NAZIR AHMAD KHAN Versus MUHAMMAD ASHRAF KHAN

1. JAMALUDDIN H. AHMED, J. ‑‑This L. P. A. arises out of a judgment .elated the 23rd April 1968, passed by a learned Single Judge of this Court in Suit No. 74 of 1965. This suit was filed for possession of nine buses .claimed by the appellants to be their property which were forcibly and wrongfully taken over by the respondents on 14th July 1964 at Karachi. A further relief for rendition of accounts for running these buses from that date onwards till the restoration of possession of the buses was also claimed. The suit for the appellants was partly decreed inasmuch as the prayer for return of the nine buses alongwith other articles i.e. furniture, stores, spar parts, jeep car engine No. 107720‑C and chassis No. 9153463 was granted, but ‑the prayer with regard to the rendition of accounts was rejected. The appellants have filed this L. P. A. and have prayed that the relief of rendition of accounts for running of the buses as claimed in the suit may be allowed. On the other hand, the respondents have filed cross‑objections under Order XLI, rule 22, C. P. C. praying that the appeal be dismissed and also the decree passed in favour of the appellants be set aside. Both the L. P. A. and the cross‑objections will be disposed of by this judgment.

2. 2 The brief facts leading to this appeal are that the appellants, who are; relations inter se, are the partners of Malihabad Bus Service. This partner ship is oral. On 31‑3‑1964 the respondents entered into an agreement with the appellant: whereby they agreed to sell nine buses as specified in para 2 of the plaint to the appellants. This transaction was entered into through respondent No. 1 Muhammad Ashraf Khan. The total consideration, as agreed between the parties, was Rs. 2,40,000.00 but the mode of payment settled .was that on transfer of these buses in their names, the appellants were to obtain the loan of Rs. 1,50,000 00 from the National Bank of Pakistan, out of which they had to pay Rs. 80,C00.00 to the respondents in cash, while the balance of the total consideration amount was to be paid in 20 equal instal ments of Rs. 8,000.00 each. In compliance with these terms, the appellants did obtain the loan and made payment of Rs. 80,000 00 in cash to respondents. They also gave 6J post‑dated hundies of Rs. 8,000 00 each numbering 4603‑1662 to the respondent. They further spent an amount of Rs.45,000.00 on the repairs, reconditioning and renovation of the buses besides Rs. 10,000.00 towards insurance and the taxes which were due. The buses were brought on the road and run in the names of the appellant after, getting the road permits etc. The above amounts were shown in the account books of Malihabad Bus Service. It was further alleged that the respondents forcibly and illegally took possession of the nine buses, which were at that time in running condition alongwith other articles and the chassis which belonged to the wife of appellant No. 2 Ansar Ahmed Khan. All efforts of the appellants to get back the possession of the nine buses, and other articles failed as respondents were powerful and influencial persons being. close relations of the then President of Pakistan. On the contrary, the respondents filed criminal cases and used the police agency to harass the appellants The buses were being run by the defendants and they were making profit. Having failed in their efforts of approaching the various authorities, the appellants finally filed their suit for the recovery of these buses and for rendition of accounts for running the buses and making gains out of it from 14‑7‑64, the date on which the same were forcibly taken from the appellants.

3. 2‑A. The respondent No. 1, Muhammad Ashraf Khan, alone, contested the suit as the suit against respondents Nos. 2, 3 and 4 had already been. struck off by an order dated 28‑4‑1966. He raised two preliminary objections, one being the bar of section 69 (2) of the Partnership Act, and the other of non‑maintainability of the suit, as framed. According to him, only six buses out of the nine buses belonged to him for which there had been in fact a. separate agreement with the appellants and himself. than the one dated 3t‑3‑1964. Iii further stated that by that agreement the appellants had: purchased six buses from him for Rs. 1,44,000.00 out of which he had received Rs. 80,0!'0.00 and the balance of Rs. 64.000.00 was to be paid in twenty equal instalments. In case of a single default in paying the instalments the respondent was at liberty to seize and recover the possession of his six buses. He denied that there' were any stipulations in the transfer of his buses for the pledging of the same with any bank, for the purpose of raising a loan. He, however, admitted to have received Rs. 80,000.00 but stated that it was, in accordance with the terms of his own agreement. About the hundies he explained that those were received by him in relation to a different transaction, altogether. According to him the appellants had failed to pay the instal ments, as agreed, although they were running the buses on the road. He contended that having failed to pay the instalments the appellants themselves offered to re‑transfer the buses to him and in fact on 14‑7‑1964 the appellants, re‑sold six buses to the respondent No. 1, and swore affidavits confirming this fact and also wrote to the R. T. A., Karachi and the Motor Registration Authorities for registering the transfer. He denied to have taken the buses by force or to have taken the other articles mentioned by the appellant, but admitted that he filed the criminal cases only when the facts of the hypothe cation of the buses with the National Bank came to his knowledge and because this was an act in violation of the terms of his original agreement and which had been kept as a secret from him by the appellants. He, however, denied to have wrongfully taken the possession of the buses and to, have made any wrongful gains out of running the same. He asserted that it he made any profits, he did so in his own right.

3. On the pleadings of the parties, the Court framed the following issues :‑

4. "(1) Whether the suit is barred by section 69(2) of the Partnership Act?

(2) Whether the suit as framed is not maintainable?

(3) What was the date of agreement of sale fur the buses in ques tion?

(4) Whether six buses only mentioned in para. 2 of the written statement were agreed to be sold by defendant No. I and the rest were subject matter of separate agreement between the plaintiffs and other. defendants ?

(5) What were the terms of agreement?

(6) Whether the hundies given to the defendant No. 1 by the plaintiffs were for some other transaction and had no bearing upon the present controversy ?

(7) Whether any of the defendants illegally and forcibly took possession of the buses and other articles, mentioned in para. 9 of the plaint ; if yes, which of the defendants?

(8) Whether the plaintiffs re‑sold the six buses to the defendant No. 1 on 14‑7‑1964 and complied with the formalities of their transfer in the name of defendant No. 1 ? (Para. 9 of the Written Statement).

(9) If answer to Issue No. 8 above be in affirmative, then whether the plaintiffs, at the time of re‑sale, suppressed the fact from defendant No. 1 that the said buses were hypothecated with National Bank of Pakistan and to what effect?

(10) Whether any cause of action has accrued to the plaintiff against defendant No. 1 ?

(11) To what relief, if any, the plaintiffs are entitled?

(12) General."

4. In support of their case the plaintiffs first examined P. W. No. 1 Farid Ahmed, an Assistant in the office of the R. T. A. to produce the files, from that office pertaining to the issue of Road Permits for the nine buses. Besides this P. W. 2, Ansar Ahmed Khan, one of the plaintiffs also produced documentary evidence relating to the transaction and about subsequent events. From amongst the defendants the case against defendants Nos. 2, 3 and 4 had already been struck off and defendant No. 1 Muhammad Ashraf Khan, who alone had filed the written statement, chose not to enter (the witness‑box. No other evidence was tendered by him or on his behalf.

5. The learned Judge considered the two preliminary objections raised by the respondent Muhammad Ashraf Khan with regard to the bar of suit provided in section 69 (1) of the Partnership Act and also the non‑maintain ability on account of the frame of the suit and decided both of them against him. It was held that the suit was not filed by a Partnership Firm but had been filed by the appellants in their individual names. The suit was not even for the benefit of the Partnership as the firm Malihabad Bus Service had .come into existence long after the original agreement relating to the transaction of the nine buses. As to the non‑maintainability of tire suit on account of its form, the learned Judge said that it had not been explained before him. The date of the agreement of the sale of nine buses was found as 31‑3‑1964, and the plea of the respondent No. 1 that there had been a separate agreement of a subsequent date with regard to the transaction of sale of six buses .only was rejected as not proved. The terms of the agreement were also held to be those which were specified by the plaintiff in para. 3 of the plaint. The learned Judge also held that the respondent No. 1 had forcibly and illegally ‑taken possession of the nine buses alongwith other articles specified above, and the case of the respondent No. I that this taking of the buses was on account of the appellants desire to resell the same to him and also because the appellants had secretly hypothecated the buses with the National Bank of Pakistan in violation of the terms of their agreement with him, was not believed to be true, and therefore, rejected. It was further held that the appellants were not entitled to any accounts for profits made after 14‑7‑1964, the date on which the possession was forcibly taken by respondent No. 1, as there was no evidence on record to support the plea that the nine buses were actually put on the road by the respondent. Even the report of the Commissioner did not support the appellants' case in this respect. The ‑learned Judge, therefore, decreed the suit to the extent of return of the buses alongwith the other articles only but dismissed the same so far as the relief of .accounts is concerned.

6. Mr. Z. A. Chishti, the learned counsel for the appellants contended that in view of the reply of the respondent No. 1 to the plea raised in paras. 10 and 11 of the plaint that the respondent was running the buses after 14‑7‑1964, the date on which he took forcible possession of them and was making gains out of this, the prayer for rendition of accounts should have been granted. Although there was no specific evidence led by the appellants in support of the allegation that the nine buses were actually being plied by the respondent No. 1 for his profit, but that according to him was not .necessary in view of the clear admission made by the respondent No. 1 in his .own Written Statement wherein in reply to the appellants, statement he has made his assertion in these terms :‑

5. "It is correct that this defendant is running the said buses, but he is doing so because of his legal right and title and for his legitimate gain."

6. :Obviously, the learned counsel relied on section 58 of the Evidence Act, which made a provision that facts admitted need no further proof. In view of the fact that a decree for the return of nine buses had been passed in his favour, he argued that he was also entitled to accounts for the profits that had been made by the respondent No. 1 out of taking over and plying the buses from 14‑7‑64 till the date of the return of the buses and that this relief could not be denied to him mainly because there was no other evidence or that the Commissioner in his report had not supported the appellants. The report of the Commissioner may have been contrary to the appellants plea, but the admission of the respondent No. 1 proved the facts and its evidentiary value remained unaffected by that report. Mr. Riazul Hassan, the learned counsel for the respondent No. 1 raised a legal objection to this argument and contended that even if the respondent No. 1 was proved to be plying the buses and making profits out of the same, he cannot be held to be liable in accounts to the appellants as he was not an accounting party and was on the appellants own showing in unlawful possession of the buses. The respondent No 1 being thus an offender, there was no such relationship between him and the appellants as could bind him by a decree for rendition of accounts

7. It seems that the allegation of the appellants that the buses were actually being run on the road for profit by defendant No. 1, stands proved. As a rule pleadings are not evidence by themselves; but statements made by a defendant in the Written Statement. could be used as evidence in cases where they amount to admission of the plaintiffs pleas. These admissions could bet direct or even by implication, and in both cases are proof in themselves. In the present case the defendant has admitted the fact of running the buses after the date 14‑7‑1964 and has asserted that this he did as of right and therefore for legitimate gain. Though his case is that the buses have been retransferred to him as the plaintiffs could not run the same on account of financial difficulties, this is specifically denied by the appellant in his examination in Court. A suggestion was made to him about his returning the buses to the respondent Muhammad Ashraf Khan, upon his making a request himself. This was denied as being a false statement. The respondents' own case on this point has not been established, and there is nothing beyond an assertion. On the other hand, the appellant produced documentary evidence to show that he had complained of the forcible taking of the buses, to various authorities and also to the then President of Pakistan Field‑Marshal Mohammad Ayub Khan as he was a relation of the respondent. It is thus claimed that the fact of the plying of the buses after the date 14‑7‑1974 definitely stands proved and it required no further evidence when a clear and unequivocal admission of the respondent No. 1 was made. The learned trial Judge ought to have held so, but it seems his attention was not drawn to the admission of the respondents that was present in the pleadings. But in spite of this the decision of the issue regarding relief of rendition of accounts would still have been the same, as has been rightly argued by the counsel for the respondent, he is not an accounting party. On their own showing the appellants have given the respondent a position by which he could not be held liable to give accounts. Appellants have consistently held that the respondent forcibly and unlawfully took away the buses and the plea of the respondent that these buses had been returned to him with the appellants' consent has not been accepted by the plaintiffs. The respondent has also not been able to establish this plea of his by any evidence. Even Muhammad Ashraf Khan has failed to step in the witness‑box to support his own case. In these circumstances, it cannot be held that the respondent was liable to render accounts to the appellants for the profits that he made after 14th July 1964 out of these buses.

7. It has been held by a Division Bench in the case of Province of West Pakistan v. Allahditta (P L D 1972 Kar. 8), that :‑

8. "A suit for accounts is an equitable remedy which is available to a plaintiff only if he is entitled to accounts, and has not been given accounts."

9. It follows therefore that such relief does not arise out of a mere contractual relationship or because accounts may have to be examined in the course of a suit. There must be something more than a mere relationship of a debtor and creditor. The defendant must stand in some other relation to the plaintiff, such as that "of agent or bailee, receiver or trustee or partner or mortgagee". Reference in this case was also made to A I R 1947 Bom. 255. Obviously a decree for accounts could not be passed or maintained against a party that cannot be shown to be an accounting party. Hence even if the; running of the buses is established by the fact being admitted by the defendant, they could not be directed to give accounts for running the same in absence of proof of any such relationship by which they could be held to, be liable to give accounts.

10. Mr. Chishti, then took an alternative ground that the relief for rendition of accounts was only by way of further relief as he would be entitled to damages for non‑user during the period he remained dispossessed of his property i.e. the buses. According to him he could form an estimate of these damages only when the respondent who was in possession of these facts gave the accounts and thereby disclose the amount that he would be entitled to receive. In other words even he by this argument admitted that the respondent who was being consistently described by him as a wrongful possessor of the buses, was not accountable to him for the use of those buses or for the gain that he made out of them, but that he had prayed for the relief for accounts only to overcome the difficulty for forming an estimate of the amount of damages. He, however, was not able to quote any provision of law in which this method of receiving the amount, may it be for damages, was permissible. The suit was also framed so as to have accounts and not damages. The argument therefore has no force and cannot prevail. The learned counsel has raised no other arguments to support his appeal and this must, in view of the above discussion, fail.

8. The respondent's case as set up in the cross‑objections filed by them under Order XLI, rule 22, C. P. C. is primarily by way of a challenge to the decision of the learned Single Judge on the basis of the legal bar under section 69 (2) of the Partnership Act. On facts, the findings about the date of the original agreement of sale, the terms of the same, the passing of the hundis, and also the case of three buses which the respondent No. 1 did not claim to be his own, were disputed.

11. Mr. Riazul Hassan the learned counsel for respondent No. 1, however, has argued his case mainly on the basis of the legal bar to the filing of a suit in terms of section 69 (2) of the Partnership Act. According to him the appellants could not have filed this suit for possession of the 9 buses as they admittedly formed a Partnership, Malihabad Bus Service, and which partner ship was not registered at the time of filing of the suit. He contended that though the plaint itself is in the name of three appellants suing in their individual names, without expressly showing that they were partners in a Firm or that they sued as members of a firm, but they described themselves in the very first para of the plaint in these terms :‑

12. "That the plaintiffs are partners of Malihabad Bus Service under an oral partnership as plaintiffs Nos. 1 and 2 are the real brothers inter se and plaintiff No. 3 is cousin of the plaintiffs Nos. 1 and 2 "

13. Having thus described themselves, they stated in para. 7 of the plaint that they spent a sum of Rs. 45,000.00 and Rs. 10,000.00 over repairs, renovation etc. of the buses and also towards taxes and insurance and this is shown from the account books of Malihabad Bus Service. According to the .counsel therefore, the plaintiffs were partners in a firm on their own showing, and could not now say that the suit was not by a firm or for the benefit of a firm. In reply to this argument Mr. Z. H. Chishti, the learned counsel for the appellants contended that the contract of purchase of the buses which was entered into by the appellants was dated 31‑3‑1964 and at that time the partnership i.e. Malihabad Bus Service had not come into existence at all. The Partnership Malihabad Bus Service which was admittedly unregistered was formed much later i.e. either in May or June 1964. This partnership was by an oral agreement, and this fact is deposed to by witness Ansar Ahmed Khan, one of the plaintiffs.

14. Some documents from the files produced by another witness for the .appellants, namely, Farid Ahmed of the office of the Regional Transport Authority also show that the appellants bad signed the same on behalf of the Malihabad Bus Service, but these are dated in the month of June 1964 and after. There is no document signed on behalf of this Partnership Malihabad Bus Service at an earlier date. From this also it was being shown that the partnership actually came in existence much later than the agreement by which the buses were purchased by the appellants. It was therefore argued that the plaint being signed by the three appellants in their individual name and the contract being of an earlier date than that of the .creation of the partnership itself, section 69(2) of the Partnership Act was no bar to the filing of this suit.

15. Although the respondent No. 1 in his written statement had set up a case that the agreement with him was made in June 1964, regarding sale of six buses which belonged to him, but this fact was not proved by him as no :evidence was adduced by him. He himself also did not step in the witness box to support his case. The learned Single Judge also found that the date of the transaction of sale was in March 1964 and not in June 1964, the .conclusion therefore was drawn in favour of the appellants that the Partner ship Malihabad Bus Service came into existence after the purchase of the nine buses and not before or at the time of purchase. In fact the appellants had spent a large amount of money to put these buses in order before bringing the same out on the road, so it was very probable that the oral partnership ,was formed after all this work was completed and not before that.

16. Now section 69 of the Partnership Act reads as follows :‑

17. "S. 69.‑(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in 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 partners in the firm.

(3) The provisions of subsections (1) and (2) shall apply also to a claim of set off or other proceeding 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 account of a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(b) the powers of an official assignee, receiver or Court under the Presidency‑towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner.

(4) This section shall not apply‑

(a) to firms or to partners in firms which have no place of business in the (State), or whose places of business in (the State) are situated in areas to which, by notification under section 55, this Chapter does not apply, or

(b) to any suit or claim of set‑off not exceeding one hundred rupees in value which, in the Presidency‑towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882, or outside the Presidency‑towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 or to any proceedings in execution or other proceeding incidental to or arising. from any such suit or claim."

18. Mr. Riazul Hassain, the learned counsel for the respondent No. 1 relied upon some cases‑

(1) A I R 1953 Pepsu 37 (Hanuman v. Radha Kishan),

(2) A I R 1942 Mad. 634 (Garevdhandas Takersingh v.

112. Abdul Rahim and others); and

(3) P L D 1961 Kar. 335 lJaffar Khan v. Muhammad Achar). to support his contention that section 69 (2) of the Partnership Act operated as a bar to the present suit and therefore the decree passed against him should be set aside. The facts of these three cases were fully considered and discussed by the learned Single Judge and found to be distinguishable. The present suit is actually filed by the three appellants, without any description of being a partnership firm and with a further statement that they had entered into the agreement of purchase of the buses. However the learned Single Judge had on evidence accepted the position that the partnership was not in existence at the time of the agreement of purchase and on that consideration decided the issue of the bar under section 69 (2) of the Partnership Act being not applicable in this case.

19. But there is yet one more factor which the learned counsel for the respondent No. 1 seems to have overlooked. The suit filed by the appellants was for possession of the buses which according to them were forcibly and wrongfully taken away from them by the respondent No. 1. The suit was not only for possession of the nine buses which the appellants had purchased earlier by an agreement, but it was also for possession of some articles which were not the subject‑matter of the said agreement, but had also been taken away by force alongwith the said nine buses. The plaint in para. 9 described this act of the respondent as :‑

20. "That on 14‑7‑1964 the defendant illegally and maliciously, by taking the law in his own hands, forcibly took possession of the said nine buses in running condition alongwith the furniture, store, spare parts and jeep car Engine No. 107720‑C, Chassis No. 9115346 belonging to the wife of plaintiff No. 2, Ansar Ahmed Khan."

21. It clearly states that Chassis No. 9115346 which was also subject of the forcible taking, belonged to the wife of appellant Ansar Ahmed Khan. Thus the movable property taken away forcibly was not limited alone to the 9 buses that were purchased by the appellants. The learned Single Judge in deciding issues Nos. 11 and 12 decreed the suit of the plaintiff for return of the nine buses as well as the other articles mentioned in para No. 9 of the plaint. This relief granted to the appellants is obviously covered by section 11 (a) of the Specific Relief Act, which is in the following: terms :‑

22. "11. Any person having the possession or control of a particular article of movable property of which he is not the owner, may be compelled specifically to deliver it to the person entitled to its immediate possession in any of the following cases

23. (a)_________________

(b) _________________

(c) _________________

(d) When the possession of the thing claimed has been wrongfully, transferred from the claimant."

24. This relief is granted by the Court, in cases, amongst others, when there has been a wrongful transfer of the possession of the property from the claimant, and that is the case of the appellants in their pleadings as well as evidence adduced in Court. A defence that was available to the respondent was one by way of claiming the ownership of the property itself, in which case this relief could not be granted by the Court. The respondent No. 1 attempted to set up a case of ownership by pleading retransfer of the property to him by the appellants by a separate agreement, but this he failed to prove

25. In these circumstances the relief that was claimed by the appellant was not dependent upon any terms of an agreement or a contract. The property having been forcibly and illegally taken away, there could possibly be no contract to restore the same as in fact a criminal act was alleged to have been committed in the process of such taking. The contract by which the nine buses were first sold to the appellants in March 1964 was already complete, and could not now be relied upon to plead a bar under section 69 (2) of the Partnership Act. This section only bars a suit for enforcing a right arising out of a contract. And the question, therefore, arises, whether in the absence of any contract which would give a right of retaking the property taken by force, the bar contemplated by section 69(2) would be operative.

26. In the case Province of West Pakistan v. Asghar Ali Mohd. Ali & Co. (P L D 1968 Kan 196), it was held that a suit not seeking to enforce a right arising from a contract is not hit by section 69 of the Partnership Act. In that case there was originally an agreement of purchase and sale which was discovered by the plaintiffs to be ab initio void as having been forbidden by law. A suit was therefore filed by them seeking restoration of the advantage that had accrued to the defendants on account of that void agreement It was held that this suit for restoration of the advantage could not be described to be a suit to enforce a right arising from a contract. Such a relief is claimed by virtue of section 65 of the Contract Act which reads :‑

27. "When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it."

28. Hence a suit for restoration of such an advantage is completely different from a suit under the terms of the agreement or the contract which is discovered to be void. The two causes of action are entirely different. In this view of the case, section 69 was held not t‑, hit the suit for recovery of compen sation.

29. In the present case also the original contract between the parties was complete when the possession of the 9 buses transferred to the appellants by respondent No. 1. If there had been any breach on the part of the respondent in so delivering possession, a suit for obtaining the same would have been a suit to enforce a right arising out of that contract. But after a lapse of several months the possession of the 9 buses is lost by the appellants on account of a criminal act of the respondent No. 1. This act could never arise out of the contract between the parties. The illegal act of the respondent No. 1 gave a separate cause of action in law which would be available to them against any person, be he a party to the contract or not. Such a cause of action is detachable, and could be conceived irrespective and in spite of the terms of the contract.

30. It is thus very clear that the provision of the bar made in section 69 (2) of the Partnership Act is not attracted to the facts of this case at all. No other argument is raised in support of the cross‑objections filed by the respondent No. 1 in the result, both the appeal and the cross‑objections !Filed in this case are rejected, but with no order as to costs.

31. DORAB PATEL, J ‑I agree.

32. S. A. H. Appeal and cross objections rejected.