P L D 1973 Peshawar 116 (PLP)

"69. (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted fn any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of firms as a partner in the firm. (2) 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 part ners in the firm. (3) The provisions of subsections (1) and (2) shall apply also to a claim of set-off or other proceedings to enforce a right arising from a contract, but shall not affect- (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) ................... (4) ...................... ." It would be evident that by the plain language of sub section (1) of this section, which alone would be applicable to the facts of the case, the suit of the appellants would be clearly barred if by the examination of their plaint it is found that it could not be protected under clause (a) of subsection (3) of that section. Now by going through the plaint the appellants seem to have taken contradictory stands therein alleging at places that the partnership firm was still in existence, but admitting at a later stage that it had been dissolved by a notice served on them by respondents as also through the publication of a similar notice in a newspaper. In their written statement, respondents admitted this last assertion saying that by these two notices partnership firm had been already dissolved and the contrary stand taken by the appellants was incorrect. These being the pleadings, of the parties, the question arises whether the suit of the appellants can be said to be a suit, for relief, in regard to the affairs of an existing firm and there fore incompetent in view of bar contained in section 69 of the Partnership Act?

4. It is common ground between the parties that the partner ship in this case was "partnership-at-will". If this be so, then by the said two notices, which seem to have been served.4 on all partners, partnership between them would cease to exist from the date the appellants received these notices, in view of section 43 of the Partnership Act which reads as under:- "43 (1) Where the partnership is at will, the firm maybe dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. (2) The firm is dissolved as from the date mentioned in notice as the date of dissolution or if no date is so mentioned as from the date of the communication of that notice." It seems to me however, that the learned District Judge had completely ignored the allegations made in the plaint, the fact that tile partnership-firm in this case was "partnership-at-will" and that in consequence of the above two notices, served by the respondents on appellants, the firm would, in view of the operation of section 43 of Partnership Act, cease to exist from the date on which the notices were received by the latter. He should have realised that this position would not alter in the least despite the contrary assertion made in the plaint that the partnership firm was still In existence, for once it is conceded that the partners were bound together in a "partnership-at-will", the service of said two notices upon the appellants would auto matically bring about its dissolution under the mandate of section 43 of the Partnership Act. In this view, the suit filed by the appellants would appear to be protected under clause (a) of subsection (3) of section 69 of the partnership Act, for in substance it would be deemed to be a suit for rendition of accounts of a dissolved firm as also for the appointment of its Receiver until the decision by Court.

5. The net result of this discussion is that the learned District Judge, in view of the preceding factual and legal discus sion, was clearly in error to non-suit the appellants on the erroneous assumption that the suit filed by them was incom petent in view of bar of section 69 of the Partnership Act. This appeal is, therefore, allowed, the impugned decree is set aside and the case remanded to the learned District Judge for disposal on merits, for he had decided the appeal before him only on a point of law arising under section 69 of the Partner ship Act. The costs of this appeal will, however, follow the result of appeal in his Court. M. B. A. Appeal accepted. Case remanded.