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PLD 2007 Karachi 78

Messrs MARVI INTERNATIONAL through Partners vs MUHAMMAD ASLAM and 2

CitationPLD 2007 Karachi 78
CourtSindh High Court
Case No.Suit No,655 of 2005 and C.M.A. No,990 of 2006
Date2006-09-25
Judge(s)Faisal Arab
ResultPlaint rejected

ORDER

1. ' FAISAL ARAB, J.---When the present suit was filed on 19-4-2005, Amir Bux Bhutto and Abdul Rehman were the plaintiffs to the suit. In the plaint they showed themselves to be partners of Marvi International. Admittedly, at that time they said firm was not registered. In the plaint both the partners claimed that on 20-10-1991 they purchased the plot bearing No,C-37, Phase-I, SITE, North Karachi Industrial Area, Scheme No,33, Karachi, admeasuring one acre, from the defendants Nos.1 and 2, the partners of another firm i,e, Komal Enterprises.

2. ' When the present suit was filed, an objection was raised by the office that as the suit has been filed by partners of an unregistered firm, the same is not maintainable under section 69 (2) of the Partnership Act. In the wake of such objection, both the partners got the firm Marvi International registered on 27-4-2005 with the Registrar of Firms. They then moved an application under Order VI Rule 17 seeking amendments in the plaint to the effect that in their place, the name of the firm Marvi International be substituted as plaintiff. The application seeking amendment was allowed by this Court on 5-5-2005 subject to all just exceptions without notice to the defendants as by that time the suit was not yet admitted. On 11-5-2005, amended plaint was filed with the Marvi International as plaintiff to the suit. Summons was then issued to the defendants. The defendants filed their written statement wherein they took the same objection as to the maintainability of the suit. The defendants then also filed an application C.M.A. 290 of 2006 under Order VII, Rule 11 of the Civil Procedure Code, seeking rejection of the plaint on the ground that the suit filed by the partners of an unregistered firm is barred under section 69(2) of the Partnership Act. This order shall dispose of C.M.A. 290 of 2006.

3. For the purposes of disposal of the application filed under Order VII, Rule 11, C.P.C., this Court shall take into consideration only the averments made in plaint and the annexures filed thereto.

4. ' Mr. Abdul Qayyum Abbasi, learned counsel for defendants Nos.1 and 2 argued that suit is barred under section 69 (2) of the Partnership Act and such bar does not stand removed upon the registration of the firm during the pendency of the suit. He therefore submitted that notwithstanding the registration of the firm Marvi International after filing of the suit, the suit is still liable to be dismissed.

5. ' Learned counsel for the plaintiff Mr. Naveed Ahmed Khan on the other hand argued that from the contents of the plaint it is evident that Amir Bux Bhutto and Abdul Rehman have entered into the sale agreement with defendants Nos.1 and 2 and this they have done in their individual capacity and not as partners of Marvi International. He therefore contended that provisions of section 69(2) of the Partnership Act are not attracted at all to the present case and the application filed under Order VII, Rule 11 is liable to be dismissed. He further argued that even otherwise, the registration of the firm during pendency of the suit cures the defect and therefore after registration of the firm the suit cannot be dismissed.

6. ' I shall proceed to first examine the argument of Mr. Naveed Ahmed Khan Advocate that the alleged agreement to purchase the suit plot was entered into by Amir Bux Bhutto and Abdul Rehman in their individual capacity and not as partners of a firm and if that is so then the provisions of section 69(2) of the Partnership Act shall not be attracted.

7. ' Along with the plaint, sale agreement dated 20-10-1991 has been filed as Annexure P-2 wherein Amir Bux Bhutto and Abdul Rehman have been shown as partners of Marvi International. Annexure P-3 is public notice published in daily Jang on 4-10-2004 on behalf of Marvi International, inviting objections from the general public to the transactions between Marvi International and Komal International. Annexure P-10 is letter dated 11-10-2004 written by Marvi International to the Secretary, SITE, Karachi, informing him about the sale' and seeking transfer of the suit plot in the name of the partnership firm. Annexure P-15 is another letter dated 22-10-2004 of Marvi International written to the Secretary, SITE intimating that the membership certificate of the firm shall be produced soon so that the suit plot could be mutated in the name of the partnership firm.

8. Annexure P-18 is yet another letter dated 27-10-2004 of Marvi International to Chief Engineer, SITE wherein the firm has raised objection with regard to certain changes in the shape of the suit plot.

9. All these documents which have been annexed to the plaint show that the purchaser of the suit plot was Marvi International and not Amir Bux Bhutto and Abdul Rehman.

10. ' Thus it has become quite clear from the plaint and its annexures that suit was filed for enforcement of the agreement to sell entered into by the firm Marvi International through its partners. Therefore the suit was undoubtedly for the benefit and in the interest of the firm and thus on behalf of the firm. What more is required to establish that partners entered into the sale agreement not in their individual capacity but on behalf of the firm when they themselves moved application for amendment of the plaint seeking substitution of their names with that of the firm.

11. ' This brings this Court to examine the question whether the bar contained in section 69(2) stands removed upon the registration of the firm during the pendency of the suit. In support of this argument, Mr.Abdul Qayyum Abbasi has relied upon the case of Australasia Bank Limited v. A.

12. Ismailji & Sons reported in PLD 1952 Lahore 314, PLD 1960 Karachi 774 and PLD 1968 Karachi 196.

13. ' In the case of Australasia Bank Ltd. v. A. Ismailji & Sons reported in PLD 1952 Lahore 314 at page 321 it was held as follows: "The wordings of section 69(2) of the Partnership Act lead to one and one interpretation only, that is, a suit brought by an unregistered firm on the basis of a contract shall not be instituted in any Court. A suit is instituted when a plaint is presented to a Court of competent jurisdiction. Section 69(2) of the Partnership Act forbids such a presentation of the plaint unless the plaintiff firm is registered in accordance with law. Wherever a different view has been taken, one has been consciously or unconsciously influenced by the supposed hardship or inconvenience that would be caused if the suit was not allowed to go on after the defect of non-registration had been cured.

14. What appears to have been lost sight of is that there was no suit at all pending before the Court. In some cases, it was pointed out that no prejudice would be caused to the opposite party where the registration of the firm had been effected before the period of limitation had expired. Once that inroad was allowed to be made in the construction of section 69 (2), the logical consequences, as pointed out by Ram Lall, J. In Nazir Ahmad v. People Bank of Northern India, AIR 1942 Lahore 289 would demand that even where the registration was made after the expiry of the period of limitation, the suit should not have been dismissed. This was carrying the matter too far and neutralizing what the legislature intended to emphasize that an unregistered firm should not be allowed to go to Court. The pertinent observations of their Lordships of the Privy Council in Bhagchand v. Secretary of State AIR 1927 PC 176, may be perused in this connection:- "The argument that a statutory provision as to procedure is subject to some exception of cases, where hardship or even irremediable harm might be caused, if it were strictly applied, might be used with equal cogency in connection with a Code fixing the admissibility of evidence or with a limitation section, recognizing rights but barring remedies. For this, however, there is no authority."

15. ' It cannot be denied, and has not been denied, that section 69(2) of the Partnership Act read with an open mind prohibits the institution of a suit by an unregistered firm. It was only on the score of inconvenience or hardship that some other meaning was attempted to be put. This is in violation of the fundamental rules of construction. It would be profitable to refer to Maxwell on Interpretation of Statutes: "A statute is the will of the Legislature, and the fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded 'according to the intent of them that made it'.

16. If the words of the statute are in themselves precise and unambiguous no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the Legislature. The subject of all interpretation of a statute is to determine what intention is conveyed, either expressly or impliedly, by the language used, so far as is necessary for determining whether the particular case or state of facts presented to the interpreter falls within it. When the intention is expressed, the task is one of verbal construction only; but when the statute expresses no intention a question to which it gives rise, and yet some intention must necessarily be imputed to the Legislature regarding it, the interpreter has to determine it by inference grounded on certain legal principles." Vide pages 1 and 2.

17. ' At page 3 it was observed:-- "The first and most elementary rule of construction is that it is to be assumed that the words and phrases of technical legislation are used in their technical meaning if they have acquired one, and, otherwise, in their ordinary meaning; and, secondly, that the phrases and sentences are to be construed according to the rule of grammar. From these presumptions it is not allowable to depart where the language admits of no other meaning. Nor should there be any departure from them where the language under consideration is susceptible of another meaning, unless adequate grounds are found, either in the history or cause of the enactment or in the context or in the consequences which would result from the literal interpretation, for concluding that interpretation does not give the real intention of the Legislature.

18. "When the language is not only plain but admits of but one meaning, the task of interpretation can hardly be said to arise. It is not allowable, says Vattel, to interpret what has no need of interpretation. Absoluta sententia exponsitore non indiget. Such language best declares, without more, the intention of the Lawgiver, and is decisive of it. The rule of construction is 'to intend the Legislature to have meant what they have actually expressed.' It matters not, in such a case, what the consequence may be. Where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the Legislature, it must be enforced, even though it be absurd or mischievous."

19. ' On the rules of construction enunciated above, it is not possible to give section 69 (2) of the Partnership Act the meaning that the plaint might be presented, it might be treated as lying dormant and becoming active only after the firm has been registered and then it might be taken to relate back to the time when it was first presented. An unregistered firm could not bring the suit; the intention of the Legislature is quite clear that an unregistered firm must be subjected to a disability in order to compel registration and that intention should not be allowed to be thwarted or nullified by an interpretation which the words are not capable of bearing."

20. ' In the second cited case of United Cotton Factory, Hyderabad v. Ahmad Khan, PLD 1960 Karachi 774, the Division Bench of this Court at page 778 held as follows:- "The provisions of section 69 of the Partnership Act are mandatory and there is no power of condonation vested in the Courts to grant to the defaulting firm in this respect any relief against the disability imposed by this section. The prohibition contained in the section is against the institution of the suit or the proceedings of the nature mentioned therein and its effect, therefore, has to be determined at the time of the institution of the suit or the proceedings. The section entails a disability on the part of a Court to take cognizance of the suit or proceedings from their very inception in the same way as it would not take the cognizance of a suit barred by limitation or of a suit suffering from a defect of jurisdiction in the form in which it is instituted. The view, which now firmly holds the field, is that the registration of a firm is a condition precedent to its right to institute a suit of the nature mentioned in section 69(2) of the Partnership Act and that a registration after the institution of the suit cannot cure the defect of non-registration existing at the time of the institution of the suit."

21. ' In the third cited case reported as Province of West Pakistan v. Asghar Ali, Muhammad Ali & Co PLD 1968 Karachi 196, the Division Bench of this Court at page 205 of the report held as follows: "The prohibition in section 69 of the Partnership Act is to the institution of the suit itself unless the firm is registered. The prohibition is express and mandatory. It prevents a Court from taking cognizance of a suit brought by an unregistered firm. There is a mass of case-law in support of this view, which is now well established. We do not, therefore, see how we can accept the contention that the subsequent registration of the firm during the pendency of the suit can validate the suit."

22. The first impression of this Court was that non-registration of a firm was a curable irregularity but after examining the above mentioned cases, which are also binding on this Court, this Court is left with no other alternative but to hold that the object of the bar contained in section 69(2) of the Partnership Act is based on the intention of the legislature that an unregistered firm must be subjected to a disability in order to compel registration and such intention should not be allowed to be thwarted or nullified by an interpretation which the words are not capable of bearing. The provisions of section 69(2) of the Partnership Act are mandatory and there is no power of condonation vested in the Courts to grant any relief to a defaulting firm. The effect of such prohibition has to be determined at the very inception in the same manner as the Courts do not take the cognizance of a suit barred by limitation or of a suit suffering from a defect of jurisdiction in the form in which it is instituted. The registration after the institution of the suit cannot cure the defect of non-registration existing at the time of the institution of the suit.

23. ' From the above discussion it is evident that the provisions of section 69 (2) of the Partnership Act are mandatory in character as they prohibit institution of a suit by a partnership firm unless it is registered. In case an unregistered firm files a suit, it would be rendered void and subsequent registration of the firm during the pendency of the suit will also not cure this inherent defect and the suit shall still be liable to be declared as barred under the provisions of section 69 (2) of the Partnership Act.

24. ' In view of the above discussion C.M.A. No,990 of 2006 filed under Order VII, Rule 11 of the Civil Procedure Code is allowed as the suit is barred under section 69 (2)of the Partnership Act.

25. Consequently, the plaint is rejected.

Cited by 5 cases

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