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First Appeal No. 19 of 1979, decided on 15th March, 1987.

---S.39--Dissolution of partnership--No law prohibits formation of a new partnership after it is dissolved--Plaintiff having admitted that the previous partnership was dissolved in 1968, held, was not debarred from entering into a fresh partnership subsequently.

---Ss.21, 33, 36 & S9--Claim for price of goods sold--Consignment shipped on C.E.F. basis and according to terms of contract, drums for packing goods were to be supplied by the defendants and insurance of consignment was to be arranged by defendants at their own costs- Term in contract postponing payment of balance of 50% price of goods until weighment at the factory of defendants, in circumstances, could not prevent passing of the property in goods to defendant as soon as it was put in a deliverable state on board the ship--Property in the goods having passed on to defendants as soon as goods were put in a deliverable state on board the ship, defendants, held, could not defeat the claim of plaintiff on ground of non-delivery--Preponderance of evidence in the case, even otherwise, proving delivery of goods at factory of defendants--Trial Court, in such circumstances, had rightly held that the non-delivery, if any, being in the special knowledge of defendants who had failed to examine any witness on the point, plaintiff shall be deemed to have discharged the burden placed on him in that regard--Contention of defendants that plaintiff had made out Bill of Lading in their own name which established intention of parties that property in goods would not pass to defendants until actual delivery, 'neither raised in written statement nor in their evidence before Court below--Bill of Lading being in possession of defendants, no prayer made in Court for permission to produce same although appeal was pending for about eight years and in such circumstances defendants' contention could not be accepted.

---Ss.45 & 46--Claim for balance payment of price of goods sold- Respondents in written statement not denying supply of goods but only pleading that there was no balance outstanding against them in respect thereof--Appellant in his evidence on oath reiterating facts stated in plaint but no effort made in cross-examination by defendants to contradict him regarding non-payment of balance--Respondents in their evidence neither alleging nor tendering any proof with regard to payment of balance amount to appellant and by having accepted the fact regarding supply of goods had taken the burden of proving the balance price on them which they failed to discharge--Decree modified accordingly.

---Ss.45 & 61--Civil Procedure Code (V of 1908), S.34--Interest, grant of--Suit for recovery of balance price' of goods supplied by plaintiff to defendants-- Trial Court rejecting grant of interest on sole ground that there was no agreement between parties for payment of interest--Such ground, held, was misconceived as, in such cases, if Court reaches the conclusion that plaintiff was an unpaid seller, he would be entitled to interest on such unpaid price--Suit having been decreed for amount claimed by appellant as an unpaid seller, he was entitled to interest at rate of 9% per annum from date of suit till amount is paid--Decree accordingly.

Iqbal Kazim for Appellant.

Mazharul Jamil for Respondent.

Date of hearing: 15^th March, 1987.

By this order i propose to dispose of the above-noted two first appeals filed under section 96 of the Code of Civil Procedure against the judgment and decree passed by the learned Vth Senior Civil Judge, Karachi, in suit No. 1867/74.

Messrs Pakistan Chemical and Sodium Silicate Industries, who are appellant in First Appeal No. 19 of 1979 and respondent in First Appeal No. 28 of 1979, instituted Suit No. 1867 of 1974 for recovery of a sum of Rs. 30,762.39 against Messrs Lever Brothers (Pak.) Limited, respondent in 1st Appeal No. 19 of 1979 and appellant in 1st Appeal No. 28 of 1979. (I will hereinafter refer the appellant in 1st Appeal No. 19/79 and respondent in 1st Appeal No. 28/79 as "the plaintiff" and respondent in 1st Appeal No. 19/79 and appellant in 1st Appeal No. 28/79 as "the defendant" only for the sake of convenience and to avoid any confusion with regard to the parties). It was alleged in the suit that the plaintiff, against Purchase Order No. 002801 dated 9-8-1971 and 003156 dated 29-9-1971 supplied 200 tons of sodium silicate to the defendant. The above stated total contracted quantity of 200 tons was shipped to defendant in 390 drums as follows:-

100 drums per s.s. 'OHARMAZO' on 28-10-1971; 70 drums per s.s. 'RUSTOM' on 4-11-1971; and 220 drums per s.s. 'AL ABBAS' also on 4-11-1971.

It was also alleged that the shipping documents relating to the aforesaid shipments consisting of bill of lading, invoices and weight certificates from General Superintendence Company (Pak.) Limited were delivered at defendant's office at Karachi and against that the defendant made 50% payment of Rs.26,690.00 through cheque No. 005951 dated 24-11-1971 to plaintiff leaving a balance of Rs.27,311.24. It was also alleged that the plaintiff had made another supply of 100 drums of sodium silicate of the value of Rs. 13,693.15 to defendant as per their bill No. 5589 dated 18-9-1971, but out of that supply the plaintiff received only a sum of Rs. 10,242.00 on 16-9-1971 leaving a balance amount of Rs. 3,415.15. It was accordingly prayed in the suit by the plaintiff that a decree in the sum of Rs. 30, 762.39 with costs and interest at 9 per annum from the date of the suit till the payment be passed against the defendant. The suit was resisted by the defendant, and on the pleadings of the parties the following issues were framed:-

(1) Whether the defendants entered into contracts as alleged

(2) Whether the plaintiffs supplied the goods as alleged

(3) Are the defendants liable in the sum claimed

(4) Whether the suit is not maintainable

(5) Is the suit barred by time

(6) Is the suit barred by section 69 of the partnership Act

(7) Was the contract herein frustrated as alleged

(8) Have the defendants not received report of inspection and weighment from their Chittagong factory If not what is its effect

(9) Whether proper court-fees have not been paid, if not its effect

(10) Whether the Court has no jurisdiction

(11) Whether plaintiffs have no cause of action

(12) What should the decree be

Issues 1 and 2 were found in favour of the plaintiff. On Issue No.3, the learned trial Court decreed the suit of the plaintiff only to the extent of Rs.27,311.24 and rejected the claim with regard to unpaid balance amount of the supplies allegedly made on 18-9-1971, amounting to Rs. 3,415.15. On issues 4 and 5, the suit was held to be competent, while Issue No.6 was also decided in favour of the plaintiff. Issue No.7,8 and 9 were decided against the defendant. On Issue No.10 Court reached the conclusion that it had the jurisdiction and on Issue No.11, it was found that the plaint filed by the plaintiff disclosed the cause of action against the defendant. As a consequence of the above findings the plaintiff's suit was decreed in the sum of Rs. 27,311.24 with costs but the interest was disallowed by the learned Judge. Appeal No. 19/78 is preferred by the plaintiff against the part of decree whereby the claim of plaintiff for the sum of Rs. 3415.15 and interest were disallowed, while appeal No.28 of 1978 is filed by the defendant against the judgment and decree of trial Court, decreeing the suit of plaintiffs against them for Rs. 27, 311.24 with costs.

The learned counsel for the defendant firstly contended that the suit of plaintiff was barred under section 69 of the partnership Act and as such the learned trial Court wrongly decided Issue No.7 in favour of plaintiff. It is also contended by the learned counsel for the defendant that there was no evidence on record to show that the consignments shipped by the appellant actually reached the factory of defendant at Chittagong and delivery was affected as contemplated in the contract and as such the defendant was not liable for the claim in the suit. Alternatively, it is contended by the learned counsel that in terms of the purchase Order the property in the goods was to pass to defendant only upon weighment of goods and approval, thereof by the Chittagong factory of the respondent, and as there was no evidence on record to show that the weighment of goods was made as agreed at the factory of defendant at Chittagong and they accorded their approval of the goods, the defendant could not be held liable for the claim in suit. With regard to claim of plaintiff for Rs. 3,415.15 allegedly due against the supplies made by them in September, 1971. It is contended by the learned counsel that the plaintiff failed to establish the above supplies having been made to the respondent in September, 1971 and in any case the plaintiff failed to establish that in case the supplies were made they were not paid for the same. After hearing the learned counsel for the parties, at length, I am of the view that the plaintiff has succeeded in establishing their claim to the extent of Rs. 30,762.39 and they are entitled to a decree accordingly in the suit with interest at the rate of nine per cent per annum from the date of the filing of suit till the amount is paid.

The main contention of the learned counsel for the defendant before me is that the suit was barred under section 69 of the partnership Act and as such the decree passed by the trial Court in favour of plaintiff is without jurisdiction. The plaintiff in his evidence before the trial Court produced the true copy of certificate of registration of the firm obtained from the Office of Registrar of Firms. Photostat of that document was retained on record as Exh. P.6 with the consent of parties, and the original was returned to the plaintiff. A reading of Exh. P.6 will show that the partners joined the partnership on 1-12-1969, and the partnership was entered in the register of firms on 9-5-1970. The learned counsel for the defendant contends that the appellant in his cross-examination admitted in clear terms that the partnership shown to have been entered into on 9-5-1970 was dissolved in the year 1968 and as such there was no evidence on record to show that there was any existing partnership between the partners on the date of institution of the suit, which was fixed on 8-8-1974. The answer given by the plaintiff's partner Tariq Shahzad in cross-examination, relied by the learned counsel for the defendant, reads as follows:-

"Previous partnership as shown in Exh. 6 was dissolved in 1968."

The inference sought to be drawn by the learned counsel from the above statement of plaintiff's witness that he had admitted in cross -examination that the partnership evidenced by document Exh. P.6 was dissolved in 1968 and as such there was no partnership in existence in 1974 when the suit was filed is fallacious. It is quite clear from the above statement that the partnership which was referred by the witness as dissolved in the year 1968, was a previous partnership and not the partnership which was entered into on 1-12-1969 as shown in Exh. P.6. The partnership evidenced by Exh. P.6 was entered in register of firms on 9-5-1970 and on the same date a copy of the certificate was granted to plaintiff. If the contention of learned counsel for the defendant is accepted then it will mean that what was entered by the Registrar of Firms on 9-5-1970 in the register of firms was an entry in respect of a dissolved firm and not an existing partnership which was never the case of defendant in the cross -examination. The learned counsel for the respondent very strenuously urged that as the partnership was dissolved in the year 1968, it could not have come into existence on 1-12-1969 as shown in Exh. P.6 and accordingly it is contended by the learned counsel that no reliance can be placed on Exh. P.6, which shows the date of the entry of the partnership in the register of firms on 9-5-1970 The contention of the learned counsel is devoid of any substance. There is no law which prohibits formation of a new partnership after it is dissolved. The plaintiff having admitted that the previous partnership, as shown in Exh. P.6, was dissolved in 1968, was not debarred from entering into a fresh partnership on 1-12-1969. The learned counsel for the respondent also contended that the plaintiff admitted in his cross-examination formation of a new partnership in 1975, which was registered on 1-1-1975 as admitted by the witness and as such it is established that before 1-1-1975, there was no registered partnership. This contention of learned counsel is again based on a misconception. The partnership evidenced by Exh. P.6 was between Tariq Shahzad and Shaikh Gulzar Ellahi, while the partnership of 1975 referred by the witness is the one which came into existence after the dissolution of the partnership of 1970, between Tariq Shahzad and his brother Tanveer Gulzar. I, therefore, find no substance in the contention of the learned counsel that there was no existing partnership on the date the suit was instituted by the appellant.

The next contention of the learned counsel for the defendant is that, firstly, there was no delivery of the goods at the Chittagong Factory of defendant as contemplated in the contract between the parties and, secondly, since the property in the goods was to pass to the defendant upon weighment and approval of consignment at the Chittagong Factory of defendant, the defendant was not liable to the claim in the suit unless it was proved by the plaintiff that the weighment was made at Chittagong and approval was accorded by the defendant's Chittagong Factory. None of these contentions has any substance. The plaintiff in his evidence clearly stated that the consignment consisting of 390 drums of silicate was shipped in the lots of 100, 70 and 220 drums, per s.s. "DHARMAZO, RUSTOM and Al-ABBAS" on 28-10-1971, 4-11-1971 and 4-11-1971 respectively. The shipping documents of these 3 lots consisting of bills of lading, invoices, and weighment certificates were handed over to the defendant at the office at Karachi, and they made 50% payment against these bills and balance 50% was to be paid after arrival of the consignment at the defendant's factory at Chittagong. and completion of weighment there. It is not disputed that the consignment was shipped on C & F basis and according to terms of contract the drums for packing of the goods were to be supplied by the defendant and in the event of non-supply of drums the plaintiff was entitled to charge Rs.29 Der drum. The contract between the parties also shows that the insurance of the consignment was to be arranged by the defendant at their own costs. In these circumstances, the term in the contract postponing payment of balance of 50% price of the goods until weighment at Chittagong Factory of defendant could not prevent the passing of the property in the goods to the defendant as soon as it was put in a deliverable state on board the ship. The sole defence taken by the defendant in this regard was that the consignment did not reach their factory at Chittagong and as such they were not liable for the claim in the suit. As the property in the goods in the circumstances of the case passed on to the defendant as soon as the goods were put in a deliverable state on board the ship, the defendant could not defeat the claim of plaintiff on ground of non-delivery. even otherwise, the preponderance of the evidence in the case sufficiently proved delivery of the goods at Chittagong factory of defendant. The plaintiff in his evidence produced letter Exh. P.10 addressed to plaintiff by the defendant's Chittagong Office. The genuineness of this letter was not disputed in cross-examination. The defendant's only witness in cross-examination admitted that M . H . Qadri, who wrote the above letter to plaintiff, was an officer serving in the Chittagong factory of the respondent. In this letter, it is clearly stated that out of the 100 drums shipped per s.s. "Al-Abbas" 30 drums had been rejected by the respondent factory on the ground that silicate contents are high and material is in semi-solid state. It is not disputed that per s.s. "Al-Abbas" 220 drums were shipped to defendant in two lots consisting of 100 and 120 drums respectively. The ship "Al-Abbas" left Karachi port for Chittagong on 4-11-1971, and on the same date another ship s.s. "-Rustam" carrying 70 drums also sailed for Chittagong while s.s. "Dharmazo" carrying 100 drums left Karachi port on 28-10-1971 for Chittagong. There is no mention in the letter Exh. P.10 that the other' lot of the consignment sent per "Al-Abbas" or the other ships "Rustam" and "Dharmazo" carrying 70 and 100 drums which left Karachi for Chittagong on the same date and on an earlier date did not reach defendant's factory at Chittagong. The learned trial Court, in these circumstances, rightly held that the non-delivery, if any, in the case, was in the special knowledge of the respondent and they having failed to examine any witness on this point, the appellant shall be deemed to have discharged the burden placed on them in this regard. The respondent's only witness Ghuncha Gul, General Manager of their Legal Department, in his examination-in-chief clearly stated that he has no knowledge whether the consignment in the suit was received by the factory at Chittagong. In this state of evidence, I am of the view that delivery of consignment to defendant was sufficiently established. Mr. Mazharul Jamil, the learned counsel for the respondent made an attempt to show that the plaintiff had made out the bill of lading in their own name which sufficiently established that the intention of the parties was that the property in the goods shall not pass to the defendant until actual delivery. No such contention was raised by the defendant either in the written statement or in their evidence before the Court below. Even the copy of the bill of lading, which was admittedly in possession of defendant was not tendered in the evidence. No prayer was made even in this Court for permission to produce the Bill of Lading, although the appeal was pending in this Court for about eight years. In these circumstances, the contention raised by Mr. Mazharul Jamil cannot be accepted. Having dealt with the appeal of defendant, I will now consider the appeal of the plaintiff. The part of the claim of plaintiff rejected by the trial Court is pleaded in para. 4 of the plaint as follows:-

"4. The defendants had purchased 100 drums of Sodium Silicate of the value of Rs.13,793.15 per Bill No. 5589, dated 18-9-1971 of the plaintiffs and had paid Rs.10,242.00 on 16-9-1971 in part payment thereof leaving a balance of Rs.3,41 5.15 which is still unpaid."

In reply to the above paragraph, the respondent in their written statement did not deny the supply of the goods but only pleaded that there was no balance outstanding against them in respect of that supply. The plaintiff in his evidence before the Court on oath once again reiterated the facts stated in para. 4 of the plaint, but no effort was made in the cross-examination to contradict him regarding non-payment of balance. The defendant in his own evidence also did not allege or tender any proof with regard to payment of the balance amount of Rs.3,415.15 to the appellant in respect of the supplies made in September, 1971. The defendant having accepted the fact regarding supply of goods under Bill No. 5589 dated 18-9-1971, had taken the burden of proving the balance price on them which they failed to discharge. I accordingly, while dismissing the appeal of the respondent (1st Appeal No. 28/79), allow the appeal of the appellant (1st Appeal No. 19/79) and modify the decree to the extent that the suit of the appellant shall stand decreed in the sum of Rs. 30,752.39. The learned trial Court rejected the grant of interest to the appellant on the sole ground that there was no agreement between the parties for payment of interest. The ground, on which the interest was rejected, is misconceived. It was the case for recovery of the balance price of the goods supplied by the plaintiff to the defendant and, in such cases, if the Court reaches the conclusion that the appellant was an unpaid seller he will also be entitled to the interest on such unpaid price. As the suit is decreed for the amount claimed by the appellant as an unpaid seller, he is entitled to the interest at the rate of Rs.9.00 per cent per annum from the date of the suit till the amount is paid. Decree to follow accordingly.

S.Q. /P-21/K Decree modified.

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