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High Court Appeal No. 62 and Civil Miscellaneous Application No. 478 of 1986, decided on 12th July, 1986.

‑‑Ss. 96 & 151 & O XL, R. 1 & O. XLI, R. 5‑‑Partnership Act (IX of 1932), S. 44‑‑Dissolution of partnership‑‑Suit for dissolution of partnership dismissed by Court on ground that the partnership did not exist at time of filing of suit as same stood already dissolved by virtue of bifurcation arrangement agreed to and put in writing by parties‑‑Property of partnership, during pendency of suit, placed under receivership 'by order of Court‑‑Appeal against appointment of receiver disposed of by a consent order whereby, appointment of receiver was maintained without prejudice to the respective contentions of the parties with some modification which was not acceptable to appellants‑‑Facts and circumstances taken into consideration in putting property under receivership still obtaining‑‑Appeal being against dismissal of appeal, no order for staying operation of impugned judgment and decree, held, was called for‑‑Disputed property of partnership, ordered to remain under receivership of the Nazir of the Court during pendency of appeal on terms and conditions reflected in earlier appellate order.

Khalid M. Ishaq for Appellant.

A.A. Fazeel alongwith A . Rauf for Respondent No. l .

Nemo for Respondent No.2.

‑‑The appellant and the respondents are brothers inter se. All the three are doctors by profession. The appellant Dr. Khalid Kamal Khan filed suit No.2/B on original civil side of this Court against the respondents Dr. Arshad Kamal and Dr. Hamid Kamal for dissolution of partnership and account, stating that they had established a Medical Centre in the name and style of "Ara Medical Centre" at Nazimabad, Karachi a partnership at will under a partnership deed executed in December, 1978. He alleged that the partnership did not last long due to differences between the respondents No.l and 2 and alternate arrangement of bifurcation of the project into "Ara Medical Centre" and Ara Diagnostic Centre", mutually adopted on 16‑1‑1980, also did not get ahead and ultimately the partnership was dissolved with effect from 4‑1‑1981 by virtue of a notice of dissolution of partnership served by him on the respondent No.1 (Dr. Arshad Kamal Khan). He also sought reliefs of appointment of a receiver to take over the management, and order of Injunction againt interference with the affairs of the Medical Centre. The respondent No.l, Dr. Arshad Kamal Khan, resisted the suit, denying the formation of partnership. He alleged that the partnership deed was a fraudulent document. However, the bifurcation of the principal project "Ara Medical Centre" was not denied. He claimed that he was running the Ara Medical Centre of his own and he was not liable to render any accounts. The respondent No.2 tore the line adopted by the appellant /Plaintiff. The suit proceeded for determination of following issues:‑----

"(1) Whether the partnership deed as mentioned in paragraph 3 of the plaint is a genuine and bona fide document or the same was procured by the plaintiff by misrepresentation and fraud

(2) Whether the above partnership was ever acted upon by the parties

(3) To whom the movable properties belong.

(4) Whether the Ara Medical Centre was established by defendant No.l and he procured all business for the Centre, and its effect.

(5) To what relief, if any, the plaintiff is entitled to "

The parties adduced oral as well as documentary evidence. A learned Single Judge of this Court dismissed the suit with no order as to costs, holding that the parties had voluntarily executed the partnership deed Exh.7/1 and the partnership had subsisted upto 16‑1‑1980, when it was replaced by a fresh arrangement incorporated in a bifurcation deed (Exh.7/3) and no partnership existed at the time the suit was filed. This High Court appeal is directed against the aforesaid judgment and decree passed on 17th March, 1986.

Alongwith the Memo of Appeal, an application under Order XLI, Rule 5, r/w Order XL, Rule 1 and section 151, C.P.C. (C.M.A. 478/87) has been filed for suspending operation of the impugned judgment and decree and appointing the appellant as the receiver of the property involved in the partnership. This order pertains thereto.

The learned counsel for the appellant has urged that creation of partnership stands established by the implied admission by the respondent No.l that the partnership deed was signed by him and confirmation by him of the execution of the bifurcation deed. He has further urged that the building where the Medical Centres were functioning belongs to the appellant's wife and the entire equipment belongs to the appellant as mentioned in the partnership deed and the respondents were only working partners. According to him, the bifurcation agreement did not dissolve the partnership but it was a working arrangement amongst the partners. He has contended that the stand taken by the respondent No.l calls for appointment of a receiver to take over the management of the property as to safeguard the interests of the appellant. On the other hand, the learned counsel for the respondent No.l has opposed the application contending that the project was established by the father of the parties and building was purchased by him (i.e. father) benami in the name of wife of the appellant and he has filed a suit for declaration to that effect. He has further contended that stipulated partnership was never acted upon and, whatever it was, it stood frustrated by the bifurcation agreement. He has also contended that the appellants suit for dissolution of partnership and accounts has been dismissed under the impugned judgment and decree and no case is made out for suspending their operation or even for appointment of a receiver to take over the property.

The appellant has filed the suit for dissolution of partnership firm in the name of Ara Medical Centre and accounts there of etc. The learned Single Judge has held that the parties had voluntarily executed the partnership deed (Exh.7/1) and the partnership worked upto 16‑12‑1980, and thereafter it was replaced by the arrangement for bifurcation reflected in a deed Exh.7/3. The suit has been dismissed on the ground that the partnership in the name and style of Ara Medical Centre did not exist at the time the suit was filed. No findings were recorded on the issues as to whom the building and other assets belong and whether the respondent No.l had himself established the Ara Medical Centre and he had procured business therefor. The citations in the partnership deed (Exh.7/1) are to the effect that the appellant was designated as the Senior partner and the respondents as the Junior partners. It is mentioned therein that the senior partner had contributed the X‑Ray plant, full laboratory, full surgical equipment and medical equipment, full operation theatre and all accessories, fully equipped machine and the medical and surgical instruments, the entire building with fittings, and fixtures etc. housing the hospital. It is further stated in the partnership deed that all the apparatus and the building would exclusively belong to the Senior Partner (i.e. the appellant) and they shall be at the disposal of the partnership firm so long as the partnership subsisted and all the properties, movable as well as immovable, shall revert to the Senior Partner (viz. the appellant) on the dissolution of the firm. In the partnership deed, share of the Senior partner (the appellant) is shown 75 paisas and that of each of the junior partners (i.e. the respondents No. 1 and 2) is mentioned as 12.50 paisas. The role of running the Centre is assigned to the respondents No. 1 and 2. The partnership deed was executed in December, 1978 and the partnership was to commence from 18th January 1979. Another deed styled as the "Bifurcation of Ara Medical and Diagnostic Centre Agreement" was executed by the Partners on 16th January, 1980, whereby the Ara Medical Centre was bifurcated into two centres, one of them known as "Ara Medical Centre" and another as "Ara Diagnostic Centre". The appellant was to be chairman of each of the Centres.

The respondent No. l Mr. Arshad Kamal was designated as the Managing Director of Ara Medical Centre, and the respondent No.2 (Dr. Hamid Kamal Khan) was to be the Managing Director of Ara Diagnostic Centre. Two more persons were associated with the executive board of each of the organisations. Mrs. Yousuf Ara Begum was associated as the Director of Ara Medical Centre, and Mrs. Saeeda Khalid Kamal Khan as the Director of Ara Diagnostic Centre. Mr. M.A.R. Khalid was made Secretary of each of the Centres. Both the Centres were made autonbmous organisation on terms and conditions specified in the deed. Each centre was assigned separate accommodation in the same building. Subsidiary Departments of each centre were specified. It is alleged that the new set up also did not achieve homogeneity and the appellant served the respondent No.l notice dated 4‑1‑1981 of dissolution of partnership. The respondent No.2 welcomed the proposal, while the respondent No.l resented it. Hence the suit was filed for dissolution of partnership and accounts. The learned Single Judge has upheld the appellant's case as regards establishment of partnership under the partnership deed (Exh.7/1) and its bifurcation vide agreement (Exh.7/3) referred to above. By virtue of the partnership deed, the entire property viz. building, machinery and other equipment and apparatus were to revert to the appellant on dissolution of the partnership. The partnership stands dissolved for one reason or another. The suit has been dismissed on the ground that the partnership already stood dissolved by virtue of bifurcation arrangement agreed to and put in writing on 16‑1‑1980. This issue would be examined at the hearing of appeal. However, the property which, according to the partnership deed belongs to the appellant, needs to be preserved till the decision of appeal, as it is very likely to be wasted if left to remain with the respondent No.l who has set up adverse claim thereon. During the pendency of the suit also the property was placed under receivership of Nazir of this Court by order of the learned Single Judge dated 1‑3‑1981 on the facts and the circumstances briefly stated above. Of course, the order of appointment of receiver was appealed against in HCA No.25/81. The appeal was disposed of by a consented order dated 21‑5‑1981, whereby the appointment of receiver was maintained without prejudice to the respective contentions of the parties with the modification that the respondent No.l was allowed to use only one room he had been occupying to do his practice at the time the receiver took over possession of the property. It was suggested during the hearing of the application that the respondent No.l would deposit half of the income accruing from Ara Medical Centre if permitted to run it. This proposal was not acceptable to the appellants side. The facts and circumstances taken into consideration in putting the property under receivership are obtaining even now. Of course, no order for staying operation of the impugned judgment and decree is called for as the appeal is against dismissal of the suit. We would, therefore, order that Ara Medical Centre shall remain under receivership of the Nazir of this Court during the pendency of appeal on the terms and conditions reflected in the order dated 21‑5‑1981 passed in H.C.A. No. 25/81, which the parties have abided by since then. The appellant shall make, within a week, initial deposit of Rs.5,000 towards fees of the Nazir/receiver.

S.,Q. / K‑22/ K Order accordingly

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