P L D 1968 Karachi 345 (PLP)

"(1) Is the suit barred by limitation? (2) What is the effect of non‑registration of transfer of mortgage rights in favour of plaintiffs ? , (3) Is there non joinder of necessary parties to the suit? (4) Are the provisions of Order XXXIV, rule 4, C. P. C. not applicable to the facts of this case? (5) What is the amount due under the mortgage? (6) Whether the plaintiffs are a firm duly registered under section 69 of the Partnership Act, 1932? If not what is the effect? (7) Whether the plaintiffs as a firm cannot acquire immov able property in the name of the firm?. (8) To what relief, if any, are the plaintiffs entitled? (9) What should the decree be ? Casts."

3. As there was no contest with regard to the execution of the mortgage and the receipt of consideration the learned trial Judge by consent of parties proceeded to decide the slit on legal issues. On the issues that were framed the findings of the learned trial Judge were as follows: On the first issue he held that the suit was not barred by limitation. On the second issue he found that in so far ‑as the transfer document was not registered it did not confer any right in the plaintiffs. Issue No. 3 was not pressed by the defendants nor was issue No.

4. On the 6th issue the learned Judge found that the suit was by a firm which had not been shown to have been registered under the Partnership Act and he also found that the suit by the firm was not proper because the transfer of the mortgage right was to Muhammadali Haji Allahrakhya personally. Issue No. 7 was decided against the defendant. Upon the finding on the legal issues he dismissed the plaintiffs' suit. It may be noted here that Mr. Inayat Ali, the learned Advocate for the defendant No. 2 Rahmatbai, has not contested the finding of the learned trial Judge on the first issue of limitation. He has also not pressed the issues 3, 4 and

7. With regard to issue No. 6 which related to the bar under section 69 of the Partnership Act Mr. Ali Raza rightly pointed gut that as no evidence was called for and the issue were agreed to be decided purely upon legal notice the learned Judge could not have held that the firm was not registered. On our question ing him he produced an attested copy of the certificate of the Registrar showing that Messrs Muhammadan Haji Allahrakhya was a firm which was registered on 22‑9‑

53. This document has exhibited by the consent of Mr. Inayat Ali. That being so, the objection with regard to the non‑registration of the firm disppears. The further question remains whether the suit by the firm has proper upon the ground that the transfer document was to Muhammadali Haji Allarakhya personally. Upon that point we have no difficulty because the name of the firm in the certificate is shown as Messrs Muhammadali son of Haji Allarakhya and in the body of the document Haji Muhammadali sou of Haji Allarakhya is shown as the first partner. The fact that in the transfer document Muharnmadali Haji Allarakhya is described as son of such and such, does not affect the position because the firm took it as a transfer to the partnership and owned up this position. As far as Mst. Rahmatbai was con cerned it did not make any difference to her whether Piarali had transferred the mortgage rights to the firm or the individual of the same name. This disposes of the objection based on section 69 of the Partnership Act.

4. It may now be stated that when the objection on the basis of the non‑registration of the transfer document was taken by the defendant Rahmatbai an application was made before the trial Judge on 5th February 1962, under Order I, rule 10, C. P. C. for the transposing of Piarali as a co‑plaintiff. This application was rejected by the learned Judge by his order dated 29‑2‑

62. The reason fir 'this order given by the learned A. D. J. was that having regard to the terms of clauses (1), (2), (3), (4) and (5) of rule 10, Order 1, it would appear that this rule did not authorise transposition of parties. He further indicated, though he did not say so clearly that the fact that Piarali was joined as a defendant would show that he was not desirous of prosecuting the suit himself. In other words Piarali was not willing to be joined as a co‑plaintiff. However, when this order was made on 29‑2‑62 the matter rested there and upon the dismissal of the suit an appeal was filed by tie firm and amongst the grounds taken it was asserted that the trial Court had erred in dismissing the plaintiffs' application under Order I, rule 10 for transposing the defendant No. 1 as co‑plaintiff when the latter had not objected to it. After this appeal was filed an applica tion was made in this Court on 17‑12‑1962 under Order I, rule 10, praying that in the interest of justice and equity Piarali be trans posed as a plaintiff in the plaint and appellant No. 2 in the appeal. We heard Mr. Rahimtcola, the learned counsel for Piarali in support of this application. Mr. Inayat Ali did not dispute the proposition that the Court did have power under Order I, rule 10, C. P. C. to transpose the defendant No. 1 as a co‑plaintiff in this suit. What he contended was that it had to be established that the failure to join Piarali as a co‑plaintiff initially was due to bona fide mistake. This, he urged, had not even been so stated in the two affidavits filed in support of the application under Order 1, rule 10, one in the Court below and the other is this Court.

5. The question whether a transposition can be ordered was considered by the Court of Appeal in England in the case of Hughes v. The Pump House Hotel Company (1). It was held that where an action has through a bona fide mistake been commenced in the name of wrong person as plaintiff, the fact that the original plaintiff has no cause of action does not take away the jurisdic tion of the Court to order the substitution of another person as plaintiff. It was found that this case clearly fell within the words of Order XVI, rule 2 of the English Code which would appear to be in pari materia with Order I, rule 10, C. P. C. This case was followed in a Sind Case in the Court of the Judicial Commissioner Firm of Gerimal Hariram v. Firm of Raghunath Kalianji and another (A I R 1921 Sind 59). The learned A. J. C. held that the words of clause ((1902) 2 K B 485) to Order I, rule 10 are comprehensive enough to include cases where the original plaintiff has no cause of action and the interpretation of those words must not be restricted to cases where the plaintiff has some right to sue. It was further held that the transfer of a party from pro forma defendant or otherwise to plaintiff is not an addition of a new party within the meaning of section 22 of the Limitation Act. The Privy Council had occasion to examine this question in the case of Monghibai v. Cooverji (A I R 1939 P C 170). In this case, a mortgage had been executed in favour of a firm of which some of the partners had later retired after assigning their interest in favour of the remaining partners by an unregistered deed. The suit was then brought on the mortgage by the remaining partners. The plaint was then amended to bring on record the retiring partners as defen dants. Their Lordships noted the fact that the mortgagee's interest in the property did not pass to the remaining partners by reason of the unregistered document and oral agreement and that property remained in the nine original partners. Having said this their Lordships went on to observe that "in those circumstances their Lordships agree with the Appeal Court, thinking it would have been more satisfactory that the seven retiring partners should have been made co‑plaintiffs instead of co‑defendants, but it may be that they objected to being so joined or there may be other reasons which do not appear on the record for joining them as co‑defendants. In any case they were so joined, the record amended, and no appeal from, the learned Judge's order was made. The whole of the necessary parties were therefore before the Court and there seems no reason why the appropriate relief should not have been given." It would be noticed that this was a much stronger case, because the retiring partners, in whose favour the mortgage had been originally executed, had not even been joined as co‑plaintiffs either originally or by transposition and yet their Lordships took the view that the relief could have been granted. This is as far as the scope of Order 1, rule 10 (1) is concerned. The further question is whether Piarali would have opposed to his transposition as a co-plaintiff. Here we must observe that the learned Judge assumed a thing without any material before him. The fact that the plaintiffs made an application for such transposition would indicate that they had obtained the consent of Piarali because if he had not conceded he would have said so after notice of this application was sent to him. That he had consented is further borne out by the fact that he has in this Court supported the application for his being transposed as a co‑plaintiff and as a co‑appellant. There is, therefore, no difficulty in holding that Piarali was willing to be joined as a co‑plaintiff. This brings us to the consideration of the argument of Mr. Inayat Ali that such a transposition cannot be ordered unless the initial mistake of nod‑joinder of Piarali was due to a bona fide mistake. The learned counsel principally relied upon the circumstance that it had not been expressly even alleged in the two affidavits that this was a case of bona fide mistake. We have carefully considered this argument but have no hesitation in holding that it is not well‑founded. In both the affidavits it was clearly stated that in the ends of justice this transposition should be made. The fact whether it was a bona fide mistake or not, would not be established by making merely an assertion to that effect. It would be necessary in any case to see whether in the circumstances of the case it could reasonably be held that the mistake of not joining Piarali as a co‑plaintiff was bona fide or not.

6. Now, let us look at the circumstances: Piarali was the original mortgagee. He executed an assignment in favour of the firm for consideration. There was no ulterior purposes in this transfer because none has been alleged. The only reason, there fore, that the suit was filed in the name of the firm alone and not by joining Piarali as a co‑plaintiff must be attributed to the error of judgment of the learned counsel who drafted the plaint. There may have been a bona-fide mistake whether an assignment of actionable claim did or did not require a registration. We are, therefore, of the opinion that the plaintiffs are not to suffer or account of that mistake and we further hold that this was a bona fide mistake. We accordingly hold that the application for trans., position of Piarali as a co‑plaintiff was wrongly rejected in the Court below, and we order that he should be so transposed as plaintiff No. 2 and also as appellant No. 2 in this appeal. This finding really concludes the matter because upon all other matter no contest remained as we have shown in the earlier part of the, judgment. In view of the position which was conceded by Mr. Ali Raza appearing far the appellant‑firm that no transfer or interest was validly created in their favour because the docu ment creating this interest was not registered, it must follow that the decree shall be only in favour of the co‑plaintiff Piarali.

7. In view of our finding we decree the claim in the sum of Rs. 23,935 which includes interest at the agreed rate up‑to date. The future interest shall be at the rate of 6 % per annum until payment. The decree shall be under Order XXXIV, rule 4 in the form IX in Appendix D to the Schedule I of the C. P. C. As regards the costs in view of the fact that Piarali was not originally joined as a co‑plaintiff we order that costs of the suit as well as cotta of this appeal shall be borne by the parties as incurred. K.B.A Appeal accepted.