' FAKHRUDDIN G. EBRAHIM, J.-The respondent No, 1 plaintiff filed a suit against the appellant- Government for recovery of Rs, 25,745 being the amount due for stevedoring services rendered by the respondent No, 1 under agreement between the parties dated 6-8-1959.
2. The defence of the Government was that the bill had been duly paid through a payees' account only cheque in the name of the plaintiff firm sent by post at the firm's address.
3. Admittedly, the said cheque was neither received by nor credited in the account of plaintiff firm for it was received by the respondent No, 2 firm who did not claim to have rendered any service to the Government nor was this firm, the name of which is the same as respondent No, 1 firm, a party to the said agreement dated 6-8-1959. The appellant Government did not produce the copy of the letter forwarding the said cheque or its portal cover or its postal receipt.
4. In these circumstances the Government by an application under rule 168 of the Sind Chief Court Rules got third party notice issued to the respondent No, 2 firm from whom was sought indemnity in the event of a decree being passed against the Government. The respondent No, 2 was then impleaded as defendant No, 2 and its defence was that there was a dispute between the plaintiff and this defendant regarding alleged dissolution of firm and the signature of the defendant No, 2 was obtained on the deed of dissolution by misrepresentation, undue influence and fraud and that this defendant had filed a suit for cancellation of the deed of dissolution. It was further alleged that the defendant No, 2 had detained the amount of the cheque as agent of plaintiff because the amount of the cheque was partnership property and did not belong to the plaintiff exclusively.
5. No evidence was led by defendant No, 2 at the trial.
6. The learned Single Judge decreed the plaintiff's suit against the Government on the ground that the said cheque was not received by the plaintiff and that the Government was obliged to send the cheque to the plaintiff's bankers who were authorised to collect the bill and express instruction given was that payment will be made to the plaintiff's bankers. No finding was given by the learned Judge on the question of liability of the defendant No, 2 firm to refund the amount of the cheque received by this defendant on the ground that the deed of dissolution was a disputed document and a suit filed by the defendant No, 2 was still pending, though this defendant was, according to the learned Judge, apparently not authorised to encash the same.
7. The respondent-defendant No, 2 is unrepresented in this appeal. This defendant was directed to deposit in Court the proceed of the said cheque but it has deposited a sum of. Rs, 10,000 only.
8. During the pendency of this appeal the respondent No, I by an application dated 11-1-1974 prayed for production of additional evidence on the point that no suit for dissolution of the firm as alleged by respondent No, 2 in the written statement was pending and that partnership between respondents Nos, 1 and 2 had been dissolved before 1-4-1959. This application was with consent of the appellant Government and in presence of "respondent No, 2 Azizur Rehman" granted and the respondent No, 1 tiled five documents and sought permission to file 2 more additional documents on the next date of hearing. All these seven documents were exhibited and marked 1 to 7, subject to all just exceptions. These documents are as follows and were referred to at the hearing of the appeal without any objection by the learned counsel for the appellant Government.
(1) Deed of Partnership dated 29th September, 1958.
(2) Deed of agreement dated 17th November, 1959.
(3) Deed of dissolution of partnership dated 21st February, 1959.
(4) Deed of partnership dated 16th March, 1959.
(5) Certificate of the Registrar of Firms Karachi, bearing No, 2026.
(6) Certified copy of plaint in Suit No, 1276 of 1960 filed in the Court of VI Sub-Judge, First Class, Karachi.
(7) Certified copy of the order dated 29-9-1960 made in the aforesaid civil suit.
9. The aforesaid documents disclose that prior to 28-6-1958, the partners in the firm of Messrs A. R.
Khan & Sons were Abdul Rehman Khan father of Azizur Rehman and Hafizur Rehman the respective managing partners in respondents Nos, 2 and 1 firms. This partnership was on the death of the father dissolved and the said two brothers became its partners under deed of partnership dated 29-9-1958. The business of the firm consisted of Stevedores, Ship Chandlers, Steamer Agents, Lightrage Owners, Clearing, Forwarding and Shipping Agents, under the name and style of A. R.
Khan & Sons. By an agreement dated 17-2-1959, the two brothers agreed to dissolve the said firm.
Hafizur Rehman of respondent No, 1 firm took over all the assets and liabilities of the firm including payments due from the Government. Azizur Rehman of respondent No, 2 firm took over the clearing and forwarding business and Hafizur Rehman took over stevedoring business. Both the partners agreed to carry on-these separate businesses under the same name and style, viz. A. R. Khan & Sons with effect from 1-4-1959. This agreement was followed by a formal deed of dissolution dated 21-2-1959, which recited that the two partners had duly settled their accounts and they had no claim against each other. Then came into existence the respondent No, 1 firm in which Hafizur Rehman and his son Shahid were partners with effect from 1-4-1959 with stevedoring as their main business. The respondent No, 1 firm was registered under the Partnership Act on 29-8-1959. During the pendency of this appeal the said Azizur Rehman as well as Hafizur Rehman died and their heirs have been brought on record as respondents Nos, 3, 4, 5, 6, 8, 9, 10, 11 and respondents 7(i) to 7(iv) respectively.
10. The two further documents listed at 6 and 7 in para. 8 above disclose that one Fazlur Rehman had filed a suit being Suit No, 1276 of 1960 in the Court of VI Sub-Judge, First Class, Karachi against Azizur Rehman and Hafizur Rehman for dissolution of the firm of A. R. Khan & Sons, on the allegation that though the plaintiff had retired from the said firm on 8-6-1955, accounts had not been settled and the plaintiff not paid his share. This suit was on 29-9-1960 unconditionally withdrawn by the plaintiff.
11. Mr. Sayeed A. Shaikh, the learned counsel for the appellant Government raised two-fold contentions in support of the appeal. Firstly, it was argued that the Government stood discharged of its liability by delivering the payees' account only cheque in the name of respondent No, 1 at its given address, which was in fact received by Mr. Azizur Rehman who was, to the knowledge of the Government a partner in the said firm and the Government had no knowledge of the dissolution of the respondent No, 1 firm which dissolution was admittedly not notified. In the alternative it was argued that the cheque was wrongly credited by respondent No, 2 in its account and since the respondent had admittedly not rendered any service to the Government, the Government was entitled to be indemnified by the respondent No, 2.
12. Now as to the first contention it may at once be noticed that it was not the case of the appellant Government in its written statement that the cheque was received by a partner in respondent No, 1 firm which gave the Government complete discharge. The limited defence of the Government was that a non-negotiable payees' account only cheque payable to respondent No, 1 was sent at the given address of the respondent No, 1 and since this cheque was encashed by a wrong party, namely, the other firm of A. R. Khan & Sons the plaintiff's remedy was to pursue its claim against that party instead of falsely implicating the Government. Admittedly, it was the respondent No, 1, which as aforesaid came into existence on 1-4-1959, had rendered services to the Government under agreement dated 6-1-1959 and if this respondent tailed to receive from he Government its dues, the Government cannot, to my mind, escape its liability. The fact that the cheque fell into wrong hands is of no concern to the plaintiff in the absence of any collusion or conspiracy with the third party. The plea in the present appeal that the cheque was received by Azizur Rehman, a partner in a dissolved A firm, the dissolution of which was not notified is also misconceived for the respondent No, 1 firm came into existence on 1-4-1959 in which Azizur Rehman had no interest and the contract with the Government which gave rise to the suit liability is dated 6-8-1959. It was the duty of the Government to ascertain, in protection of its interest the names of the partners in the firm with which it was entering into a contract and if they had taken that precaution they would have found that its only partners, were Hafizur Rehman and his son Shahid. The cheque in question was, therefore, not received by a partner of respondent No, 1 firm nor by partner of a dissolved firm with which the Government had entered into the contract in question.
13. Coming to the alternate argument of Mr. Shaikh, it stands established that Azizur Rehman had no right to receive the cheque in question and to credit it in his account for neither he nor his firm, the respondent No 2, was party to the agreement dated 6-8-1959, nor they had rendered any services thereunder. The respondent No, 2 stated in the letter dated 2-7-1960 addressed to the Government that the said cheque was inadvertently collected by them and that they were prepared to refund the same. Later on, however, Azizur Rehman in his written statement took up the position that the amount of the cheque was partnership property which did not exclusively belong to the plaintiff. Azizur Rehman, however, admitted that he had executed a deed of dissolution but alleged that his signature was obtained fraudulently. Lf, therefore, this deed continued to hold the field, neither Azizur Rehman nor the respondent No, 2 will have claim over the assets of the dissolved firm, which were admittedly taken over by Hafizur Rehman. This deed of dissolution remains unchallenged and, therefore, even if the cheque represented asset of the dissolved firm, which in fact is not the case for it is the amount of the firm which subsequently came into existence on 1-4-1959, the respondent No, 2 or Azizur Rehman had not the slightest right to receive much less collect the proceeds of the said cheque. The Government is, therefore, entitled to be indemnified by the estate of late Azizur Rehman for having wrongly received it from the Government. There will, therefore, be a decree in favour of the appellant against Azizur Rehman, recoverable from his estate for the amount which the Government is called upon to pay the respondent No, 1 plaintiff.
That such a decree can be passed in this appeal is clear from the law laid down in the cases Messrs S. M. Yusuf & Bros v. Mirza Muhammad Mehdi Pooya and another (1) and Haji Moosa Haji Owner v. Ahmed Abdul Ghani and another (2).
13. The result, therefore, is that this appeal is dismissed with costs and on payment of the decretal amount by the Government to the respondent No, 1 plaintiff, the Government will be at liberty to withdraw from the Court the sum of Rs, 10,000, deposited by respondent No, 2 and for the difference, viz. The decretal amount paid to the appellant, less Rs, 10,000, will follow a decree in favour of the Government against the respondent No, 2, recoverable from the estate of deceased Azizur Rehman.
(1) PLD 1965 SC 15 (2) PLD 1968 Kar. 320