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Civil Appeal No. 230 of 1969, decided on 20th April 1970.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 13th June 1968, in R. S. A. No. 563 of 1966).

------S. 16(b)‑Attracting provisions of section‑Not necessary to establish rival business as having been set up with income or profits of parties' partnership firm‑[Obiter].

Ch. Muhammad Anwar Buttar, Advocate Supreme Court instructed by Iqbal Ahmad Qureshi, Advocate‑on‑Record (absent) for Appellants.

Kh. Muhammad Tufail, Advocate Supreme Court instructed by Syed Wajid Hussain, Senior Attorney for Respondent.

Date of hearing : 20th April 1970.

‑This appeal by special leave is from the judgment of a learned Single Judge of the High Court of West Pakistan, Lahore, in a Regular Second Appeal, upholding the preliminary decree passed in a suit for dissolution of partnership and rendition of accounts.

Abdul Aziz (the respondent herein) and Abdur Rahim, the appellant No. 1 are brothers. Abdul Aziz instituted a suit against Abdur Rahim for dissolution of their partnership firm called London Picture House', which was doing business in picture framing and frame manufacturing at 11, Nila Gumbad Road, Lahore. In the suit, a relief for rendition of accounts was also claimed. It was alleged that the partnership was duly registered with the Registrar of Firms.

Abdur Rahim as the defendant No. 1 contested the suit denying the alleged partnership and contended that both he and the plaintiff carried on business under the same name, namely, "London Picture House', but the business of each was separate and independent. His precise plea was that the plaintiff carried on the business of picture framing and frame manufacturing, but he himself was an importer of, and dealer in, sheet and plate glass. The defendant further contended that the plaintiff, out of the profits of his above business, set up a rival business under the name and style of Paris Picture House' and that, in the event of the success of the suit, this rival business should also be brought into hotchpot for the purpose of rendition of accounts.

The trial Court held that the "London Picture House" was a registered partnership firm of the two brothers Abdul Aziz and Abdur Rahim and rejected the pleas taken by the defendant. Accordingly, that Court dissolved the said partnership and passed a preliminary decree for rendition of accounts.

The defendant appealed against the trial Court's decree, but it was dismissed. The defendant's Regular Second Appeal was also dismissed by a learned Single Judge of the High Court.

Leave was granted in this case to consider if the plaintiff is under an obligation under section 16(b) of the Partnership Act, 1932 to render accounts for the profits of the rival business carried under the name and style of Paris Picture House. In granting leave, the consideration weighed with this Court was that the learned Single Judge erred in taking the view that section 16(b) of the Partnership Act was not attracted in this case as the defendant failed to establish that any funds of the partnership firm London Picture House' were invested in the other firm Paris Picture House.

Section 16(b) of the Partnership Act runs thus :‑

"Subject to contract between the partners,‑

(a) . . . . . ....

(b) if a partner carries on any business of the same nature as and competing with that of the firm, he shall account for and pay to the firm all profits made by him in that business."

It is plainly clear from section 16(b) that in order to attract its operation, it is not necessary to prove that the rival business has been set up with the income or profits of the parties' partnership firm But this legal position, in the facts of the present case, is of no consequence. It appears that the trial Court framed a number of issues in the suit of which issues Nos. 10 and it related to the business firm Paris Picture House', and these were as follows :‑

"(10) Whether the plaintiff is the real owner arid Beneficiary of the rival business of photo and picture‑framing and frame manufacturing started by him in the adjoining shop under the name of Paris Picture House

(11) I issue No. 10 is proved whether the plaintiff is not liable to account for the profits, made by him from such rival business "

On the basis of the evidence led with respect to these issues, the trial Court arrived at .a definite finding that the plaintiff has no interest in the "Paris Picture House" and that the same was started with the money supplied by the plaintiff's son Muhammad Sharif who is an employee in WAPDA and that the Paris Picture House' does belong to the plaintiff's two sons Muhammad Sharif and Muhammad Ayub. This finding (if fact was armed on appeal. In view of the concurrent finding that the plaintiff has no concern with the Paris Picture House' and that it belongs to his sons, the question of application of section 16(b). of the Partnership Act does not arise at all.

Mr. M. Anwar Buttar, learned counsel for the appellant submits that the lower appellate Court was wrong in saying that there was no evidence worth the name to show . that the Paris Picture House' was set up by the plaintiff. Learned counsel pointed out that the evidence of D. Ws. 24 and 27 is there to show that the finding with regard to issues Nos. 10 and 11 is not correct. We have been taken through the evidence of D. Ws. 24 and 27, but we do not find anything in their evidence for which it can be said that the finding with regard to the Paris Picture House' is in any way wrong. When the Paris Picture House' has been found as a fact to be a concern belonging to third persons, section 16(b) is wholly inapplicable.

No other point arises in this appeal for consideration. In the result, we dismiss the appeal with half costs.

Appeal dismissed.

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