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Suit No. 89 of 1961, decided on 20th January 1966.
S. 7 (iv) (c) & 17 ----Declaratory suit‑Plaintiff in addition to declaration praying for consequential relief‑Case governed by S. 7(iv)(c)‑Specific Relief Act (I of 1877), S. 42.
Gurdawara Puram Hans Mahatma Panap Duss Ji Maharaj and another v. Gopi Chand and others A I R 1941 Lah. 265, ref.
S. 16‑Undue influence- Woman entering into contract literate having full business aptitude as well as capable of looking after her own interest‑Not entitled to any special consideration.
Poosihurai v. Kanappa Chettiar and others A I R 1920 P C 65 ; Chainta Dasya v. Bhalku Das A I R 1930 Cal. 591 ; Qamar Ara Begum v. Sultan Begum and others A I R 1930 Oudh 131 ; Mst. Anupa Bai wife of Gorelal Kirar v. Bhagwant Singh and others A I R 1938 Nag. 470 ; Tungabhai Bhratar Purushottam Shamji Kumbhajkav v. Yeshwant Dinkar Jog and another A I R 1945 P C 8; Ram Kulap Pande v. Bansidhar and another A I R 1947 Oudh 89 and Thungachi Nachial and another v. Ahmed Hussain Malumiar and others A I R 1957 Mad. 194 ref.
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-----‑ Dissolution ‑ Agreement entered into on dissolution‑Can be set aside on ground of error to concealment of truth by other partner.
Law v. Law (1905) 1 Ch. D 140 and Lindley on Partnership, 12th Edn., p. 516 ref.
--- S. 16‑Person seeking to set aside contract alleged to have been entered into by him on false and fraudulent representation‑Should be prompt in seeking redress‑Lapse of long time disentitles such person to seek any relief from Court.
United Shoe Machinery Co. of Canada v. Brunet and others 1909 A C 330 ; Thomas Clarke v. Samuel Auchmuty Dickson, John Williams and Thomas Gibbs 120 E R 463 and Sheffield Nickel and Silver Plating Company, Limited v. Unwin (1877) 2 Q B D 214 ref.
Khalilur Rehman for Plaintiff.
K. A. Ghani for Defendant No. 1.
M. Y. Nizami for Defendant No. 2.
Dates of hearing : 12th October 6th and 7th December 1965.
This is a suit for cancellation of the deed of dissolution of partnership, for rendition of account and appointment of Receiver in respect of the partnership business carried on under the name and style of Salika Sewing Machine Company, Karachi. It has been brought under the following circumstances.
2. In this suit the dispute between the parties is in respect of Salika Sewing Machine Company, Karachi which was a partner ship business. On 20th November 1951, Defendant Usman Muhammad and Haji Abdul Karim and one Dada Allarakhia started to run the business of hire, hire purchase sales and repairs of sewing machines and for conducting sewing coaching classes. Haji Abdul Karim made an investment of Rs. 40,000. Usman Muhammad defendant No. 1 and Dada Allahrakhia made investment in the said business in the sum of Rs. 5,000 each. On 25th August 1952, Dada Allarakhia retired from the partnership and his share reverted to the continuing partners in equal shares. Thus defendants No. 1 and 2's share in the said business was 8 Annas each. On 14th January 1953, Aishabai, the plaintiff was admitted in the partnership business with an investment of Rs. 10,000 and her share was fixed at annas 4 in a rupee. The share of the other partners was 6 annas each. Under the terms of partnership each partner was entitled to draw Rs. 200 per month.
3. In 1954 plaintiff and defendant No. 2 fell out from defendant No. 1 and filed suit No. 1182 of 1954 in the Chief Court of Sind for dissolution of partnership and accounts. In this suit an ad interim Receiver was appointed by the Court. On 10th December 1954, the parties compromised the matter by compromise application Exh. P. W. 1/3. Under the compromise cash, accounts books and the stock in future were to be in charge of defendant Haji Abdul Karim. Coaching classes were to be in charge of the plaintiff. Defendant No. 1 was made incharge only of outdoor work. In case of defendants Nos. 1 and 2 their monthly allowance was raised to Rs. 400 per month. Plaintiff was to continue to receive monthly allowance of Rs. 200 per month. On 1st February 1957, defendants Nos. 1 and 2 entered into a side partnership' business for sale of sewing machines under the name of Salika Sewing Machine Selling Agency by deed Exh. D. W. 1/4. This was with the consent of the plaintiff, who attested the above partnership deed as a witness. In this way the industry business was separated from the selling agency business. Plaintiff and defendants Nos. 1 and 2 were partners only in the industry business.
4. Plaintiff's case is that the defendant No. 1 is a very shrewd person. In 1955, he suggested that the business of repairing sewing machines should be converted into Industrial Manufacturing and Sewing Machines and persuaded defendant No. 2 to purchase machinery for manufacturing the sewing machines sad to hire them out to the partnership business. For this purpose he also persuaded defendant No. 2 to take the premises situated at Firdous Colony, Golimar, Karachi on rent. Defendant No. 2 purchased the machinery as and when required and gave them on hire to the firm. Gradually the industry started and the firm successfully obtained licences for raw materials. It is alleged that defendant No. 1, who had evil designs to mis appropriate the business to himself, manipulated the business in such a way that the plaintiff and defendant No. 2 were deprived of all control over the business of the firm. At first defendant No. 1 successfully designed a separate partnership by the name of Salik3 Sewing Machine Selling Agency between himself and defendant No. 2 by the partnership deed dated 1st February 1957, referred to above on the pretext that by representing to the Income Tax Authorities that the industry was separate, it would be convenient for the firm to save income tax and sales tax. The affairs of settling income tax and sales tax liabilities was solely in charge of defendant No. 1. In this way he obtained a further capital of Rs. 5,000 from defendant No. 2. It is alleged that by this design industry was separated from selling agency. Defendant No. 2 was assigned the job of keeping the account of sale only at the showroom at Frere Road and all affairs of industry including accounts remained in the hands of defendant No. 1 and were completely kept out of the notice of the plaintiff and defendant No. 2. It is further alleged that the coaching classes of the Training Institute in charge of the plaintiff were also reduced to an insignificant position because most of the open space was occupied for industry purposes.
5. Plaintiff has further alleged that by the end of February 1958, the plaintiff's father, aged about 75 years, had become very ill as he suffered from a sudden attack of palpitation of heart and it was feared that he would not survive. The plaintiff, a widow having no other male member to help them was very much worried for his health. Defendant No. 1 took undue advantage of her helplessness and pitiable condition and made fearful representation to them that the partnership was likely to suffer heavy losses as the Income tax and sales tax authorities had decided to levy heavy taxes and there was no money available for the payment of technicians whose recurring expenses amounted to Rs. 7,000 per month. He demanded further capital to save the business froth running into loss. This led them to believe that they would lose every penny invested in the business. It is alleged that about the same time defendant No. 1 and some of his friends, who posed as sympathisers of the plaintiff and defendant No. 2, regularly day in and day out approached them and stated that there was bound to be dissolution of the firm on the likely death of defendant No. 2 and in that event defendant No. 1 will have chances of usurping the whole business; and the plaintiff, being a woman would not be able to recover their investments or profits. They were told that defendant No. 1 alone being conver sant with the machinery will have the entire charge of the business and that even if her father survived, they would not be able to run the business as they were not conversant with the technique of running the factory. It was suggested to them that if defendant No. 1 could be persuaded to pay the capital investment they would be lucky to save themselves from losses.
6. It is alleged that subjected to such undue influence and coercion, the plaintiff's father, who was completely incapacitated in mind and body, was persuaded to accept the return of whatever capital investment the defendant No. 1 was going to make to them. The plaintiff being a woman was not allowed to have any say in the matter. It is alleged that it was in these circumstances that defendant No. 2 was persuaded to agree to receive one lac and ten thousand rupees and on 4th March 1958, was made to execute the dissolution deed drafted by Defendant No. 1 without allowing him any time to have any independent advice. The plaintiff also on account of stron1 persuations had to subscribe her signature to the deed of dissolution.
7. Plaintiff's further case is that the amount of one lac 10 thousand received by the plaintiff's father was short of even the capital, they had invested in the business. This did not include their profits accumulating in the firm or the value of their share in the goodwill and assets of the firm which was of much more value than the amount paid. On these grounds it is alleged that the above deed of dissolution was obtained by undue influence and coercion and is ineffective in law. Plaintiff further alleged that she had not been paid a single penny out of her capital or towards the profits and the value of her share in the goodwill and assets of the firm. The dissolution deed is also attacked on the ground that it is based on untrue facts and misrepresentations. It is alleged that no accounts were drawn up or taken and settled as recorded in it. The firm never suffered any loss. The plaintiff and her father were kept in complete darkness about the stock lying in the factory and of the sales effected in black market. The delay in filing the suit has been explained on the ground that she had no immediate opportunity to repudiate the dissolution deed as her father's illness prolonged and she remained under conti nuous strain. For these reasons the plaintiff claims that the dissolution of the partnership is not binding upon her and is liable to be set aside as it was brought about in utter disregard and violation of the partnership and the agreed terms governing the partnership.
8. In his written statement Haji Abdul Karim, defendant No. 2 has supported the case of the plaintiff. In para. 7 of tire written statement he has stated that defendant No. 1 cad never the intention of creating the industry for the common benefit of all and devised ways and means by which he made the defendant No. 2 incur large sums over the purchase of the machinery which were hired to the firm. However the production was exclusively controlled by defendant No. 1 and he did not render any accounts on the false plea that an account will be duly submitted to the plaintiff by answering defendant No. 2. In para. 9 of the written statement he pleaded that indeed the scheme of the said partner ship of Ist February 1957, was cleverly designed by defendant No. 1 by forcing the plaintiff and defendant No. 2 to go on investing as much amount as possible, and ultimately to block the entire monies of the plaintiff and defendant No. 2 and forcing them to agree to the dissolution on his own terms. He alleged that the trust reposed is him was exploited against them in his favour. In para 12 of the written statement the defendant has alleged that at the time of dissolution defendant No. 1 had even extended threats to his very life. In para 19 of the written state ment he pleaded that he was not aware of the fact that defendant No. 1 concealed the whole stock of machineries which were sold in black market surreptitiously. He alleged that an amount of Rs. 2,60,000 and an earning made in black market amounting to Rs. 1,86,000 were misappropriated.
9. The suit was resisted on behalf of Defendant No. 1. In the written statement he pleaded that the suit was barred under the law and was liable to be dismissed, as the firm Salika Sewing Machine Co. was not registered under the Partnership Act. It was further pleaded that the suit was not properly valued and as required by law court‑fee had not been paid. The contesting defendant denied all the allegations made against him. In para. 6 of the written statement he stated that the manufacturing one was agreed to be started by mutual discussion between all the three partners. He alleged that defendant No. 2 is a shrewd business man and he never allowed his finances and earnings to remain stationary for any length of time. He denied that the defendant No. 2 purchased the machinery as alleged or gave them on hire to the firm. According to him, the purchases were made by the defendant No. 2 on behalf of the him and the price paid by him was credited in the account books as additional capital investment of defendant No. 2 in the firm and was duly settled at the time of dissolution of the firm. He alleged that the hire charged by defen dant No. 2 was in fact interest realised in consideration of addi tional capital advance made by him to the firm from time to time for purchasing the machinery. He admitted that the firm took the premises on rent at Firdous Colony in Karachi. He pleaded that the alleged hire was interest on the additional capital investment of defendant No. 2 as he did not want to describe it as interest on the plea that he would be criticised for charging the same as un Islamic. He admitted that the firm got licences. He, however, submitted that it was agreed between the parties that defendant No. 2 would only charge profit in the shape of hire for the additional capital investment made by him upto the time the firm had not received licences and production had not started. April 1957, the industry had started production and no hire or interest was paid to the defendant No. 2.
10. The contesting defendant denied that at any time he had any designs to misappropriate tile business himself. He further denied that he under any scheme manipulated that the plaintiff and defendant No. 2 should be deprived or all the control over the business of the firm. He denied that the separate partnership by the name of Salika Sewing Machine Selling Agency between him and defendant No. 2 was made under any design or that he suggested to defendant ‑No. 2 that by representing to the authorities that the industry was separate, it would be convenient for the firm to save income tax or sales tax. On the contrary he alleged that this partnership was made at the suggestion of the defendant No. 2 and with the mutual consent of all the partners. He denied that the affairs of settling the income‑tax and sales tax was solely in his charge. According to him in fact all returns and accounts used to be prepared by defendant No. 2 under his own supervision. The contesting defendant denied that separation of industry of Salika Sewing Selling Agency was under any design. He alleged that all the accounts of the Selling Agency and Industry were exclusively kept and maintained under the direction of defendant No. 2. He denied that only accounts of the show room remained with defendant No. 2 and that all the affairs of the industry including accounts thereof were with him or that he took the same in his hand or were never brought to their notice. The defendant's case is that he being an illiterate man, having only experience in technical knowledge always remained busy in the production work and all other affairs and business including supervision and accounts were under the direct control of defendant No. 2 who was actually assisted by the plaintiff. They kept themselves fully aware of all the facts and everything was in their own control, supervision and reach. The defendant denied that the coaching classes were reduced to the alleged insufficient position. According to him, in fact from 1955‑56 to 1957‑58 there was no significant difference in the income from coaching classes. The contesting defendant took the plea that the plaintiff's father is not of 75 years of age. He further submitted that in spite of his alleged age the defendant No. 2 has all along been a very active man and taking part in all the business and wordly affairs. He denied that in February 1958, the condition of defendant No. 2 worsened as alleged. He further denied that defendant No. 2 had an attack of piles or palpitation of heart or it was feared that he would not survive. He denied that the plaintiff was a widow. According to him she is a divorcee. In para. 12 of the written statement the contesting defendant emphatically denied that he found any time or opportunity or took any undue advantage of any pitiable circumstances or made any representations, fearful or otherwise, or represented that there were bound to be losses in the firm as there was no money to pat the technicians under his charge or Rs. 7,000 per month were to be paid to the technicians, According to him the salary of technicians was about Rs. 2,100 per month. He further denied that there was any alleged recurring liability of that nature and that income‑tax and sales tax authorities had decided to levy heavy taxes on the firm, or that the whole business was likely to be shattered and that there was further need of a lac of rupees. He denied that any alleged representation was made or that any such contingency existed. He pleaded that all salaries were paid by the defendant No. 2 and all accounts and affairs and business of the firms were under the supervision of the defendant No. 2. He alleged that both plaintiff and defendant No. 2 are very shrewd and clever business-men and were in the know of each and everything and it would have been impossible to make them believe anything which was not in accordance with the facts: He denied that he had no money or was not in a position to meet his liabilities or that the alleged liabilities of taxes were to be met or recovered from the plaintiff or her father.
11. The contesting defendant denied that some of his friends posed as sympathisers of the plaintiff and defendant No. 2 and by making fearful representations persuaded them to enter into the dissolution deed dated the 4th March 1958, Exh. D. W. 1 5. He emphatically denied that the plaintiff's father was subjected to any undue influence or coercion or that he was incapacitated in mind or body or he was ill or seriously ill. He pleaded that the deed of dissolution was drawn up after mutual agreement between the plaintiff and her father, defendant No. 2, and defendant No.'1 with the aid of independent legal advice which was received by them and was duly verified before a Justice of Peace before all the parties signed. In para. 16 of the written statement lie pleaded, that the Plaintiff and defendant No. 2 of their own free will decided to retire from the partnership business and to dissolve the firm. Thereupon negotiations started between the parties. The Plaintiff and her father, defendant No. 2 put forward suggestion that either the defendant No. 1 or the plaintiff and defendant No. 2 may settle the accounts and interests of the other party in every thing concerning the partnership whatsoever and give discharge, with regard to the partnership liabilities, sales tax, income tax, etc. He further pleaded that upon the suggestion and offer made by plaintiff and her father, defendant No. 2, after mutual bargaining, agreed to accept fixed lump sum consideration for their rights and interests in the partnership and the defendant No. 1 agreed to pay the lump sum full consideration of Rs. 1,05,000 to them, in spite of the fact that the firm had suffered losses. Thereafter the plaintiff and defendant No. 2 had nothing to do with the firm.
12. It is alleged that the plaintiff and defendant No. 2 finding out that the contesting defendant had expanded the business and was making profit, after a long silence in order to knock out more money from defendant No. 1, have filed the suit under consideration. They have filed false cases against him. Defendant No. 2 had filed Suit No. 106/1960 illegally and falsely claiming that the machineries of the firm belonged to him, and sought attachment before judgment in order to coerce him to submit to his illegal claims. 1n the same way the plaintiff and defendant No. 2 have filed the present suit. He alleged that the plaintiff and defendant No. 2 who always come to the Court together and live in the same house are acting in conspiracy and in collu sion and are making illegal complaints and tiling false cases one after the other, sometimes in their name and sometimes in the name of others and are thereby abusing the process of the Court. The defendant averred that the amount of rupees one lac five thousand paid to the plaintiff and defendant No. 2 truly represent their share in the partnership business and further pleaded that the deed of dissolution was for consideration. He also pleaded that the amount in question was paid to them, together and, therefore, the allegation of the plaintiff that she had not been paid any amount out of rupees one lac five thousand is a false one. He further denied that the firm had suffered a loss, or huge stock was available as alleged or that the plaintiff and her father were kept in darkness. On the contrary, he has alleged that the accounts of the business were with defendant No. 2, who used to maintain all the accounts and was in the full know of the affairs of the partnership business. Plaintiff, who is a literate lady, used to attend with her father and had also full knowledge of the affairs of the business. He denied that the machines produced by the firm were sold in the black market or he had made any profits surreptitiously.
13. The contesting defendant's case is that since that date of dissolution he had undergone great strain and hard labour in improving the concern. Due to his own personal working day and night as the sole proprietor, the firm has flourished and has made a good name. He had brought in more machinery and invested large amount, purchased the building at Frere Road, Karachi for the business, and land at S. I. T. E., Karachi and bad increased the production and goodwill by his own personal interest. The plaintiff and defendant No. 2 want to take advantage of this position and in order to blackmail him and to knock out more money from him have filed the suit under consideration.
14. On 7th March 1963, on the pleading of the parties as many as 11 issues were struck which are reproduced below :‑
(1) Is the suit not properly valued
(2) Is the suit time‑barred
(3) Is the suit not maintainable as the firm was not registered
(4) Is the plaintiff estopped from making the claim in suit
(5) Is the plaintiff not entitled to the relief claimed in equity as she can be compensated for the loss she has suffered
(6) Did Defendant No. 1 manoeuvre and control the entire business and industry of the firm himself thereby depriving plaintiff of any access to the same
(7)(a) Was the Dissolution Deed dated 4‑3‑58 executed under undue influence, coercion, etc Upon the plaintiff in the circum stances and on the incorrect and false representation, etc. as alleged in paras. 12 to 20 of the plaint. If so to what effect
(b) Can the said Dissolution Deed be set aside on the grounds alleged in paras 12 to 20 of the plaint
(8) Was the plaintiff paid consideration for the said dis solution deed dated 4‑3‑58 or was she paid any money in connection with the same .. If not to what effect
(9) Were the accounts of partnership business known to the plaintiff or could the same be easily known or available to her
(10) Did the Plaintiff and Defendant No. 2 themselves desire dissolution of the firm under independent legal advice available and received by them, and on the basis of the same they agreed to accept Rs. 1,05,000.00 in complete satisfaction of their share, etc. in the firm
(11) Can the plaintiff alone file the suit
In support of their case the parties have adduced both oral and documentary evidence. The plaintiff has examined herself as P. W. 1. She has examined two more witnesses, P. W. 2 Dr. Zubair and P. W. 3 Haji Balawal of Habib Bank Limit‑.d, Karachi Defendant No. 2 had not appeared in the witness box nor has he examined any witness in support of his plea. Defendant No. 1 has produced himself as D. W. 1 as witness in the case. He has further produced D. W. 2 Ahmed Daud, D. W. 3 Dada Noor Muhammad, D. W. 4 Haji Abdullah, D. W. 5 Nasim Pasha and D. W. 6 Nasirali Malik.
15. It is not necessary to discuss Issue No. 2 and Issue No. 3. It was conceded by Mr. Ghani appearing for the contest ing respondent that the suit is within time. Learned counsel further conceded that in view of the certificate of registration of partnership, Exh. P. W. 1/2, the plea that the suit is not maintainable for non‑registration of the partnership business has no force. I would, therefore, decide Issues Nos. 2 and 3 against defendant No. 1.
16. Issues Nos. 4 and 5 have not been pressed and it is not necessary to express any opinion on these questions.
17. The plaintiff has valued the suit for purposes of court fee and jurisdiction at Rs. 200 for declaration and cancellation of the deed and at Rs. 26,000 tentatively for accounts and at Rs. 200 for appointment of Receiver. The defendant No. 1 has pleaded that the curt‑fee paid is insufficient. Mr. Khalilur Rehman, learned counsel appearing for the plaintiff, has contended that the suit is in the nature of contemplated under section 7(4)(c) and is properly valued. In support of his contention learned counsel has relied on the case of Gurdawara Param Hans Mahatma Panap Dass Ji Maharaj and another v. Gopi Chand and others (A I R 1941 Lah. 265). In that case a Gurdwara brought a suit against the Maha it praying that a document executed by certain person in relation to the property mentioned in the plaint be declared null and void and that the document be withdrawn from the defendants and cancelled. This suit was valued both for the purposes of court fee and jurisdiction at Rs. 1,100 and a court‑fee of Rs. 120 was paid. A Division Bench of Lahore High Court held that the suit whether regarded as falling under section 7(4)(c) or under Art. 17 the jurisdictional value had been fixed at a reasonable figure and the court‑fee paid was either enough or more than enough. Learned counsel for tile defendant has not been able to cite any other decision in support of his contention. But on going through the allegations made in the plaint it seems to me that the plaintiff has not fixed the valuation for purposes of court‑fee and jurisdiction as required by law. Had she fixed the valuation for purposes of court‑fee and jurisdiction in respect of cancellation of the deed at Rs. 26,000, I would have considered it as quite reasonable and sufficient. But in para. 23 of the plaint she has fixed the value for purposes of court‑fee and jurisdiction at Rs. 200 for declaration and cancellation of the deed. There seems to be some mistake in this respect. I would take it that the plaintiff has fixed the valuation for purposes of court fee and jurisdiction for cancella tion of the deed at Rs 26,000. Considering the plaint in this way I am of the view that the plaintiff has paid sufficient court- fee. In my view the precept case is governed by section 7(4)(c) because the plaintiff in addition to a declaration has further claimed the cancellation of dissolution deed dated 4th March 1958. Thus he has claimed both declaration and consequential relief and the ease is governed by section 7 (4) (c) of the Court‑Fees Act. According to the evidence produced in the case the valuation fixed by the plaintiff for her share in the amount paid to the parties at the time of dissolution appears to be round about Rs. 26,000 and, therefore, she has fixed the court‑fee and jurisdictional value at a reasonable figure. I would, therefore, decide the issue No. 1 against the defendant No. 1.
18. Issues Nos. 6 to 10 are connected with each other. These are the most important issues and have a bearing on the question raised by the plaintiff that the dissolution deed dated the 4th March 1958 is liable to be set aside. In this case the most important question, therefore, is whether the deed of dissolution was obtained by misrepresentation of facts, undue influence or coercion or by concealment of the affairs of the partnership business. It is not disputed by the parties that the partnership business is governed by the terms agreed upon between them in Suit No. 1182 of 1954. Under Exh. P. W. 1/3 the ‑compromise deed, cash, account books and the stock of the partnership business were to be in charge of defendant No. 2. Coaching classes of the partnership business were to be in charge of the plaintiff. Defendant No. 1 was only to look after the outdoor work of the business. He was also to deal with the technical side of the business. It is quite clear, therefore, that under the terms of the partnership its cash, account books and tile stock were solely in charge of defendant No. 2. It is however alleged that after the partnership had started a Sewing Machine Manufacturing Industry, the industry business was shifted to Golimar and only show room business remained at Frere Road. Thereafter, the accounts of the factory were maintained by defendant Usman. The plaintiff's case is that she was in charge only of the Ladies Industrial Home and was never informed about the business carried on by the Firm and no account was ever rendered nor was any profit paid to her. She was only paid Rs. 200 per month as maintenance allowance. Her further case is that she had invested about Rs. 40,000 in the business and the dissolution was effected between the parties without rendition of accounts and the amount paid to her and defendant No. 2, her father, did not represent the investment made by them and the profits earned by them in the partnership business. She alleged that the defendant No. 1 took advantage of the serious illness of her father and by practising undue influence and coercion on her father obtained the dissolution deed, Exh. P. W. 1/5. Her version of the circumstances in which the above deed was obtained is as under :‑
"My father became seriously ill in January 1958. He was suffering from palpitation of heart and piles. He had become very weak. He was under the treatment of one Dr. Zubair He was not in a position to walk and could not understand the business affairs. Usman used to bring his friends to our place. He used to inform us that the business was running at a loss. The firm has to pay heavy income‑tax and other taxes. The firm requires a further investment of one lakh rupees otherwise the firm will go into liquidation. He threatened us that the entire investment of ours will go waste and we were likely to suffer more. He was accompanied by other friends. He used to say that your father will die and I will not be able to get anything because I was a woman. I am rot aware at what place the dissolution deed was prepared. I did not instruct any lawyer to prepare the dissolution deed."
In support of her case defendant No. 2 was seriously ill, she has examined P. W. 2 Dr. Zubair. This witness stated that he treated Haji Abdul Karim, defendant No. 2 from January 1958 to March 1958 and proved the medical certificate Exh. P. W. 2/1 dated the 3rd March 1963. The witness stated that he is a T. B. Specialist and employed in the Karachi Municipal Committee. According to him defendant No. 2 was bleeding too much due to piles, was unable to walk and was suffering from palpitation. At times he was unable to follow the talks. The evidence of this witness has not in the least impressed me. In the first place, the certificate on which the witness has relied is of the year 1963. It is difficult to accept his statement that he remembered the illness suffered by defendant No. 2 in 1958 and was able to give a correct and proper certificate of his illness in the year 1963. Apart from this the witness is a T. B. Specialist and I am not prepared to accept the statement that he treated defendant No. 2 for piles and palpitation of heart. Defendant No. 2 has not appeared in the witness box. He was the best witness to depose about his illness. The very fact that he did not appear in the witness box shows that he was not ill as alleged by the plaintiff in January, February or March 1958. If it was a fact that defendant No. 2 was ill in March 1958, defendant No. 2 would have definitely taken advantage of it and appeared as witness in the witness box to support the case of the plaintiff. Secondly there is overwhelming evidence on the record to show that defendant No. 2, at the time when the deed of dissolution was effected was in perfectly good and sound health. Defendant No. 1 has produced the cash memo bills which Defendant No. 2 used to prepare about the sale effected in the showroom. Exh. D/15 shows that defendant No. 2 had issued cash memos from 1957. Exh. D/13 shows that the issued cash memos from July 1957 to 3rd October 1957. Exh. D/14 shows that he issued cash memos from 5th October 1957 to 17th December 1957. Exh. D/4 shows that defendant No. 2 issued. cash memos from 18;h December 1957 to 7th February 1958. Exh. D; 3 shows that the defendant No. 2 issued cash memos from 8th February 1953 to 3rd March 1958. Exh. Y/I shows that defendant No. 2 even issued a cash memo. after dis solution of the partnership, on 5th March 1958, that is one day after the dissolution was effected. These documents leave no doubt in my mind that the plaintiff's case that defendant No. 2 was not keeping good health or was seriously ill has no foundation what soever. If that was so, there is no reason why defendant No.2 had been regularly attending to the business and issuing cash memos. The plaintiff's version that the cash memos used to be taken to the house of defendant No 2 for preparation is also a far‑fetched story because admittedly the house of defendant No. 2 is situated at a distance of about three quarter of a mile from the showroom of the partnership business on Ferer Road. It was admitted by the plaintiff that they were residing at Hospital Road which is at a distance from the business premises. I am not prepared to believe that the customer could wait at the shop premises for the preparation of the cash memo by defendant No. 2 at his house. Besides, there is other oral overwhelming evidence on the record to prove that defendant No. 2 was keeping good health. D. W. 2 Ahmed Daud whom the plaintiff described that he was like a son to her father has stated in unequivocal terms that Haji Abdul Karim defendant No. 2 at the time of the dissolution was in perfect good health. Similarly, D. W. 3 Dada Noor Muhammad and D. W. 4 Haji Abdullah have stated that defendant No 2 at the time of the dissolution was in perfect told health. It is in evidence of D. W. 5 Nasim Pasha of Eastern Bank that the amount of one lac ten thousand was deposited by Haji Abdul Karim on 4th March 1952, in the Eastern Bank, Karachi. It is further in evidence that Haji Abdul Karim and the plaintiff along with other persons visited the bank for the deposit of the amount of rupees one lac 10 thousand. Exh. D/19 proves that on 4th March 1958 this huge amount was deposited in cash by defendant No. 2 in his account in Eastern Bank, Karachi. Exh. P. W. 1/5 was also attested by Agha Sultan Mirza, Notary Public at his office. According to the evidence of D. W. Ahmad Daud and D. W. Usman both Haji Abdul Karim and Mst. Aishabai attended the office of the Notary Public in their presence. He attested the document in question. Therefore, except the bare statement of the plaintiff that defendant No. 2 was seriously ill at the time of the dissolution, there is no reliable evidence on the side of the plaintiff to support this fact. Defen dant No. 2, Haji Abdul Karim did not appear as a witness to support the case of the plaintiff. Admittedly Mr. Khalilullah, advocate, who filed the suit under consideration, prepared the draft of the dissolution deed and his was the best available evidence on the question of the alleged serious illness of her father at the material time, but no attempt was made to produce him to corroborate this version. In the absence of any reliable evidence and other circumstances discussed above, I would hold that the version of the plaintiff that defendant No. 2 was seriously ill at the time of the dissolution is not proved and cannot be accepted as good plea for the decision of this case.
19. The allegation of the plaintiff that she and defendant No. 2 were threatened or were persuaded by misrepresentation to enter into the above dissolution deed has not been satisfactorily established or proved on the record. Admittedly, under the compromise entered into between the parties in Suit No. 1182/ 1954 Haji Abdul Karim, defendant No. 2 was incharge of the accounts of the partnership. To a question put to her by the Court even the plaintiff admitted that "My father used to write the account books. Abdullah Bhai was not the employee of, the Company." It is, therefore, difficult to accept the contention of the plaintiff that her father was not in the know of the real state of affairs of the business or the accounts. In view of this admission the burden on the plaintiff to prove this fact was very heavy, which she miserably failed to discharge. On the other hand defen dant Usman has produced D. W. 4 Abdullah Bhai Exh. D6/A, the account clerk, as a witness to prove that he used to write the accounts of the firm under the directions of Haji Abdul Karim. The witness stated as under:‑
"I was working as an Accountant with Salika Sewing Machine Company since 1953 on part time basis. I used to attend to this work in the evening. Plaintiff filed a suit in 1954. In that suit Nazir was appointed as Receiver by the Chief Court of Sind. He took custody of the account books and signed the account books. I produce one of the account books, Exh. D/22. It is in my handwriting. I used to write these accounts under the direction of the plaintiff. After the suit was compromised Haji Sahib used to direct me to write the 'account books. On some occasions Aisha Bai was also present. Haji Sahib used to prepare cash memos and the bills. He maintained rough kutcha accounts. From these documents I used to prepare pucca accounts. The kutcha accounts were maintained by the plaintiff in a pocket book. He used to keep it with himself. The firm was maintaining cash book and a ledger."
Thus this witness was even writing the account books of the firm in 1954, at the time when the plaintiff and defendant No. 2 filed a suit for dissolution of partnership in the Chief Court of Sind. This evidence has remained unrebutted. I am, therefore, satisfied that the case of defendant No. 1 that Haji Abdul Karim used to write the katcha accounts and they were brought in the regular account books under his instructions by D. W. Haji Abdullah Bhai is sufficiently proved on the record. This witness further proved the investment made by the parties in the business. He stated that in the ledger the account of Haji Abdul Karim showed that the opening balance for the year 1957‑58 in the account No. 1 was Rs. 57,865‑8‑6 and in the other account his opening balance as shown in the account books was Rs. 21,899‑11‑0. He further stated that the closing account showed that during the year a sum of Rs. 64,078 was due to him. The entries in the account books Exhs. D/46 and D/ 47 which related to the investment of Haji Abdul Karim was stated to have been written by him under the instructions of defendant No. 2. 'I he witness stated that the opening balance of Aisha Bai in this year was Rs. 24,421‑1‑0. The closing balance of her account is in the sum of Rs. 14,453‑1‑0 and in the second account the opening balance is Rs. 25,166‑10‑0 and the closing balance is Rs. 27,500. He has proved the entries of the two accounts Exhs. D/50 and D/51 which disclose the final position of her account. According to him the final position of her account on 2‑3‑58 was in the sum of Rs. 40,219‑11‑0. He stated that Aisha Bai had full knowledge of the position of her accounts. Thus, according to this witness, on 2nd March 1958 Haji Sahib was entitled to Rs. 64,078 towards the investment and profits and Aisha Bai, plaintiff was entitled to Rs. 40,219‑11‑0. The plaintiff and defendant No. 2 thus was entitled to a total sum of about Rs. 1,04,297. The statement of this witness is further supported by the balance‑sheet filet by defendant No. 2 in the Income‑tax Department and referred in the assessment order Exh. D/3. In view of this corroborative evidence it is quite clear that the investment of the plaintiff and defendant No. 2 in the business was about the same which they were paid by defendant No. 1. It cannot, therefore, be said that the transaction in question was of an unconscionable nature or that the plaintiff has been deprived of her legitimate right or share in the partnership business. Mr. Khalilur Rehman, learned counsel for the plaintiff, contended that under the terms of the agreement of partnership deed statement of accounts was to be prepared every month, but that was not done. The plaintiff cannot take advantage of this lapse because the omission, if any, was on the part of her father. However, the contesting defendant has produced Exh. D/17 which shows that monthly stock account was taken regularly from January 1955, up to November 1955. Thereafter, on 8th April 1957, account Exh. D/16 was prepared by the parties which bears the signature of defendant No. 2. Plaintiff has denied the signature of her father bite besides reliable oral evidence I have compared it with his other signatures on the record and it cannot be doubted that it bears his signature. In view of such reliable evidence, the grievance of the plaintiff that she was kept in complete darkness of the business affairs, or its account is not well founded. It was next urged that defendant No. 1 entered into a separate partnership deed dated the 1st February 1957, with a view to defraud the partnership. This partnership was entered into by defendants I and 2 for Salika Sewing Machine Agency business. Its terms are contained in Exh. P. W. 1/4. This document dated 1st February 1953, is signed both by Defendant No. 1 and Defendant No. 2. It bears the signature of the plaintiff as an attesting witness. The plaintiff has not denied the knowledge of its contents. Therefore, she was fully aware of its implication. It is difficult to find out in what manner it had prejudiced the right of the plaintiff. The allegation that it was obtained on the plea of saving income tax is meaningless because if plaintiff had also been taken as a partner the profits would have been divided between more partners end that would have saved income‑tax. There is no evidence on the record to show that it was entered with any fraudulent intention and I would, therefore, not attach any importance to this circumstance.
20. This brings me to the next contention of the plaintiff that at the time of the dissolution no account was settled between the parties and that no value was fixed for the goodwill and the trade marks belonging to the partnership business. This allegation to a certain extent is supported by D. w. 2 Ahmed Daud and D. W. 3, Dada Noor Muhammad. Both the witnesses stated in their evidence that neither the stock of the partnership was checked in their presence nor were any accounts prepared by the parties before the final negotiations took place. But on the facts of this case this circumstance by itself cannot be a ground to cancel the Dissolution Deed Exh. P. W. 1/5. The parties themselves stipulated in the deed itself as under :‑
"Whereas the Party of the Second Part in dissolution of Partnership have put fourth, suggestions whereby either of the Parties may settle : the accounts and the interests of the other in everything concerning the partnership business, the assets, the goodwill, the proprietary rights in Trade Marks or otherwise in whatsoever licences, etc. and give dis charge with regard to partnership liabilities Sales tax, Income -tax, etc. and whereas in mutual offer and bargain, the Party of the Second Part have agreed to accept full fixed consideration for their rights and interests in the Partnership business and the Party of the First Part has agreed to pay the same full consideration to Party of the Second Part."
It will thus be noticed that under the tams of the deed the sum of rupees one lac five thousand was fixed by the parties on the basis of mutual offer and bargain. Considering that defendant No. 2 and plaintiff had full knowledge of the accounts and the amount fixed is quite substantial and represent their investment in the business any such omission can have no far‑reaching effect on the validity of the dissolution of partnership between the parties.
21. In my opinion, for the same reason, the fact that no separate amount was fixed for the goodwill and the trade marks of the business can have no adverse effect on the dissolution effected by the parties. Ire the dissolution deed itself the plaintiff and defendant No. 2 have stipulated to relinquish all their rights in the good will machinery, trade marks and other assets of the firm in consideration of the said amount paid to them. It, therefore does not lie is their mouth to make any grievance about it. This is not an unusual term and much fettish cannot be made out of this circumstance. The terms of the dissolution deed in this respect are such that they cannot be considered as unreasonable unless it was shown that they were based on concealment of facts, In this connection learned counsel appearing for the plaintiff brought it to my notice that after Martial Law was promulgated in Pakistan defendant No. 1 had filed a declaration under the Martial Law showing profits of over a lac of rupees earned by the firm which was not accounted for in the account books or state ment of accounts submitted to the Income‑tax Department.
Learned counsel, however, overlooked the fact that this related to the entire period of the partnership business, that is to say, from 1951 to 1,958. Besides, this was done in pursuance of a concession granted by the Martial Law Authorities and the defendant No. 1's explanation that he did so because he wanted to protect the business from the misdeeds of the plaintiff and defendant No. 2, who bad not disclosed the profits earned by them in the shape of hire money and commission earned cannot be lightly disregarded. It is in evidence that by getting a fresh declaration defendant No. 1 had not to pay much to the Income- tax Authorities. The plaintiff has not produced any evidence to show that she or her father had filed separate return for such earning. In these circumstances, this circumstance by itself cannot lead to the inference that the plaintiff or defendant No. 2 had no knowledge or were not fully conversant with the accounts of the firm or have been kept in complete darkness about it.
22. It was next contended that Defendant No. 2, who was in charge of the accounts of the factory at the time of dissolution did not disclose the details of the ready machines lying there and thus concealed the property belonging to the partnership. This contention has also no force. The plaintiff has not brought any evidence on the record showing the existence of any such manufactured articles at the time of the dissolution. Defendant Usman denied this allegation. He stated that whatever goods were moulded in the workshop were brought to the shop for finishing and were sold at that place. I see no reason to disbelieve him on this point. After all Haji Abdul Karim is a shrewd businessman. He used to maintain account of every panny spent in the factory. It is difficult for me to believe that he had no information about the machines produced or moulded at the workshop or that defendant Usman in this respect gained any undisclosed advantage over the plaintiff or her father. Bare allegation of the plaintiff in this respect cannot carry much conviction. I would, therefore, attach no importance to it.
23. Learned counsel then referred me to certain other circumstances for showing that the plaintiff's right in the partnership business suffered because defendant Usman had not disclosed to them the benefits and advantage that were likely to be received by the partnership in the near future about the time of dissolution. In this connection plaintiff's counsel referred to the statement of defendant Usman in which he admitted that, after a month of the dissolution of the partnership, the quota of the licences granted by the Government to the business firm was raised. He further referred me to the fact that the shop and the business premises in which the partnership firm used to carry on its business was transferred to defendant No. 1 under the Displaced Persons Compensation Act and in this way he managed to gain undue advantage over the plaintiff and her father. In my opinion, none of these circumstances has any material bearing on the facts of the present case. If the amount of the licenses had been increased before the dissolution and that had not been brought to the notice of the plaintiff and defendant No. 2 it might have been a good ground to advance the argument that the plaintiff's right in that respect was prejudiced. Neither defendant had any control in the policy of the Government in granting licences nor did he have any control on the legislative power of Government. The change in the policy of the Government for granting licence was made later on. In the same way the business premises which was transferred to defendant No. 1 was on the basis of a legislation which came into force much after the dissolution of the partnership. No blame on that account can therefore be thrown on defendant No. 1. The plaintiff counsel claimed that she being a woman could not be expected to be in full know of the partner ship and deserved special consideration. He contended that in this case the onus should he on Defendant No. 1 to establish that the document in question is a valid one.
24. In support of his contention that the plaintiff being a woman is entitled to special consideration and protection Mr. Khalilur Rahman, counsel appearing for the plaintiff, has relied on some case‑law on the subject. He referred me to the following decisions :-
Poosthurai v. Kanappa Chettiar and others A I R 1920 P C 65.
Chainta Dasya v. Bhalku Das A I R 1930 Cal. 591.
Qamar Ara Begum v. Sultan Begum and others A I R 1930 Oudh 131.
Mst. Anupa Bai wife of Gorelul Kirar v. Bhagwant Singh and others A I R 1938 Nag. 470.
Tungabhai Bhratar Purushottam Shamji Kambhajkav v. Yeshwant Dinkar Jog and another A I R 1945 P C 8.
Ram Kalap Pande v. Bansidhar and another A I R 1947 Oudh 89.
Thangachi Nachial and another v. Ahmed Hussain Malumiar and others A I R 1957 Mad. 194.
Most of the decisions deal with cases in which pardanashin ladies executed some deed or instrument of agreement and have no direct bearing on the facts of this case. But there Ore certain general principles discussed in them which are applicable to cases other than pardanashin ladies. The general principle deduced from them is that in some of these decisions it was held that there are three ingredients in the definition of "undue influence" in section 16 of the Contract Act. Firstly, the relations subsisting between the parties should be such that one of the parties is in a position to dominate the will of the other. Secondly, that the dominate party obtains an unfair advantage over the other and thirdly, that the dominate party uses his dominate position to obtain that unfair advantage. It was further held that although these are the three ingredients constituting undue influence, the party who pleads undue influence has in the first instance to prove only the first and second ingredients. When a person is proved to be in a position to dominate the will of another and the transac tion appears on the face of it or on the evidence adduced, to be unconscionable, the onus of proving the absence of the operation of the third factor lies on the dominant party. It was held in some cases that if an elderly aged person who is found to have divested himself or herself of valuable property for the benefit of someone in close communion with the transferee the Court will protect the interest of such person, where the person concerned, besides being aged is a woman, the need for protection is greater. In cases where the woman is a pardanashin lady and illiterate the need for protection is greatest. Lord Goddard Tungabi Bhrarar Purushotam Shamji Kumbhojkav v. Yeshvent Vinkar Jog and another (AIR l945PC8) extended this principle to a case in which the facts show that the circumstances are such that undue influence can fairly be inferred. In Chainta Dasysa v. Bhalkudas (AIRI920Cal.591) it was observed that there is no reason why a rule which is applicable to the pardanashin ladies should not apply to the case of a poor woman who is equally ignorant and illiterate and is not pardanashin simply because she does not belong to that class.
25. Unfortunately in the present case, the plaintiff has not been able to establish that the relationship that existed between the parties was such that Defendant No. 1 was in a position to dominate the will of the plaintiff or her father. I have already found that the allegation of the plaintiff that Defendant No. 2 was seriously ill at the time when the transaction in question took place cannot be believed. This version is unsupported by any reliable evidence. Besides, under the terms of the partnership deed, defendant No. 2 had to maintain the accounts. In fact he held both financial and managing control in the partnership business. Defendant No. 1 was only an outdoor worker and was looking only to the technical side of the business. It cannot therefore be said that he could dominate the will of the plaintiff or her father. In the same way there is nothing on the record to prove that defendant No. 1 bad obtained any unfair advantage over the plaintiff or defendant No. 2. In fact defendant No. 2 in the plaint of the suit filed by him (Exh. D/1) presented on 8th February 1960. which was withdrawn later on, admitted in para. 2 of the plaint that he and Aisha Bait the plaintiff. had withdrawn from the partnership and Defendant No. 1 had become the sole proprietor of Salika Sewing Machine Company. It is in evidence that after the dissolution deed was effected between the parties, late Mr. Liaquatullah Qureshi, counsel for the plaintiff, notified on behalf of the plaintiff and her father in the issue of Dawn dated the 11th March 1958 about the dissolution of partnership for information of the general public. Exh. D/2 1, D/6 and D/18 are public notices which were published in the issue of Dawn dated the 11th March 1958. Exh. D/21 is the public notice which was published under the instructions of plaintiff and Defendant No. 2 by late Mr. Liaquatullah Qureshi. Similarly, on 10th October 1956, the plaintiff along with her father wrote letter dated 10th October 195'3 (Exh. D/8) to the Income‑tax Department admitting that the dissolution of the partnership business had taken place and informing the department that in future the defendant No. 1 would be responsible for payment of all income‑tax liabilities. As late as in the year 1963 the Income‑tax adviser of the plaintiff and defendant No. 2 wrote two separate letters Exh. Y/3 and Y/4 dated the 4th April 1963, to the Income‑tax Department
informing them that the Income‑tax liabilities of the partnership business were on defendant No. 1 and all arrears should be recovered from him. In the face of such documentary evidence it is difficult to believe that the dissolution deed was the result of any undue influence, coercion and misrepresentation of facts. In my opinion, it was a straightforward deal. The plaintiff along with defendant Nos. 1 and 2 entered into this transaction in the ordinary course. She had the advantage of seeking advice of her own counsel, who filed the present suit. The mere fact that no accounts were examined or stock was checked immediately before the dissolution was effected is not such a circumstance which can lead to we irresistible inference that it was due to any unfair advantage gained by Defendant No. 1. According to the terms of the Dissolution Deed the amount of rupees one lac five thousand was fixed on the basis of mutual offer and bargain. The version of defendant No. 1 that plaintiff and defendant No. 2 offered him its. 25,000 and in return demanded their investment in the business appears to be fully supported by Document Exh. P. W. 1/5, dissolution deed and other independent evidence. I am not in the least impressed by the allegation that defendant No. 1 has been laying a trap for plaintiff and her father or that he took unfair advantage of the illness of her father or gave a gloomy picture of the business. The evidence led by the parties gives a clear impression that both plaintiff and her father are shrewd businessmen and were in full control of the business. They knew their rights in the business and on a former occasion did not hesitate to rush to the Court to protect their interest. In my view the bargain struck between the parties can by no strength of imagination be considered to be an unfair deal. It is therefore not one of those cases in which the plaintiff deserved any special consideration or protection of her interest by reason of being a helpless woman. It seems to rite that the general principles dis cussed earlier has no application to cases in which literate women are found to have full business aptitude and capacity to look after their interest.
25. Mr. Khalilur Rehman further relied on a decision of the English Court of Appeal Law v. Law ((1905)1 Ch. D 140). In that case it was held that in a transaction between co‑partners for the sale by one to the other of a share in the partnership business, there is a duty resting upon the purchaser who knows, and is aware that he knows, mere about the partnership accounts than the vendor, to put the vendor in possession of all material facts with reference to the partnership assets, and not to conceal what he alone knows; and that, unless such information has been furnished, the sale is voidable and may be set aside. Learned counsel further relied on the Commentary of Lindley on Partnership. The learned author at page 516 of the 12th Edition of the book has stated as under :‑
"Notwithstanding the inability of a retiring partner, and of those claiming under him, to avoid an agreement fairly come to between him and his co‑partners, the good faith and open dealing which on‑ partner has a right to expect from another never require to be more scrupulously observed than when one of them is retiring upon terms agreed to upon the strength of representations as to the state of the partnership accounts; and an agreement entered into on a dissolution will be set aside if it can be shown to have been based upon error or to have been of concealment of the truth."
No one can dispute these propositions of lass. But it depends o the fact of each case. The question is whether any such duty rested on Defendant No. 1. As discussed earlier the plaintiff has not been able to bring any facts or circumstances on the record to establish that defendant Usman had any knowledge about the partnership business which was not within the knowledge of the other partners. The defendant No. 2 was incharge of the accounts' and had full knowledge of the business of the firm. Plaintiff is hiss daughter and admittedly is residing with him and looking after him. I have noted her demeanour in the witness box. She is a literate lady and appears to be very clever and knows very much about commercial dealings. In this connection Mr. Ghani referred ma to two documents Exhs. D/1 and D/2 dated .the 29th October 1957, and 11th December 1957 respectively. These two documents show that the plaintiff has been advancing considerable amount to the partnership for releasing the goods which were imported from Japan on condition that the goods were to remain in her custody and could be released only after the payment had been made by the partnership business. The plaintiff was to charge 5 per cent. as commission on these transactions. Under Exh. D/1 she advances Rs. 13,500 on the following condition:
Received Rs. 13,500 (rupees thirteen thousand five hundred only) from Aisha Bai Abdul Karim today. The said sum of money will be invested for releasing the goods which have been arrived from Japan. The goods will remain in the custody of Aisha Bai Abdul Karim and whenever the Company made payment with commission charges at 5 % the delivery of the goods will be given."
On the same terms she advanced Rs. 14,000 under Exh. D/2. Thus it will be noticed that the plaintiff was dealing with the partnership business like any other businessman and her contention that she had no knowledge of the business appears to be without any substance.
27. After carefully considering the evidence of the parties, I am satisfied that the allegation of the plaintiff that defendant No. 1 took advantage of her ignorance of the affairs of the business or of her father's serious illness or created fear in their minds and obtained the deeds of dissolution in such circumstances has no basis whatsoever. In my view the plaintiff and defendant No. 2 were fully aware of the accounts and stock of the business and defendant No. 1 had not in the least gained any unfair advantage under the above‑mentioned deed from them. The grievance of the plaintiff that she had not been paid the accumulated profit or that nothing was paid to them about the goodwill, licence, trade marks, etc. is also without substance. The plaintiff and her father, defendant No. 2 were not ignorant about the condition of the business. It was for them to demand the value of the above‑mentioned benefits attached to the business. They did not choose to do so. It is, therefore, not open to them after, entering into a solemn agree ment, to blame defendant No. 1 for it. Even according to Mr. Khalilur Rehman, plaintiff and defendant No. 2 were entitled to not more than one lac 23 thousand rupees. The fact that they have been paid one lac 10 thousand shows that defendant No. 1 had not gained any unfair advantage over them by exclusively getting the business in dispute.
28. It was next contended by learned counsel for the plain tiff that the plaintiff was not paid any amount out of the one lac 5 thousand‑paid at the time of the dissolution of the deed. The plaintiff received this amount jointly with her father, defendant No. 2. They executed joint receipt in favour of defendant No. 1. It is in evidence that this amount was deposited in the account of defendant No. 2 in Eastern Bank. The plaintiff was therefore, herself responsible for keeping this amount with her father. If she had any grievance against her father in this respect it was open to her to claim her share out of this amount from her father, defendant No. 2. It is, however, impossible for me to believe that her father has also played fraud on her. At the time of the institution of the suit and at the final hearing of the case in this Court the plaintiff was living with her father. The ordinary presumption, therefore, would be that the plaintiff and her father have settled between themselves and her share in the business was paid to her. I find no substance in this argument of the learned counsel for the plaintiff.
29. The evidence produced on behalf of defendant No. 1 leaves no doubt in my mind that he has, after the dissolution, considerably expanded the business of Salika Sewing Machine Co. It is in evidence that he has installed a big factory in S. I. T. E. He has also invested further money in the business. It is further in evidence that be has also taken his son as a partner in the said business. In these circumstances, it would be too hard and most unjust if defendant No. 1 is deprived of his fruits after a lapse of such a long time. It will be noticed that tide dissolution took place in March 1958, and the plaintiff filed the suit on 3rd March 1961, the last date of limitation. I find much force in the contention of Mr. Ghani that in such circumstances even if the grievance of the plaintiff is found to be genuine she cannot be given any relief by this Court. In this connection learned counsel referred me to two English decisions. In United Shoe Machinery Co. of Canada v. Brunet and others (1909 A C 330) the Privy Council in a case for injunction and damages held that, as the respondents had not repudiated the leases after discovery of the alleged false representations, but had continued to work the demised machines and paid the royalties reserved, they had elected to treat the leases as subsisting, and could not afterwards avoid them. In this connection their Lordships observed as under:‑
"A contract into which a person may have been induced to enter by false and fraudulent representation is not void, but merely voidable at the election of the person defrauded, after he has had notice of the fraud. Unless and until he makes his lection, and by word or act repudiates the contract, or expresses his determination not to be bound by it (which is but a form of repudiation), the contract remains as valid and binding as if it had not been tainted with fraud at all : Clough v. London and North Western Ry. Co. (I) approved by Lord Blackburn in Earlanger v. New Sombrero Phosphate Co. (2) and by Lords Watson and Davey in Aaron's Reefs v. Twiss (3). In the first mentioned case Mellor, I. says (4): "The principle is precisely the same as that on which it is held that the landlord may elect to avoid a lease and bring ejectment, when his tenant has committed a forfeiture. If with knowledge of the forfeiture. he, by the receipt of rent or other unequivocal act, shos his intention to treat the lease as subsisting, fee has determined his election for ever, and can no longer avoid the lease."
In Thomas Clarke v. Samuel Auchmuty Dickson, John Williams and Thomas Gibbs (120 E R 463) it was held that a person induced by fraud to enter into a contract under which he pays money may, at his option, rescind the contract and recover back the price, as money bad and received, if he can return what he has received under it: But, when he can no longer place the parties in status quo, as if he has become unable to return what he has received in the same plight as that in which he received it, the right to rescind no longer exists: and his remedy must be by an action for deceit, and not for money had received.
30. Similarly in the Sheffield Nickel and Silver Plating Company, Limited v. Unwin ((1877) Q B D 214) a Company after a lapse of a long time claimed to set aside the resolution and enforce the guarantee, on the ground that the defendant had fraudulently misdescribed the property sold by him. It was held that assuming that the resolution had been passed in consequences of fraudulent mis representations on the part of the defendant, his position had been so far changed that it was too late for the company to repudiate their contract. In the light of the above discussion on this ground also the plaintiff is not entitled to any relief on the facts of the present case, My findings, therefore, on the issue are as under:‑
Issue No. 6.‑In the negative.
Issue No. 7(a) and (b).‑In the negative.
Issue No. 8.‑In the affirmative.
Issue No. 9.‑In the affirmative.
Issue No. 10.‑In the affirmative.
31. In the result, I would hold that the Plaintiff is not entitled to any relief in the suit filed by hiss. I would, therefore, dismiss it with costs.
K. B. A.
Suit dismissed.
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