' MUHAMMAD MUNIR PERACHA J.--- Through this civil revision, the order dated 14-12-2007 passed by learned District Judge, Islamabad, whereby the learned Judge dismissed an application filed by the petitioner under Order VII, Rule 11, C.P.C., for rejection of plaint has been challenged. The Civil Revision was admitted to regular hearing on 27-5-2008. Notice was ordered to be issued to the respondent through courier service at the expense of the petitioner for 13-6-2008. On 13-6-2008, it was ordered that notice to the respondent be repeated through courier service for 3-7-2008. On 3- 7-2008, it was found that respondent cannot be served through ordinary mode. It was directed that it be served through substituted service by publication in daily "The News", Islamabad for 15-9- 2008. The advertisement appeared in daily "The News" in its issue dated 17-7-2008. Despite that none appeared on behalf of the respondent. The respondent was, therefore, proceeded ex parte and the Civil Revision was heard in its absence.
2. The respondent filed a suit for recovery of Rs,11,028,513 with interest against the petitioner under Order XXXVII of the C.P.C. On the basis of 4 dishonoured cheques allegedly issued by the petitioner in favour of the respondent/plaintiff. The petitioner filed an application for permission to appear and defend the suit. The learned trial Court refused to grant permission to appear and defend the suit. However, on an appeal, the learned single Judge of the Lahore High Court, Rawalpindi Bench, Rawalpindi granted permission to appear and defend the suit. Written statement was filed by the petitioner and the learned Trial Judge proceeded to record evidence. Imran Sohail appeared as P.W.1, whereas, Syed Muhammad Imran Shah appeared as P.W.2. Imran Sohail is the Chief Executive of the respondent, whereas, Syed Imran Shah while appearing as P.W.2 stated in examination-in- chief that he is partner of Imran Sohail. Imran Sohail when cross-examined by the learned counsel for the defendant made following statements:-- "The company was having a working partner namely Mr. Imran Shah, who was based in Lahore and all the supplies and purchases and negotiations prior to the contract were done by him. He used to maintain the books of accounts, if any."
"Mr. Imran Shah was working partner and we use to distribute the profit and loss in the ratio of 25- 75%. This was an oral arrangement and no written agreement as such was executed."
"Since we were two partners, the matter was settled from me to him on personal basis. The Mega.
Trading is an assess of the Income Tax department and had a National Income Tax number. This.
Information I will supply by Monday because I do not have the same readily with me today. I am also a tax assessee even personally but I will supply the NTN on Monday."
"In Islamabad office, there was only one employee namely Aslam Malik, who was an office Assistant. As the business of company was run by Imran Shah from Lahore, so he had employed some staff, the details whereof are not known to me as 7/8 years have passed."
3. Syed Muhammad Imran Shah in the examination-in-chief stated that:-- "My partnership with Mr. Imran Sohail is 75% x 25%." In cross-examination, he stated:-- "It is correct that if any money comes out of the present proceedings I will be entitled to 25% of the total, on account of ongoing partnership relationship."
4. After the examination of these two witnesses, the petitioner filed an application under Order VII, Rule 11, C.P.C. For rejection of the plaint filed by the respondent pleading therein that the plaintiff is a partnership firm and being unregistered is not competent to file a suit to enforce right arising from a contract against any third party in view of the section 69(2) of the Partnership Act. The respondent contested the application by filing reply. The learned Trial Judge vide order dated 24- 12-2007, dismissed the application filed by the petitioner. The petitioner thereafter approached this Court through the present Civil Revision.
5. I have heard learned counsel for the petitioner and have gone through the record.
6. From the statements made by P.Ws.1 and 2 reproduced above, it is clear that the respondent- plaintiff is a partnership firm. The learned District Judge while dismissing the application filed by the petitioner opined that the question whether the respondent is a partnership firm cannot be decided before conclusion of evidence of both the parties. In my view, the learned District Judge erred in law in so holding. The respondent-plaintiff has concluded the affirmative evidence. From the evidence brought on the record so far, it is established that respondent is a partnership firm in view section 4 of the Partnership Act, 1932. In case reported as Usman v. Haji Omer and Haji Razzak, PLD 1966 SC 328, it was ruled out by the Honourable Supreme Court of Pakistan:--- "The Partnership Act does not prescribe any special mode for the creation of a partnership which can validly come into being even upon an oral agreement between the partners. Non-registration of the firm under section 69 of the Partnership Act does not affect the validity of the partnership or prevent any of the partners from suing for the dissolution of the firm or for accounts or the realization of the property of a dissolved firm. This section only bars a suit for enforcing a right arising out of a contract against either the firm or any past or present member of it or against any third party."
' Similarly, in case reported as Abdul Gafur v. Dr. Daimulla Ahmed PLD 1951 Dacca 56, it was held that:-- "The Partnership Act does not require that a partner must contribute money or capital; one can become a partner without contributing any capital and may only share profits and need not share any losses."
7. Section 69(2) of the Partnership Act, 1932 provides:--- "No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm."
8. The provisions of section 69(2) were examined by the Lahore High Court in case reported as The Australasia Bank Ltd. v. Messrs A. Ismailji & Sons and others PLD 1952 Lahore 314:-- "The language of subsection (2) of section' 69 leaves no room for doubt that if a suit falling within subsection (2) of section 69 of the Partnership Act is instituted by a firm which is not registered at the time of the institution of the suit, the plaint must be rejected and the subsequent registration of the firm cannot validate the proceedings which were invalid in their inception.
' Courts are not makers but only interpreters of law and cannot water down the effect of a provision of a statute, because the interpretation based on well established principles is likely to work hardships in some cases falling within the plain meaning of that provision.
' It has been consistently held that subsection (2) of section 69 of the Partnership Act is mandatory and makes a suit instituted by an unregistered firm entirely invalid and that subsequent registration of the firm is of no avail."
' In case reported as M. Muthukumaraswani v. Kumar Textiles AIR 1996 Madras 433; Madras High Court held that the provisions of section 69(2) are mandatory and the trial Court must consider whether the suit filed by an unregistered firm is competent even though no objection is taken by the defendant. It was ruled out:-- "Section 69(2) is mandatory and even if the defendant did not take any objection that the firm is not registered, section 69(2) could not be flouted since, it will frustrate the intention of the Legislature. It was expedient to find out whether the plaintiff before the trial Court is a registered firm and whether the person who has filed the suit was a partner on the date of filing the suit."
9. In case reported as "Lokramdas Chatomal Firm and others v. Tharumal Shewaram and others AIR 1939 Sind 206, it was held that the objection regarding registration can be allowed to be taken for the first time in appeal. In case reported as "Sunderial and Sons v. Yegendra Nath Singh an another AIR 1976 Calcutta 471", Calcutta High Court went a step further and held that decree obtained by unregistered firm in contravention of section 69 is nullity and cannot be executed.
10. As has already been mentioned, the suit in this case was filed by the respondent under Order XXXVII of the C.P.C. On the basis of 4 dishonoured cheques. I had a doubt in my mind whether such a suit can be termed to be a suit to enforce a right arising from a contract. I asked the learned counsel for the petitioner to assist me on this point. A paragraph of my order dated 26-4-2008 is reproduced:--- "The suit is based on Bill of Exchange, though, the cheque was issued by the petitioner on the basis of a contract between the petitioner and the respondent to clear the obligation under the contract.
The question arises as to whether this suit can be termed to have been filed to enforce a right arising from a contract within the meaning of section 69(2) of the Partnership act.
11. Learned counsel for the petitioner cited Krishen Lal-Ram Lal v. Abdul Ghafur Khan AIR 1935 Lahore
893. The Lahore High Court held that:--- "Although the provisions of the Contract Act are subject to those of Negotiable Instruments Act, when the contract is embodied in the form of a negotiable instrument, all the same a promissory- note is a specie of contract and consequently a suit to enforce a right arising from such a contract would appear to be within the purview of section 69, Partnership Act. In the absence of any provisions to the contrary, the provisions of the Negotiable Instruments Act, must be taken to be subject to those of the Partnership Act, when a negotiable instrument is executed by or in favour of a firm."
12. After examining the provision of section 69(2) of the Partnership Act, and the precedents cited before me, I have come to the conclusion that the suit filed by the respondent is incompetent. The plaint filed by the respondent is liable to be rejected under Order VII, Rule 11, C.P.C. This civil revision is therefore, allowed, order dated 14-12-2007 of the learned District Judge is set aside and the plaint filed by the respondent is rejected in terms of Order VII, Rule 11, C.P.C. There is no order as to costs.