business stood extended between the parties for another year and that too without evidence to this effect. He further submits that in presence of written agreement neither any new clause therein could be imported on the basis of mere oral assertions nor the Courts were competent to give any other intention to the document except the one which flows out of the document itself. He further submits that relationship between the parties was created through a document and it, under law, has to be strictly construed without giving it any other interpretation or colour. He further elaborates his arguments by saying that though law does not fix any number of witnesses to prove a fact, yet oral evidence could not be relied to bring in another agreement, especially when the dispute could be resolved on the basis of documentary evidence and likewise nonappearance of the appellant No,1 himself in the witness-box was not fatal to his case. He referred to the judgments in the cases of The Bombay Agarwal Co., Akola v. Ramchand Diwanchand and another (AIR 1953 Nagpur 154), Saadli and another v. Ahmed and 5 others (2002 YLR 2789).

6. Learned counsel appearing on behalf of respondent No,1 denied assertions of the appellants, supported the judgments and decrees of the two Courts below and urged that all the supplies made by the parties under partnership agreement were made during the currency of agreement dated 20-12-1997 having been made earlier to 19-12-1998, there was no necessity of further extension of the partnership agreement in writing. He further submitted that a witness of respondent No,1 deposed that appellant No,1 had undertaken that the supplies, as claimed by respondent No,1 in his plaint, will be made under the earlier agreement and they will abide by it and in presence of this unrebutted evidence, his suit has rightly been decreed. Learned counsel appearing on behalf of respondent No,1 strenuously argued that appellant No,1 did not come in the witness-box to refute claim of respondent No,1 and thus a presumption has rightly been drawn against him by the two Courts below, in this behalf, he referred to judgment in the case of Feroz Khan and others v. Mst. Waziran Bibi (1987 SCM R 1647).

7. I have anxiously considered the respective arguments of the learned counsel for the parties and have examined the record appended herewith. The only controversy which hinges for determination is, as to whether agreement dated 20-12-1997 was further extended for another year or not and whether appellants were liable to render accounts for this extended period. Before taking up the legal proposition whether a written agreement could be extended orally and whether the claimed extension is proved by the evidence on the file, I would like to revert to the original agreement and would consider its clauses 2 and 7. Under clause 2, a capital was to be invested equally by both the parties on 50% profit and loss sharing basis and under clause 7, this agreement was to remain valid only till 19-12-1998 or till the expiry/completion of the contract with the Health Department whichever is later. Both these clauses convey that parties agreed to supply of banner under short tender notice, as advertised by respondent No,2 in daily newspaper Nawa-e-Waqt dated 28-11-1997, by investing half of the capital and only till the date given therein or the completion of contract, for which they entered into partnership. In the language of this document after completion of contract with the Health Department, which is not disputed to have been completed before 19-12-1998, it lapsed much before this date. After conclusion of partnership under agreement dated 20-12-1997, this agreement could not continue for any further business between them and they were to execute, on the first hand, some new partnership deed/agreement and on the other hand, to extend it, in accordance with law. Law regarding interpretation of document has settled by this time, whereunder a document has to be construed strictly, without deviating from its terms and without implying anything opposed to the intention of the parties reflected, therein and is against the clear language of the document. In the instant case, there is no stipulation in the document itself for extension of partnership and it does not imply extension orally or through some writing, expressly or by implication. Now after parties having not stipulated any clause for this purpose, Courts were not under any obligation to make any new contract between them. If any law is needed, on this point, a reference can be made to the cases of House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others (1992 SCM R 19), Anjuman-e-Islamia, Sialkot v. Haji Muhammad Younas and 3 others (PLD D 1997 Lahore 153), Ch. Noor Muhammad v. The District Council, Sargodha (PLD 1975 Lahore 896), West Pakistan Industrial Development Corporation, Karachi v. Aziz Qureshi (1973 SCM R 555) and State of Maharashtra and others v. Saifuddin Mujjaffarali Saifi (AIR 1994 Bombay 48).

8. Both the Courts below have assumed extension of partnership between the parties on the basis of oral evidence, which consists of statement of P.W.5 to P.W.8. Though oral evidence to give a different colour to a document or to import some clause which does not exist therein, is not helpful and cannot be used for this purpose, yet in order to satisfy myself as to what they have stated, I have examined their statements. P. V: .5 is Ghulam Ahmed son of Abdul Rehman, who stated that he on 20-10-1998 attended death anniversary of one Captain Nasrullah, who was son of respondent No,1 and after "Faateha" respondent No,1 said that earlier contract is about to end, as such, fresh agreement for another year may be executed, whereon appellant No,1 replied that they will stick to their words hence, there is no need of any new agreement. This witness has not shown as to why and how he attended the death anniversary of son of respondent No,1 and what relationship he had with him. He also did not say a word that he participated in the negotiations. He never remained associated with the partnership business for the year 1997-98 or for the year 1998-

99. He is just a chance witness, who simply overheard the alleged talk and if at all be accepted to be truthful, having explained no reason to depose in support of respondent No,1 said nothing about final decision between the parties. He did not name any other person present at that time whereas, according to him, the above conversation took place at the time of the death anniversary of son of the respondent. P.W.6 is respondent No,1 himself and P.W.7 is Amir Farooq son of Farooq Hussain, who stated that he is doing commission business in Sootar Mandi, Faisalabad, where he occasionally used to meet respondent No,

1. According to him in November, 1998, respondent No,1 needed about 2,50,000 metre cloth, which he bought for him and received his commission amounting to Rs,50,000 through a cheque and signed the counterfoil, which is Exh.P.7/1. This witness has nothing to do with the claimed extension of partnership and if his statement, as it stands, is accepted, he received some commission for purchase of cloth for respondent No,1 in November, 1998 which in itself, does not prove that the purchase was made by both the respondent and appellants for joint business. P.W.8 is Rana Abdullah son of Rana Ghulam Rasool, son of respondent No,1, whose statement shows that he is a graduate and had been doing business along with his father, since before 1995. According to him, he had been receiving payments from respondent No,2 and had been maintaining accounts of the joint business, besides checking of the accounts of the appellants, by him. He further deposed that they had no complaint against the appellants during the subsistence of the partnership. This part of his statement, coupled with his above assertion that he had been checking accounts of the appellants, negatively reflects on the case of the respondent No,1 whereunder it was pleaded that appellant No,1 had been diverting money to their own account to his exclusion. Though this witness himself did not claim to have participated in the negotiations of the alleged extension of the agreement, yet he deposed, contrary to the case set up in the plaint and in the statement of P.W.5, when he said in his examinationin-chief that they undertook supply of alike "Banner" for the year 1996-97 in the name of their own firm i.e, "Royal Corporation", whereafter, for the next year 1997-98 and 1998-99 they entered into a partnership agreement with the appellants. This statement, on the one hand is contrary to the agreement dated 20-12-1997 (Exh.P.1), the plaint and the case tried to be set up in evidence and on the other hand negates the story of the alleged extension of the agreement.

9. Accounts maintained by respondent No,1 or his son (P.W.8) were not brought on the file and have not been proved/produced in evidence. P.Ws.1 and 2 are the marginal witnesses of Exh.P.1, who simply deposed regarding its execution and signing by the parties. P.W.3 Javed Hassan deposed that last cheque, in the joint Bank account, was deposited on 29-11-1998 and produced an un- attested copy of the Bank-statement. Mere deposit of a cheque during the year claimed to have been extended for partnership, ipso facto, does not show that this cheque related to this period because it could be a late payment regarding supplies of the undenied partnership period. Out of the entire evidence of the respondent No,1, statement of P.W.5 is only relevant but there is no independent corroboration of this witness, without which and for the reasons noted above, it cannot be relied for giving judgment that agreement Exh.P.1 was extended through an oral settlement/ agreement. I wonder how the Courts below relied on such evidence to presume that partnership between the parties stood extended. Remarks of the first appellate Court in para.9 of its judgment that "the available evidence on record if meticulously evaluated leads to believe that particularly extension of partnership agreement through an oral agreement did take place" is not only superfluous but is also contrary to the record. I have meticulously examined the evidence and find nothing in it, give a finding contrary to the document Exh.P.1.

10. Though both the Courts below have delivered quite lengthy judgments but those are based on mere conjectures and surmises. It is highly presumptive to hold that since the supplies were made under a new contract before 20-12-1998, those were made jointly. Clause 7 of the said agreement clearly provides that after expiry of the agreement on 19-12-1998 or completion of tender sanctioned at that time, it would come to an end, so it could not be imagined that the supplies were made by them under a deed document. Another aspect of the case is that under clause (2) of the original agreement, both the parties were to equally invest the capital needed for supply of the tender items. Appellants had pleaded in their written statement that respondent No,1 shared disproportionately low to the money invested by them for the year 1997-98. Leaving this assertion aside, I find that there is no evidence on the file to show that respondent No,1 after completion of supply of earlier tender, invested any fresh capital. Under terms of the agreement, none could claim 50% profit, without investing a penny and in his manner, as well, extension of agreement for another year of 1998-99 is not proved. Similarly, assumption that appellants were also holding their exclusive bank account in the same bank where they had opened a joint account, must have diverted certain amounts to their own advantage or that certain amounts were released in favour of M/s Moon Enterprises, which were not credited in joint account, were utilized by the appellants to the exclusion of respondent No,1, are not justified, especially in view of statement of P.W.8, above discussed.

11. Respondent No,1 was the plaintiff before the trial Court and had prayed rendition of accounts on the basis of the alleged extension in the written agreement through oral treaty, without stipulation to this effect in the written agreement, was required to prove through positive evidence his entitlement and his right to the decree claimed. Each party to the proceedings is to succeed at the strength of his own evidence and his suit cannot be decreed on the basis of lapses, if any, in the evidence of his adversaries or due to non-appearance of his opposing party in the witness-box.

Respondent No,1, as noted above could not prove extension of partnership for another year through his oral evidence, which otherwise was not invisible to import a nonexisting clause in the written agreement and his suit could, in no manner, be decreed on account of failure of appellant No,1 to appear in the witness-box. There was sufficient material available on the file to determine right of respondent No,1 to the decree claimed. This Court in a number of cases took the view that mere nonappearance of a party, does not give any right to the other party to the relief claimed. For ready reference, judgments in the cases of Anjuman-e-Islamia, Sialkot and Saadli and another (supra) besides judgment from Indian jurisdiction in the case of The Bombay Agarwal Co. (supra) are of much assistance in this behalf.

12. For what has been discussed above, I am of the considered view that both the Courts below have returned incorrect findings which can in no manner be justified on the basis of evidence available on the record, which has seriously been misread by both of them, reflecting negatively on their judgments which are also opposed to the settled principles regarding interpretation and construction of documents, thus the same are not sustainable, at law. This second appeal is accordingly accepted, judgments and decrees dated 28-10-2002 and 14-5-2003 passed by the learned Civil Judge and learned Additional District Judge, Lahore, are set aside and suit of respondent No,1 is dismissed with costs throughout.

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