1989 PLP 1255 (CLC)

(v) As far as the order of cancellation dated 1‑6‑1981 was concerned, it was urged that the order was plainly unjust, unlawful and was passed without any notice to the petitioners.

14. Learned counsel for respondent No.l Fazal Hussain in support of his version made the following submissions:‑ (i) He supported the finding of the learned District Judge on issue No.2 and contended that the application itself was very clear. The description of Messrs Fazal Hussain and Co. was a sheer misnomer, that the application did not contain any name of partners, that respondent No.l furnished his own statement of accounts, paid the fee himself. It was next contended that the application was given on 19‑6‑1974 while the partnership was entered into on 9‑7‑1974, and, therefore, it could not have a retrospective effect in respect of the application dated 19‑6‑1974. (ii) Secondly, that the partnership deed itself was self‑evident. It recited that Messrs Barkat Ali and others were partners only in the business. It was contended that Messrs Barkat Ali had given a separate application on 1 2‑1979 under the title of Fateh Kot Co. for the grant of same licence. It was suggested that the application was of a decisive significance and revealed that Messrs Barkat Ali were not partners in the prospecting licence. (iii) Thirdly, that Messrs Fazal Hussain were not party in Revision Petition No.153 of 1983 filed by the Government of the Punjab in the suit. They were not even party before the Court of learned District Judge, therefore, they were not entitled to assail the validity of the judgment and decree of the learned District Judge in Revision Petition No.153 of 1983. (iv) Fourthly that the licence under the Rules was neither assignable nor transferable, therefore, Messrs Barkat Ali had no legal right in the licence. (v) Lastly that the licence was irrevocable under section 60 of the Easement Act and the finding of the learned District Judge on the question of cancellation was correct and not open to any exception in the revisional jurisdiction.

15. Learned counsel appearing on behalf of the Punjab Government in Revision Petition No.153 of 1983 contended as follows:‑ That the prospecting License was just a privilege and it did not create any right in favour of the licensee. The licence is for a limited period, it stood expired within the efflux of that period and both the parties have no right to challenge the order of cancellation dated 1‑6‑1981. Reliance was placed on Messrs Washtone & Lime Quarry Ltd. v. Province of Sind etc. PLD 1977 Kar. 497 and Muhammad Hashim v. Lulfiqar Ali Khan General Manager, West Pakistan, Road Transport Board and others PLD 1963 Lah. 418.

16. After hearing all these elaborate arguments of the learned counsel for the parties and having gone through the record of both the Civil Revisions I have come to the conclusion that the stand of the three parties can be conveniently summarised as follows:‑ (i) Messrs Fazal Hussain have taken up the stand that the licence belongs to him, that he had applied for its grant in his individual capacity, furnished the bank accounts himself, has received the licence in his individual capacity, and that Messrs Barkat Ali and others were only partners in the business of extraction and sale of the Coal. (ii) Messrs Barkat Ali and others represented to the effect that the licence belongs to partnership, that application was initiated on behalf of Messrs Fazal Hussain, that licence was issued to the firm by the Licensing Authority after examination of the credential of all the partners, that the firm applied for conversion of prospecting licence into lease for a period of ten years. (iii) The Government of the Punjab took a very firm stand to the effect that the Government had considered the application on behalf of the firm, that the Licensing Authority had granted the prospecting licence to the firm after examining the application, the partnership deed and credential of the partners. It was represented by the Government of the Punjab that since the partnership stood dissolved, they had no option but to cancel the prospecting licence without any notice to the firm.

17. The aforesaid resume makes it clear that Messrs Barkat Ali and Fazal Hussain have a common cause against the order of the Licensing Authority dated 1‑6‑1981 while they themselves are grappling with each other on the question of entitlement of licence.

18. After a careful examination of the record I have come to a conclusion that the arguments of Fazal Hussain in respect of his sole entitlement cannot be, accepted. He gave an application on behalf of the firm, the firm came into existence on 9‑7‑1974 the Partnership Deed was registered on 27‑2‑1975, the Licensing Authority granted the licence after the examination of relevant documents on behalf of the firm.

19. The contentions of Fazal Hussain are devoid of any force on a simple A Rule that partnership property means and includes the rights or interest in the property acquired with money belonging to firm. The foundation of the partnership rests upon the principle of joint venture. It would be advantageous to reproduce sections 7 and 14 of the Partnership Act which are as follows:‑

7. Partnership at will. Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is "partnership at will".

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 firm, or for the purposes 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.

20. Section 14 ibid has been examined in different cases by the superior Courts. In Commissioner of Income‑tax East Pakistan, Dacca v. Amin Match Works Dacca PLD 1964 SC 377, it was held that the written document is not essential for the validity of partnership for the contract of partnership may be entered into without any particular formality. Agreement of partnership may be given a retrospective effect by the parties themselves. In this case the partnership deed was executed in 1956 and it was agreed that that would be effective from the 26th of September, 1954. The agreement was held to be operative from the aforesaid date. 1n Yaqoob v. Additional Settlement Commissioner Karachi and 2 others 1973 SCMR 116 it was held that:‑ "Every partner is, in absence of special agreement to contrary, equally interested in whole of partnership assets‑‑Leasehold interest of one partner becoming asset of firm. Other partner acquires interest therein. While it is true that a partner cannot claim any asset of a partnership as exclusively his own until a distribution of the assets thereof has taken place, yet in 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. It is futile, therefore, to argue that even if the leasehold interest became an asset of the firm, the other partner acquired no interest therein. A leasehold interest is, subject to any contract to the contrary both transferable and heritable under the Transfer of Property Act".

21. In Syed Hassanally Shah v. Messrs Engineering and Co. Hyderabad and others PLD 1966 Kar. 52, the High Court refused to accept the contention of Syed Hussanally Shah in his written statement to the effect that there was no agreement between him and Babu Raza Hussain and Co. and that he had entered into an agreement with Raza Hussain in his individual capacity. It was held that Raza Hussain entered into an agreement with the defendant on behalf of the firm.

22. From the above background of law there is no escape from the conclusion that the partnership property is inclusive of all the properties of the partnership. No property can be said to be the ownership of an individual partner. Section 7 of the Partnership Act permits the partnership for a particular venture or undertaking and section 14 also provides that a property can be separated from partnership if the partners come to such a covenant. The perusal of the partnership deed shows no such intention. The partnership deed explicitly states! that it was to be effective from the date of the application. Therefore, there is no difficulty in reaching the conclusion that the stand of Fazal Hussain is mere afterthought and that the licence belongs to partnership. Even on the principle of Messrs Fazal Hussaini estoppel he cannot be permitted to say that the entry o e and Co is mere a misnomer.

23. There is another aspect of the decisive nature on this question. The grant or refusal is the prerogative of Licensing Authority. The grant or licence is neither a right nor any legal privilege. Nobody has a right to be granted a licence. The Licensing Authority after the examination of requirement of law has to form its opinion as to whether the licence should be granted or not. Had Fazal Hussain himself given an application on his behalf, the Licensing Authority would have the option to refuse or accept the application, as such, on this question, the stand of the Licensing Authority is conclusive and binding. Therefore, I have come to the conclusion that the finding of the learned District Judge as well as that of the Trial Court on issue No.2 in judgment and decree dated 8‑9‑1981, in Revision Petition No.210 of 1982 is unsustainable. The objection of the other side that the l finding on issue No.2 is a finding of fact and it cannot be interfered in revisional jurisdiction, is totally misconceived. If the finding is concluded by the Courts below by ignoring the material, oral as well as documentary evidence and is iii defiance of the law, it can be interfered in revisional jurisdiction of this Court.

24. I will now proceed to examine a very important argument of the learned counsel for Fazal Hussain. It was contended that Messrs Barkat Ali were not party in suit before the trial Court. They were not party even before the first appellate Court and additionally they were not aggrieved of the decree of the dissolution passed by both the Courts below in respect of partnership, therefore, they have no right to question the finding of both the Courts below on issue No.2 in Revision Petition No.153 of 1983.

25. Apparently, the argument seems to be formidable one but if section 115 of the C.P.C. is analysed, the argument appears to be totally unwarranted. The revisional ljurisdiction of the High Court under section 115 of the Code of Civil Procedure Code relates to the question of jurisdiction. The powers of the High E Court are very wide. If the Court comes to the conclusion that the findings of the subordinate Court fall within clauses (a), (b) or (c) of section 115 C.P.C. it has the powers under revisional jurisdiction. The position with reference to section 115 was summed up by the Full Bench in S. Zafar Ahmad v. Abdul Khaliq PLD 1964 Kar. 149 which is as follows:‑‑ "The position with reference to section 115 may thus be summarised in the following proposition:‑ (i) The High Court may, in respect of any state of facts judicially considered, on which a Court subordinate to High Court has given a decision, make such order as it thinks fit, if in the opinion of the High Court, such Court in giving the decision, (a) has exercised or assumed a jurisdiction not vested in it by law, or (b) has failed to exercise or declined to assume a jurisdiction vested in it by law, or (c) while exercising its jurisdiction has taken a procedural step which is contrary to a mandatory provision of the law, or has omitted to take a procedural step which is required by a mandatory provision of the law to be taken, or (d) while exercising its jurisdiction has taken a procedural step which is contrary to a directory provision of the law, or to a general principle of law, and which in the final result has given to one party an advantage over the other which it would not have got but for the fact that that step was taken. (ii) The High Court cannot exercise this power if that same matter could have been brought before it by way of appeal. (iii) When a complaint is made to the High Court that a Court subordinate to it has acted in any of the four ways mentioned in the first proposition and the High Court is of the opinion that the Court appears to have acted as complained, it may send for the record relevant for the purpose of ascertaining whether the complaint is correct or not, but it not bound to send for the record, if it can satisfactorily ascertain by other means the facts necessary for a decision of the point raised.

26. It seems appropriate to take this opportunity to state clearly a few guiding rules of practice which are liable to be overlooked when dealing with particular cases:‑ (a) Interruption of pending proceedings should be avoided as far as possible. If it is found necessary to stay proceedings, the case should be disposed of as a whole, instead of first having a full dress debate on the question of stay only. (b) Since the power conferred by section 115, Civil Procedure Code, is meant for correcting errors made by subordinate Courts in relation to the existence or the exercise of their jurisdiction, no occasion arises to exercise it in relation to a matter which is within the discretion or authority of the subordinate Court concerned. This power should, therefore, never be exercised so as to usurp the discretion or authority if a suborditate Court." In Rati Ram v. Niader Mal AIR 1941 Allahabad 21.5 it was held that "once the High Court is seized of the revision, then, in my view, it becomes its duty to cast its eye not merely on one part of the proceedings but the whole of them. What come under the review of the High Court are the proceedings as a whole from start to finish and the object of the scrutiny of the High Court is that so far as possible justice may be done in the proceedings as a whole". I am in complete agreement with the aforesaid enunciation of law. The objection of the learned counsel for Fazal Hussain is, therefore, misconceived and is repelled.

27. Now it is the time to examine the contentions of the respective parties on the question of validity of the order of the licencing Authority dated 1‑6‑1981 by which the prospecting licence was cancelled and intimation to the said effect was conveyed to Fazal Hussain and others.

28. The argument of the learned counsel for the Government of the Punjab that a prospecting licence granted under Rule 29 of the Pakistan Mining Concession Rules, 1960 is a mere privilege and is uncreative of any right in favour of the licensee, cannot be accepted. A prospecting licence granted under Rule 29 ibid is not merely a privilege. It is coupled with the transfer of the right to undertake the extraction of Coal from the area leased. It also gives the right to the licensee for conversion of licence into a mining lease. Rule 35 also provides that a licensee shall be entitled to renewal of the licence until the mining lease has been granted or refused. Rule 35 is as follows:‑ "

35. Right of the licensee for renewal of his prospecting licence on applying for a mining lease.‑‑ The licensee having before the expiry of a prospecting licence applied for mining lease shall have the right to renewal of the prospecting licence until the mining lease applied for has been granted or refused."

29. Rule 36 of the Pakistan Mining Concession Rules, 1960 stipulates the working obligations of the licensee who is required to get a scheme approved by the authority so as to employ a technical personnel, to lay roads, residential accommodation for the staff and labourers. There is no dispute in this case that the firm complied with the requirement contained in rule 36 ibid. Work‑order was issued. The firm started the operation of extracting coal. The necessary fee amounting to Rs.9,745 was paid. The applications for renewal were submitted in 1976, 1977 and 1978 while no order was passed in respect of the application for grant of Mining Lease. The impugned order was passed by the licensing Authority on the basis of a reference to the judgment of the High Court in respect of the decree of the dissolution of partnership. Before taking action,, no notice was to the firm, therefore, the order of the Licensing Authority dated 1‑6‑1981 was illegal on a very simple ground that it was in defiance of the principle of natural justice that nobody shall be condemned unheard. In Messrs Universal Mining Corporation v. Joint Director, Licensing Authority and another PLD 1986 Quetta 176, the order of the Licensing Authority was set aside in constitutional jurisdiction on the ground that the licensee was not provided any opportunity as to show cause against the proceedings of cancellation. I am in complete agreement with the aforesaid view. My conclusion is that a licence l granted under Rules is coupled with a transfer of interest and that the parties executed a work of permanent character and incurred expenses in its execution. The licence is irrevocable within the ambit of clause (b) of section 60 of the. Easements Act. The finding of the learned District Judge on issue No.2 is not I open to any exception. The order of the Licensing Authority is, therefore, declared to be without jurisdiction and without legal authority.

30. Before parting with this case I feel it necessary to record that the Licensing Authority had a right to initiate any action in respect of this licence by' giving a show‑cause notice to all the partners of the firm and decide the entitlement of the partners in the context of their rights flowing from the I partnership.

31. For the foregoing reasons I accept Civil Revision No. 210 of 1982, set aside the finding of the learned Senior Civil Judge as well as that of the learned District Judge on issue No. 2, the case is remanded to the Senior Civil Judge to pass a preliminary decree for rendition of accounts and dissolution of partnership J in accordance with the finding of this Court on issue No.

2. The revision petition involves the examination of intricate question of law, therefore, the parties are left to bear their own costs. The Revision Petition No. 153 of 1983 is dismissed, the finding of the learned District Judge, however, is set aside in view of my finding on issue No.

2. The parties are let to bear their own costs. A.A./B‑117/L Order accordingly.