P L D 1976 Karachi 1018 (PLP)

According to the Decree-holder both the aforesaid properties are owned by Messrs Al-Burhani Industries of which Judgment-debtor is one of the partners. During the pendency of the suit out of which the present execution application has arisen, the plaintiff/decree-holder had applied for attachment before judgment of certain properties including the industrial plot, which was granted. Against the order of attachment an appeal, being Letters Patent Appeal No. 32 of 1970 was preferred. However, during the hearing of this appeal it was admitted by the decree-holder that the claim in the suit was not against the partnership firms known as Messrs Al-Burhani Industries and Messrs Burhani General Stores, but against one of the partners of the two firms, namely Tahir Ali, and in view of this admission, it was held that the partnership properties could not be attached and that proceedings should have been taken under Order XXI, rule 49, C. P. C. The appeal against the order of attachment was allowed and the order of attachment was vacated. However, their Lordships of the Division Bench ,dealing with the appeal gave the following further direction:- There shall be a charge, in terms of Order XXI, rule 49 (2), C. P. C. on the share of Tahir Ali in the aforesaid two firms"; and were further pleased to appoint Nazir of this Court as receiver of Tapir Ali's share in the two firms including the profits therefrom as well as of any money which might accrue to Tahir Ali of these partnerships. It is on the basis of this order that Mr. M. G. Dastagir, tire learned .Advocate for the decree-holder contends that 25 per cent. interest of the Judgment-debtor in the aforesaid two properties is charged with the liability .for payment of the decretal amount, and the decree-holder can proceed in execution of the decree against the same notwithstanding the sale of the industrial plot by Messrs Al-Burhani Industries to the intervenor, as, according to the learned counsel for the decree-holder when a charge is created on certain property not only the owner is bound by it but also are all those who claim through or under him. Therefore, he argued that the intervenor is bound by the order of the Division Bench passed in Letters Patent Appeal No. 32 of 1970. However, plain reading of the order of the Division Bench passed in the appeal would show that their Lordships bad created a charge for the amount of the decree on the interest of Tahir Ali in the two firms in terms of Order XXI, rule 49 (2), C. P. C. and a receiver was appointed of the share of the judgment-debtor in the profits or any other money which might accrue to him in respect of the partnership firms. Order XXI, rule 49(1) and (2) provide as follows :- "(1) Save as otherwise provided by rules, property belonging to a partnership shall not be attached or sold in execution of a decree other than a decree passed against the firm or against the partners in the firms as such. (2) The Court may, on the application of the holder of a decree against a partner, make an order charging the interest of such partner in the partnership property and profits with payment of the amount due under the decree, and may, by the same or a subsequent order, appoint a receiver of the share of such partner in the profits (whether already declared or accruing) and of any other money which may be coming to him in respect of the partnership, and direct accounts and inquiries and make an order for the sale of such interest or other orders as might have been directed or made if a charge had been made in favour of the decree-holder by such partner, or as the circumstances of the case may require." With reference to the above provisions it was observed by a Division Bench of Lahore High Court. In re : Pindi Kashmir Transport Co. Ltd. (in liquidation) (P L D 1967 Lah. 811) .as follows:- "From the scheme of the above rule it is clear that the underlying principle in this rule :is to save the property of partnership from attachment so that a running business should not be broken up by a result of direct action on the part of the execution Court which may paralyse or hamper the activities of the firm by intercepting any part of its gross income. The object of the rule is the protection of commerce which is considered to be an important source of national wealth." I may also quote an illuminating passage from the case of K. H. E. Supply -Co. v. Lakshmi Narayan (A I R 1961 Cal. 364) on this rule, which is as follows:- "The scheme is not to break up the firm by a direct action on the part of the executing Court, or to paralyse or hamper the activities of the firm by intercepting any part of its gross income. The share of the judgment-debtor in the profits-the net income-can only be intercepted through the receiver for the purpose of making satisfaction to the judgment-creditor or the interest of the judgment-debtor in the partnership as a going concern can be sold leaving it to the purchaser at the Court sale to take such steps as he may be advised to take. Even the receiver appointed by the Court will not have, during the continuance of the partnership, the right to interfere in the management or administration of the firm, or to require accounts .of the partnership transactions, or to inspect the books of the firm without an express order of the Court and such an order would not be passed except in special circumstances, as for instance with a view to the dissolution of the firm. This scheme is based on a broad head, of public policy, namely the protection of commerce which is considered to be an important source of national wealth." I am, therefore, of the opinion that what was charged was not any specific partnership property as such but only the interest of the judgment-debtor-partner in the firms including profits and other money accrued to him, for tae property belonging to the partnership was and is not liable to be sold in execution of a decree against a partner of the firm when the claim or the decree was not against the firm or against a partner of the firm as such in the view of the provisions of sub-rule (1) of rule 49 of Order XXI, C. P. C. Mr. M. G. Dastagir contended that a charge on the property amounts to attachment and in support of the contention relied upon a decision of a Full Bench of Lahore High Court in the case of Ajudhia Pershad Ram Pershad v. Sham Sunder and others (A I R 1947 Lah. 13) for the proposition that a charge on tae property amounts to attachment of the property. There cannot be any dispute with the proposition but here the question is what was charged in the present case. Whether it was the interest of the partner in the partner ship firms or it was each and every property of the firms that was charged. '3f it was each and every partnership property then not a single transaction could have been made whether it was in movable or immovable property or merchandise of the firms and it would have paralysed the entire business of the firm. It is not permissible for the Court under the provisions of rule 49 to charge partnership property as such, for, as stated before, sub-rule (1) of rule 49 prohibits the attachment and sale of partnership property in execution of a decree which is not against the firm or against a partner in the firm as such a partner and under sub-rule (2) of rule 49 of Order XXI, the interest of a partner on which a charging order operates is his right to participate in the net assets of the firm, that is, in the value or proceeds of the assets less the liabilities to third parties. In other words Court charges whatever the partner is entitled to from partnership business. As between that partner and outer partners see Ramswamy Chettyar v. Kuttain Chattyar (A I R 1940 Rang. 153). Mr. M. G. Dastagir further contended that interest of a partner in the partnership firm is movable property and relied upon the above citedly case, and the case of Barkat Ram v. Sardar Bhagwan Singh (A I R 1938 Lah. 65) in support of the contention. However, I am unable to understand that how the contention is relevant: at this stage and ho v does it support the case of the decree-holder.. However, there cannot again be any dispute with this proposition. So far as the decree-holder's prayer in respect of the second property,. namely, commercial plot measuring 600 sq. yards, at Shershah Colony, Karachi, allegedly standing in the name of Messrs Al-Burhani Industries, is, concerned, Mr. M. G. Dastagir does not press it against the same as, according to him, the property has already been sold. For the reasons given above, I dismiss the application filed by the decree-holder and allow the application filed by the intervenor with cost. S. Q. Order accordingly.