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1989 SCMR 1901

Chaudhry FAZAL HUSSAIN vs BARKAT ALI and 2 others

Citation1989 SCMR 1901
CourtSupreme Court of Pakistan
Case No.Civil Petitions for Leave to Appeal Nos.205/R and 206-R of 1989
Date1989-06-14
Judge(s)Naimuddin, Ali Hussain Qazilbash, Shafi-ur-Rehman
ResultPetitions dismissed

ORDER

' NAIMUDDIN, J.--Leave to appeal is sought in the above petitions from a common judgment dated 7-2-1989 passed by a learned Single Judge of the Lahore High Court, Rawalpindi Bench, whereby C.R. No,210/82 filed by Barkat Ali and Altaf Hussain was accepted while C.R. No,153/83 filed by the Government of Punjab against the petitioner was dismissed in the following circumstances:

1. Fazal Hussain alongwith other family members claims to be the joint owner of more than 80 per cent. Of 320 acres of land situated near Bharwal, tehsil and district Chakwal. On 19-6-1974, he made an application under the Mining Concession Rules, 1960 on prescribed form praying for prospecting licence for 320 acres of land in the name of "Fazal Hussain & Co." A prospecting licence for mining coal was issued on 27-2-1975. However, meanwhile on 9-7-1974, the petitioner entered into a partnership with Altaf Hussain respondent. The term of the partnership were reduced to writing and it is stated in the partnership deed as follows:- {{URDU TEXT}} ' After the above recital, the deed, inter alia, provides that the name of the company shall be "Fazal Hussain and Company", the head office of the company shall be Mauza Bharwal, tehsil Pind Dadan Khan, the partners will share profit and loss and contribute the capital equally. This partnership shall be effective from 18-6-1974.

2. On 18-11-1976, Baqir Hussain and Barkat Ali were taken as partners in the firm and a fresh partnership deed was executed, the recital whereof reads as follows:- {{URDU TEXT}} ' One of the terms provides as follows:-- {{URDU TEXT}}

3. Disputes and differences having arisen between the parties, the petitioner instituted a suit for dissolution of partnership. On the pleadings of the parties, one of the issues raised was:- ' Whether the prospecting licence in dispute was exclusively allotted to the firm? OPP ' On 8-9-1981, the Senior Civil Judge, Jhelum, decreed the suit holding that the prospecting licence for mining coal was in the name of the petitioner in his individual capacity and thus decided issue No,2 in favour of the petitioner. Aggrieved by the judgment and decree the respondents filed an appeal with the District Judge, Jhelum, but failed. They took the matter then to the High Court in revision (C.R.210/82), which was accepted as per impugned judgment whereby findings of the Senior Civil Judge in the suit as well as that of the District Judge in appeal on issue No,2 were set aside and the case was remanded to pass a preliminary decree for rendition of accounts and dissolution of partnership in accordance with the findings of the High Court on issue No,2 that the prospecting licence for mining coal belonged to the firm. Aggrieved by this judgment C.P.

No,205/89 has been filed.

4. C.P. No,206-R of 1989 arises in the following circumstances: ' By order dated 1-6-1981, the Director, Industries and Mineral Development, cancelled the prospecting licence on the ground that while accepting the revision petition and issuing injunction in favour of the petitioner, the High Court made certain observations that the licence was property of the firm and since the firm was a partnership-at-will, it. Stood dissolved at the time the suit was filed. The petitioner filed a suit in the Court of the Senior Civil Judge, Jhelum, for a declaration that notice dated 1-6-1981 cancelling the licence was illegal, void, inoperative, ultra vires and collusive due to misinterpretation of the order of the High Court dated 8-1-1979 and issuance of permanent injunction, which was dismissed by judgment and decree dated 21-9-1982. Aggrieved by the judgment and decree of the Senior Civil Judge, the petitioner filed an appeal with the District Judge, Jhelum who accepted the same by judgment dated 4-4-1983 holding that the notice cancelling the prospecting licence of the petitioner was illegal, void and ineffective. This led to the filing of a revision petition by the Government in the High Court, which was heard alongwith the abovementioned revision and was dismissed, but the petitioner has sought leave to appeal for the reason that he is aggrieved by the findings on issue No,2 quoted hereinbefore.

5. We have heard the learned counsel for the petitioner at length. His whole thrust of arguments was on the finding on issue No,2, which is one of the fact. He accordingly submitted that the application for prospecting licence was made by the petitioner alone, though he mentioned in the column of applicant the name of "Fatal Hussain and Company". He further submitted that the partnership in question came into existence on 9-7-1974 when the first partnership deed was executed which was much after the application for prospecting licence was made. He, therefore, urged that the prospecting licence could not be property of the firm. His second submission was that a prospecting licence under the Mining Concession Rules, 1960, could be granted to an individual or to a company and not to a partnership firm.

6. Taking up first submission it may be stated that under section 14 of the Partnership Act, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm. For the sake of convenience, section 14 of the Partnership Act may be quoted.

It reads as follows:-

14. The property of the firm. --Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired by purchase or otherwise, by or for the purpose and in the course of the business of the firm, and includes also the goodwill of the business.

' Unless the contrary intention appears, property and rights and interests in property, acquired with money belonging to the firm are deemed to have been acquired for the firm." (Underlying is ours).

The recital of the first partnership deed quoted hereinbefore clearly shows that Fazal Hussain had to get sanctioned the mining lease and he made Altaf Hussain a partner in it. Therefore, the intention to bring the prospecting licence into the stock of the firm or make it the property of the firm is clear. The position was not changed in the subsequent partnership deed. As such every partner became equally interested in the whole of partnership assets. Reliance is placed on Yagoob v. Additional Settlement Commissioner, Karachi and 2 others 1973 SCMR 116 wherein at page 121 of the report, it was observed as follows:-- "While it is true that a partner cannot claim any asset of partnership as exclusively his own until a distribution of the assets thereof has taken place, yet in the law every partner is in the absence of any special agreement to the contrary, equally interested in the whole of the partnership assets, and if the property happened to be real property then the legal estate in it would be governed by the ordinary doctrines of real property. Vide: Lindlely on Partnership, 11th Edn. p.426. It is futile, therefore, to argue that even if the lease-hold interest became an asset of the firm, the appellant acquired no interest therein."

7. Then much emphasis was laid that the partnership came into existence much later and the application for prospecting licence was made much earlier. This submission is also devoid of any force for the application for prospecting licence was made on 19-6-1974 and the partnership, though entered on 9-7-1974, was made effective from 18-6-1974. Such a course could be adopted.

There is ample authority for it. See Commissioner of Income-Tax, East Pakistan, Dacca v. Amin Match Works, Dacca PLD 1964 SC 377.

8. The second submission that under the Mining Concession Rules, 1960, licence could be granted to an individual or a company and not to a firm is not correct. The stand of the respondent, namely, the Government of Punjab in the proceedings arising out of C.R.No,153 in this regard was to the effect that the Government had considered the application on behalf of the firm, that the Licencing Authority had granted the prospecting licence to the firm after examining the application, the partnership deed and credentials of the partners as stated by the High Court in the impugned judgment. Correctness of this statement has not been questioned before us by the learned counsel for the petitioner.

9. We, therefore, find no merit in both the petitions and accordingly dismiss the same.

1989 SCMR 1906 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)S. 16-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1908 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Qazf (Enforcement of Hadd) Ordinance (VIII of 1979)- -- Ss. 8 & 14-Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979), S. 10 (2)-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1910 [Shariat Appellate Bench] {{URDU TEXT}}

(a) Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)- -- S. 10(3)-Criminal Procedure Code (V of 1898), S. 342-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}}

(b) Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)- - S. 10 (3)-Criminal Procedure Code (V of 1898), S. 340 (2)-Constitution of Pakistan (1973), Art. 203- F- {{URDU TEXT}} [p. 1913]B

(c) Offence of Zina (Enforcement of Hadood) Ordinance (VII of 1979)- S. 10 (3)-Criminal Procedure Code (V of 18981, S. 510-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1914 [Shariat Appellate Bench] {{URDU TEXT}}

(a) Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)- -- S. 10 (3)-Criminal Procedure Code (V of 1898), S. 544-A-Constitution of Pakistan (1973), Art. 203- F- {{URDU TEXT}}

(b) Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)-- S. 10 (3)- {{URDU TEXT}}

(c) Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)-- S. 10 (3)-Criminal Procedure Code (V of 1898), S. 544-A- Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1916 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hodood) Ordinance (VII of 1979)- ---- S. 10(3)-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1917 [Shariat Court Bench] {{URDU TEXT}} Prohibition (Enforcement of Hadd) Order (4 of 1979)- -- Arts. 3 & 4-Criminal Procedure Code (V of 1898), S. 382-B-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1920 [Shariat Appellate Bench] {{URDU TEXT}}

(a) Penal Code (XLV of 1860) - -- S. 377-Constitution of Pakistan (1973), {{URDU TEXT}}

(b) Penal Code (XLV of 1860)- --- S. 377-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} {{URDU TEXT}} 1989 SCMR 1923 [Shariat Appellate Bench] {{URDU TEXT}}

(a) Prohibition (Enforcement of Hadd) Order (4 of 1979)- Art. 4-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}}

(b) Prohibition (Enforcement of Hadd) Order (4 of 1979)- -- Art. 4-Constitution of Pakistan (1973), Art. 203-F-- {{URDU TEXT}} 1989 SCMR 1927 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)-- S. 10(3)-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1929 [Sitariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hudood) Ordinance (VII of 19'79)-- S. 10- {{URDU TEXT}} 1989 SCMR 1930 [Shariat Appellate Bench) {{URDU TEXT}} Penal Code (XLV of 1860)- -- S. 377-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCM R 1332 [Shariat Appellate Bench] {{URDU TEXT}} Penal Code (UN of 1860)- -- S. 377-Constitution of Pakistan (1973), Art. 203-F- {{URDU TEXT}} 1989 SCMR 1933 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979) - --- S. 10 (3)-Constitution of Pakistan (1973), Art. 203-F- - {{URDU TEXT}} 1989 SCMR 1936 [Shariat Appellate Bench] {{URDU TEXT}} Offence of Zina (Enforcement of Hudood) Ordinance (VII of 1979)---- S. 10 (3)-Constitution of Pakistan (1973), Art. 203-F-- {{URDU TEXT}}

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