1. ' SALEEM AKHTAR, J.-By this order, we propose to dispose of High Court Appeals Nos. 31/83 and 32/83 filed by the appellant against the impugned order, passed by the learned Single Judge dismissing the appellant's application under Order XXX IX, rules I and 2, C.P.C. And Order XL, rule 1, C.P.C. Before hearing the appeals, pre-admission notice was issued to the respondents. Mr. Khalid Anwar appeared for the respondent No, 2 and respondent No, 1 was reported to be out of Pakistan. In this situation, the appellant's Advocate requested that the matter may be heard in his absence as it is not possible to serve him without further loss of time.
2. ' Briefly the facts are that the appellant and respondent No, 1 were partners under a Partnership Deed, dated 1st July, 1970 and carried on business under the name and style of M/s. Cotton and Wool Traders having 50% share each. The partnership was at will. The business of shipping 01 the firm was agreed to be continued in the name of United Oriental Steamship Company. In 1977 the defendant No, I filed a suit in England against the appellant for dissolution of firm and accounts.
3. Thereafter, appellants served a notice, dated 2nd May, 1978 upon the respondent No, 1 intimating that partnership stood dissolved on the service of Writ of summon, dated 1st December, 1977 which was issued in pursuance of an action taken by the respondent No, 1 against the appellant in the High Court of Justice Chancery Division (Group A), titled as lqbal V. Anwar (No, 7228 of 1977). The appellant, however, reiterated that the notice is being served to dissolve the partnership which may have been subsisting between them, taking effect from the service of the notice. On 30th July, 1980, the appellant tiled Suit No, 693/80 praying for declaration that the partnership was dissolved pursuant to the notice, dated 2nd May, 1978 and or alternatively for a decree for dissolution, for accounts, and for appointment of Receiver, and injunction against the respondents. It may be mentioned here, that the appellant filed this suit against the respondents Nos. 1 and 2 and also cited S.Z. Enterprises as defendant No, 3, Admiral Limited as defendant No,
4. These last two mentioned defendants have not been joined in these appeals. The appellant stated in the plaint, that the respondent No, I was in control and management of the entire business, while the appellant remained abroad between 19701980. The business of the United Oriential Steamship Company was nationalised and the assets were taken over by the Government. The list of such assets was also filed with the plaint as Annexure 'IV which inter alia included m.v. Kadir Sheikh and House No, 1/29/A, Amir Khusro Road, Karachi. However, in this list vessel m.v. Basti was not mentioned. The appellant has alleged that the respondent No, 1 utilised the funds of the partnership firm in.Purchasing the shops for scraping purposes, and investing these funds in the ship breaking business in the name of Ilyas Investment Limited, M/s. S. Z. Enterprises and Admiral Limited, and huge profits were earned by the respondent No, 1 from this business. The appellant's main contention which has been pressed in these appeals also, is that the respondent No, 1 had diverted the funds of the Firm in the Companies established by him, and has thus, deprived the appellant from the benefit which he is entitled to recover. The respondents Nos. 1 and 2 filed their written statements and denied these allegations. The respondent No, 1 further pleaded that the present suit is merely a counterblast to his action which has been instituted in London. In fact counter-allegations have been made against the appellant that he has illegally and fraudulently utilised the funds of the partnership in various Corporations set up by him.
4. ' In order to substantiate the contention that the vessels in question have been purchased from the partnership funds diverted by respondent No, 1, it has been stated by the appellant that Polyzynis Corporation Panama the owner of m.v. Basti and Nav'Transport Shipping Ltd., who were the owners of m.v. Kadir Sheikh before sale to respondent No, 2 are totally owned by respondent No, 1 and are in the nature of Benami Companies, and further that these Companies have been set up by respondent No, 1, from the funds which were diverted from the partnership. By this process of logic the appellant has contended that the respondent No, 1 is the real owner of both the ships who has purchased them from the funds of the partnership and, therefore, the appellant is entitled to a share in it. It is on this basis that the appellant sought relief that m v. Adir Sheikh should not be allowed to be scrapped and appointment of receiver of m.v. Basti.
5. ' M. v. Kadir Sheikh was owned by Nay Transport Shipping Ltd. and according to the appellant, this Company was established by respondent No,
1. This ship was purchased by the respondent No, 2 which according to the appellant is a collusive transaction. From the documents that were produced by the parties before the learned Single Judge, it seems that a Transport Shipping Ltd.
6. Was incorporated on 4th September, 1975 and its 99% shares were owned by Godesia Shipping Corporation and one hare was held by Inter Trusting Company Limited. The registered office of New Transport Shipping Limited is at Cyprus with respondent o. 1 and Progressive Company Limited of Cyprus as its directors. The vessel was under a charge for $ 50,000 with B.C.C.I.S.A. Other documents considered by the learned Single Judge were in respect of Ilyas Investment Limited, viz, the forms submitted under the Companies Act in which Sheikh Muhammad Imtiaz son of respondent No, 1 and Razia wife of respondent No, 1 are the shareholders and were Directors of the Company, but they retired on 2nd January, 1982. Thereafter from the Returns it seems that Muhammad Hussain, Haji Abdul Ghaffar and Abdul Sattar Qureshi became the new share-holders.
7. Muhammad Hussain and Haji Abdul Ghaffar were shown as Directors on 2nd January, 1982 in place of the retired Directors. The memorandum of Agreement, dated 2nd November, 1982 under which m.v. Kadir Sheikh was sold by Navy Transport to respondent No, 2 has also been produced which shows that it was duly purchased by it. These documents give the prima facie' impression that although there may be common share-holders and Directors, but it does not show that they were established with the funds of the partnership. A prima facie case, as held by the learned Single Judge, has not been made out, because all the documents which have been produced to establish the ownership of the vessel in question and the incorporation of the Companies, establish that all the companies have separate entities and do not seem to have received any fund of the partnership. There is no material on record, except the statement of the appellant that the partnership funds have been diverted. Merely because certain companies have been formed by the respondent No, 1 or he has certain shares in those Companies, does not lead to the presumption that those Com-iA panics were established by the partnership funds. In order to establish this fact, besides the bare statement, some material of authentic nature, as required at this stage, should have been produced by the appellant. The appellant's contention that the ownership of the vessel was Benami and in fact it was owned by respondent No, 1 who has utilised the partnership funds cannot be accepted on his bare statement. It is correct that at this stage no enquiry into controversial fact can be made, nor the Court can go into the merits of the case, but it does not mean that it absolves a party from bringing prima facie evidence on record to establish his case. In view of these facts, the learned Trial Court has rightly exercised its discretion to reject the application.
8. Mr. Kanwar Mukhtar Ahmed, the learned counsel for the appellant, has referred to a copy of the affidavit filed by the respondent No, 1 before the Court in England and has pointed out that the respondent No, 1 has admitted that he had established respondent No, 2 Company. On this basis, the learned counsel contended that it should be presumed that respondent No, 1 has diverted the partnership funds to the Companies established or owned by him. Promotion of a Company by any person does not lead to the conclusion that he can be termed as its owner. A company has its own separate legal entity from its promoters or share, holders. In this regard Mr. Khalid Anwar has also referred to the same affidavit of respondent No, 1 in which he has denied that he has, ever diverted and partnership fund as alleged by the appellant. The learned counsel for the appellant then referred to the said affidavit of the respondent No, 1 where he has stated that Rs, 48,00,000 are payable to the appellant. However, reading the affidavit as a whole it seems that he has claimed adjustment of this amount in respect of his claims which according to the respondent No, 1 is much higher than this amount. By this averment in the affidavit one cannot presume that the respondent No, I carri6d on his business with the funds of the partnership. These facts can be established by evidence that may be produced by the parties and, therefore, we would refrain from making any further observation in that regard.
9. The learned counsel for the appellant, then contended that the appellant had raised a serious controversy and therefore, injunction should have been granted. A serious controversy can be raised only if a prima faice case is made out. If the plaintiff fails to make out a prima facie case, there can hardly be any ground to allege that a serious controversy has been raised. Mere allegation without producing any prima facie material to substantiate it or pointing out circumstances to justify it can hardly lead to conclusion that substantial controversy has been raised. The allegations made by the appellants cast heavy burden upon him and it was his duty even at this interlocutory stage to at least make out a prima facie case by giving such facts, instances and circumstances which may lead to conclusion that the respondent No, 1 has diverted the partnership funds in the business of the Companies established by him of which he is a share- holder or director. The appellant has failed to do so.
10. ' As regards appointment of receiver of m.v. Basti, the learned Single Judge noted that it is owned by Polyzynis Corporation Panama c/o Nerum Ltd. The appellant has alleged that both these Companies are owned by respondents Nos. 1 and 2. On this basis, the learned counsel presumed that respondent No, 1 is the real owner and these Companies were established by the partnership fund. The appellant did not file any document to show how Polyzynis Corporation and Nerum Ltd., are owned by respondent, No, 1, or that funds were diverted. Except a bare statement n material to prima facie establish these allegations have been brought on record. These two Companies which are alleged to have been established by the partnership fund and one of which is the owner of m.v.
11. Basti have not been joined as defendants in the suit. In the circumstances, the learned Single Judge was justified in rejecting the application under Order XL, r. 1, C.P.C. A Receiver can be appointed I a prima faice title to the property and strong case is made out. Basides this, the applicant has also to establish that there is every likelihood or danger of property being wasted if the Receiver is not appointed and that such appointment is just and convenient. We are also mindful of Order XL, sub-rule (2), C.P.C. Which provides that the Court shall not remove from the possession or custody of the property and person whom any party to suit has not a present right so to remove. From the material brought on record, the appellant has neither succeeded in making out prima facie title to the property, nor he has been able to show that he has a present right to remove the owner of m. v. Basti. In fact the entire exercise of the appellant is indirect through respondent No,
1. In order to succeed, the appellant has to establish firstly that the owners of vessel are no one else except the respondent No, 1, secondly, that the respondent No, 1 has acquired the ownership of the vessel through the funds of the partnership and thirdly, that there is danger of property being wasted. At this stage, in our opinion, the appellant has failed to prima fade establish any of these ingredients. The learned Single Judge has decided both these applications on the basis of material and record produced before him, by exercising his discretion on judicially recognised principles and thus, no interference can be made by the Appellate Court. In cases of exercise of discretion, the Appellate Courts are slow to interfere, but the jurisdiction is not completely fettered. In such matters if the Appellate Court comes to the conclusion that the trial Court has not considered all the relevant materials or has proceeded on the assumption not borne out or justified by material on record, or has applied wrong principle the of law leading to unjust order, Appellate Court would be free to interfere with the exercise of discretion.
12. ' We, therefore, see no force in these appeals which we dismissed in limine.