P L D 1976 Quetta 9 (PLP)

Ss. 8, 13 & 42 read with Limitation Act (IX of 1908), Art. 106 Partnership, dissolution of-Limitation-Burden of proof-Contention that though plaintiff's agency cancelled years ago this did not mean immediate cessation of firm's business, hence, limitation for suit did not run from date of cancellation of agency--Held: Burden of proof regarding claim being within time lay on plaintiff-Plaintiff not even stating in his evidence that business of firm continued after can cellation of his agency but merely mentioning year of cancellation, limitation, at highest, began running on expiry of year stated -Plaintiff's claim being for recovery of his share of firm's assets, Art. 106, Limitation Act, 1908, applicable to case and suit barred by time. Basharatullah for Petitioner. Mohammad Nawaz for Respondents. Dates of hearing: 15th September and 24th November 1975. The applicant entered into a partnership with the respondents by a written partnership deed dated the 3rd of July 1955, and this partnership deed, Exh. P/14, stated that, as the applicant had obtained the agency for kerosene in Chaman from the Standard Vacuum Oil Company, he had entered into the partnership with the respondents in order to run the business of this agency in Chaman. But clause 4 of the partnership deed stated that the partnership would continue as long as the partners desired, and that, if any partner wanted to withdraw from the partnership, he could only do so after a settlement of accounts and by selling his share to the other partners. The relations between the applicant and the respondent were not harmonious, and it is contended that the business in Chaman was not run successfully for this reason; therefore the Standard Vacuum Oil Company cancelled the applicant's agency in 1960. The applicant then demanded accounts from the respondent, because the business of the agency in Chaman had been managed exclusively by the first respondent. The respondents did not submit accounts, but instead delivered all the books of the firm to the applicant, who had then audited by his own employee, and, on the basis of this audited account, he made a demand on the respondents for the payment of, his share of the firm. That demand was not complied with, but, according to him, the parties had agreed to refer their differences to chartered accountants, who, in due course, inspected the firm's books and submitted their reports. But, according to the applicant, as the respondents would not accept this report also, he served them a notice for the dissolution of the firm, and, a few months later, in November 1965, he filed a suit against the respondents for the dissolution of the firm and for accounts.

2. The respondents contested the suit, but, for the purpose of this revision, I would refer only to three objections raised by the first respondent in his written statement. The first objection was that the suit for accounts was not maintainable, because the applicant had possession of all the account books of the firm, and therefore knew what his claim was. The second objection was that the firm had been formed only to run the agency at Chaman, and, as that agency had been cancelled, the plea was that "the partnership stood automatically dissolved"; accordingly the further plea was that the suit was time-barred. The trial Court held that the partnership between the parties was a partnership-at-will, and it also held that the applicant was entitled to accounts. On this view, it rejected the objection about limitation and decreed the suit, as prayed. The applicant then went in appeal to the District Court, Quetta, and, reversing the findings of the trial Court, the learned District Judge allowed the appeal and dismissed the suit. Hence this revision.

3. The question, whether the suit for accounts was maintainable, has been decided by both the Courts below on the applicant's evidence, yet these Courts have reached opposite conclusions. This seems strange. Be that as it may, the applicant stated in his evidence that the first respondent had been managing the business, so that he had not had access to the accounts of the firm, but he admitted that he had received all the account books of the firm about three years before the suit had been filed. How then could he not know what was due to him? Unfortunately, the trial Court totally ignored this question. Secondly, the applicant said in his evidence that the account books of the firm had been audited both by one Mr. Qureshi and by chartered accountants, and in cross-examination he was further compelled to admit that the said Mr. Qureshi was his own employee. Obviously, therefore, the applicant knew what was due to him. It is true that he did not state in his evidence what was due to him, but, as his own' agent bad thoroughly examined all the books and prepared a balance-sheet, it is clear that the applicant knew very well what was due to him; therefore the trial Court has misread the applicant's evidence, and I agree with the view of the learned District Judge that the applicant should have sued for the amount due to him, because he knew what was, due to him; therefore the suit for accounts was not maintainable.

4. I now turn to the question whether the partnership between the parties was a partnership-at-will as contended by Mr. Basharatullah, or, a partnership for a single venture, or, ventures as contended by Mr. Muhammad Nawaz, and, as the question turns on the proper construction of section 8 of the Partnership Act, 1932, I would observe here that this section reads: "A person may become a partner with another person in particular adventures or undertakings." In the instant case, the partnership deed clearly stated that the partnership had been formed to run the agency acquired by the applicant at Chaman from the Standard Vacuum Oil Company. As the partnership was formed only for the purpose of running this agency, there is great force in Mr. Muhammad Nawaz's submission that it had been formed for running a single venture, namely, the Chaman agency. But, as Mr. Basharatullah submitted that the applicant's case wag supported by the provisions of clause 4 of the partnership deed (Eah. P/14), I would now examine clause 4.

5. As I pointed out earlier, according to clause 4, there was no time limit on the duration of the partnership, and it was further that it would continue as long as the partners so desired. Now, according to Mr. Basharatullah, these provisions were inconsistent with the very concept of a particular partnership, and further, according to learned counsel, these provisions necessarily implied that the partnership under the deed (Exh. P/14) was a general partnership. A partnership deed, like any other document, has to be read as a whole, the more so, because the deed Exh. P/14 in the instant case appears to have been drafted by the partners themselves; therefore the intention of the partners has to be gathered from the entire document. It is true that the partners affirmed in clause 4 their decision to continue the partnership as long as they wished, but what was the partnership formed for? As the partnership deed refers only to the Chaman agency of the applicant, it is very clear that the partnership ha been formed only for the purpose of running this agency; therefore I could continue only as long as that agency lasted, and, if, on the expiry o that agency, the partners had wished to carry on their partnership for C running some other business, they could have done so only by a fresh agreement. In these circumstances, nothing turns on the fact that the partnership was to continue as long as the partners desired. The desire of the partners was subject to a limitation, which was beyond their control, accordingly nothing also turns on the further provision that a partner, on retirement, had to sell his share to the other partners. As the share of a partner could only be sold as long as the firm was in existence, this provision only reflects the intention of the parties to regulate their rights during the pendency of the Chaman agency obtained by the applicant. Therefore, the only question is, whether it can be contended that the partnership was not a particular partnership because of the nature of the business which it was running.

6. Mr. Basharatullah submitted that the nature of the business was complicated, and that it involved multifarious activities, which were expected to go on for many years. Although there is little evidence on this point, I will assume that Mr. Basharatullah's contentions are correct. But, however multifarious be the activities of the firm, it was set up only for running the Chaman agency, and was that not a particular adventure? Mr. Basharatullah feebly relied on the fact that the agency had been run for five, or, six years. That is correct, but how would this be relevant to the meaning of the words "adventures or undertakings" in section

8. The Oxford Dictionary gives several meanings to the word "adventure", one o which reads: "A pecuniary risk, a venture, a speculation, a commercial enterprise". A venture, or, a speculation, or, a commercial enterprise may go on for many years; therefore I do not see how it can even be argued that the word "adventures" in section 8 connotes an enterprise of a short D duration, as submitted by .win. Basharatullah. Then, as to the word "undertakings", the relevant meaning in the Oxford Dictionary is enterprise, whilst the relevant meaning of the word "enterprise" reads: "the action o taking in hand; management; superintendence". Obviously, neither of these words can be restricted to mean something of very short duration; therefore learned counsel's submission is contrary to the plain meaning of section 8 of the Partnership Act.

7. Learned counsel then invoked the plea of hardship and submitted that it would .be very harsh if a firm, which had run for many years, could be dissolved without even the formality of a notice. The question is net of hardship, butt of the plain meaning of the words used in section 8, and as the provisions of section 42 of the Partnership Act are not irrelevant to this plea of hardship, I would quote them

8. Section 42 reads "

42. Subject to contract between the partners a firm is dissolved- (a) if constituted for a fixed term, by the expiry of that term ; (b) if constituted to carry out one or more adventures or undertakings by the completion thereof ; (c) by the death of a partner; and (d) by the adjudication of a partner as an insolvent." Firms for fixed terms may be for ten. or, fifteen years, as firms are frequently constituted for long periods. Now, if such firms stand dissolved on the expiry of the fixed terms however lone, then I do not see why the firm in the instant case could not stand dissolved merely because it had functioned for five, or, six years. Again, if a firm stands dissolved on the death of a partner, there is no reason why it should not stand dissolved on its own death, so to say, because a firm cannot function onee the activities for which it was constituted have come to an end. I am, therefore, not impressed by the plea of hardship, and it seems to, ate that section 8 read with section 42 is fatal to the applicant's plea.

9. Mr. Basharatullah then referred me to the relevant passage in the Lindley's Law of Partnership (Twelfth Edition). The learned author observes at page 99: "If persons who are not partners in other business share the profits and loss, or the profits, of one particular transaction or adventure, they become partners as to that transaction or adventure, but not as to anything else. For example, if two solicitors, who are not partners, are jointly retained to conduct litigation in some particular case, and they agree to share the profits accruing therefrom, they become partners so far as the business connected with that particular case is concerned, but no further. So a partnership may be limited to the purchase and sale of particular jewels, or to the working of some particular patent, or to the working of it in some particular place or district, or the development of particular parcel of land, . . . " A partnership to conduct litigation can go on for many year, as the law's delays are proverbial, yet, according to Lindley, it is a particular partnership. Similarly, a partnership to work a patent can go on for many years, and I see no difference between such a partnership and the partnership in the instant case. Therefore, the observa tions in this passage are fatal to the plea of the applicant that the partnership in the instant case was a general partnership.

10. Finally, Mr. Muhammad Nawaz referred me to the judgment of Muhammad Munir, C. J., in Sudhangsu Bimai Biswas v. Md. Mustafa Chowdhury and others (P L D 1959 S C (Pak.) 319). The facts of this case were that a partnership had; been formed in July 1944 by an oral agreement to carry on the business of military contracts obtained by the partners of the firm during the period of the Second World War. The business of the partners came to an ends two years after the firm had been set up, and Muhammad Munir, C, .J observed: "No notice (of dissolution) was necessary because ex hypothesis the partnership was confined to a particular class of adventures and it came automatically to an end with the termination of those adventures". As the partnership in the instant case was formed only to manage the kersons agency obtained by the applicant, these observations are fully applicable to the instant case. Mr. Basharatullah sought to distinguish them on the ground that the partnership in the case cited had lasted for about two years only, whilst the partnership in the instant case had functioned for about five, or, six years. Nothing turns on this distinction, because no one knew in 1944 that the war was going to end within a year and a half. I would, therefore,. respectfully follow these observations.

11. Mr. Basharatullah then submitted that, although the applicant's agency had been cancelled in 1959, or, 1960, this did not mean that the business of the firm had ceased immediately. That is correct, but the burden of proving that his claim was in time was on the applicant. He, however, did not even state in his evidence that the business of the firm had continued after the cancellation of his agency by the Standard Vaccum Oil Company, x and he merely said that the agency had been cancelled in 1960. As he was not cross-examined on the precise date of this cancellation, at the higher (imitation. began running on the expiry of the year 1960. But, as the applicant's claim could only have been for the recovery of his share of the firm's assets, I agree with the view of the learned District Judge that the suit was barred under Article 106 of the Limitation Act. The revision is without merit and is dismissed with costs. S. A. H. Revision application dismissed.