IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: MR. JUSTICE MIAN SAQIB NISAR 
 
 
MR. JUSTICE SH. AZMAT SAEED 
 
 
MR. JUSTICE MANZOOR AHMAD MALIK 
 
 
CIVIL APPEAL NO.363-L OF 2015 
(Against the judgment dated 13.9.2011 of the 
Lahore High Court, Lahore passed in RFA 
No.279/2009) 
 
 
Ch. Nazir Ahmed 
 
…Appellant(s) 
VERSUS 
Ali Ahmed and another 
 
…Respondent(s) 
 
For the Appellant(s): 
Mr. Muhammad Farooq Qureshi Chishti, ASC 
 
 
For the Respondent(s): 
Mr. Alamgir, ASC 
Mr. Mehmood-ul-Islam, AOR 
 
 
On Court’s call: 
Ms. Ayesha Hamid, Advocate 
Amicus Curiae (with the permission of the Court) 
 
 
Date of Hearing: 
04.12.2015 
… 
JUDGMENT 
 
 
MIAN SAQIB NISAR, J.- Vide order dated 27.11.2015 leave in 
the matter was granted to consider:- 
(i) 
whether a suit for dissolution and rendition of accounts of a 
partnership firm, which is not registered would be barred in terms 
of section 69 of the Partnership Act, 1932 and that the plaint 
should be rejected on that account under Order VII Rule 11 CPC 
and/or  
(ii) 
if the suit is not for dissolution of partnership or rendition of 
accounts of an unregistered firm whether such suit is barred by 
law and thus the plaint could be rejected. 
 
2. 
 
This appeal arises from the following facts:- that the appellant 
filed a suit for declaration that respondent No.1 be bound to act as per the 
partnership deed, specific performance (of the partnership deed), rendition of 
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accounts, 
cancellation 
of 
document 
(Waqaf-ul-Aulad) 
and 
permanent 
injunction (hereinafter the “suit”) on the basis of an unregistered partnership 
deed dated 22.02.1986 executed by and between the appellant and the 
respondent no.1 (real brothers) for the purpose of establishing and running a 
school. Upon the refusal of the respondent no.1 to pay profits after 2006 
and upon learning that the school property of the partnership had been 
transferred by the respondent no.1 to the respondent no.2 (his real son) 
through a Waqaf-ul-Aulad in 2004, the appellant was constrained to file the 
suit. Vide order dated 28.04.2009 the Civil Court at Lahore accepted the 
respondents’ application under Order VII, Rule 11 CPC and rejected the 
plaint on the basis that the suit is barred under section 69 of the 
Partnership Act, 1932 (the Act) as the noted firm is not registered with the 
concerned authority. This order has been upheld by the learned High Court 
through the impugned judgment dated 13.09.2011 when challenged by the 
appellant in RFA 279/2009. 
3. 
 
The learned counsel for the appellant argued that the 
impugned judgments are against the law and facts. He submitted that the 
firm did not exist at the time of institution of the suit and therefore the 
appellant could sue for rendition of accounts under sub-section (3) of 
section 69 of the Act. He stated that the bar of section 69 ibid was not 
attracted. Whereas, the learned counsel for the respondents supported the 
impugned judgments. He argued that the bar of section 69 was absolute 
and the same was attracted to the suit. He submitted that the partnership 
deed was for a period of 30 years and this time period was set to expire in 
February 2016 at which time the plaintiff would be free to file a suit for 
accounts but that such a suit for accounts was barred till such time as the 
partnership was not dissolved. The appellant, rather than seeking 
dissolution had contrarily sought specific performance of the partnership. 
He relied on The Australasia Bank Ltd. Vs. Messrs A. Ismail Ji & Sons 
Civil Appeal No.363-L/2015 
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and others (PLD 1952 Lah 314), Lakhani Textile International through 
Partner Vs. Messrs Southern Agencies (Pvt.) Ltd. (2008 CLC 444), 
Province of Sindh through Secretary, Public Work Department, 
Government of Sindh, Karachi and 6 others Vs. M/s Royal Contractors 
(1996 CLC 1205), Syed Nazir Hussain Vs. Ahtisham Muhammad Ali and 
2 others (1989 MLD 88) and Abdul Rehman Vs. Parvez Ahmed Butt and 
2 others (1983 CLC 1740). 
4. 
 
The amicus curiae submitted that the bar contained in Section 
69(1) and (2) of the Act is absolute and during the subsistence of the 
partnership (which is not dissolved), no suit of the nature mentioned therein can 
be filed, however from the language of sub-section (3)(a), three (3) 
exceptions have been drawn where the disability under this section will not 
operate i.e.:- 
(a) 
the enforcement of any right to sue for the dissolution 
of a firm; 
 
(b)  
for accounts of a dissolved firm; and 
(c)  
any right or power to realize the property of a dissolved firm. 
 
These exceptions are carved out to meet such types of exigencies 
where a partner of an unregistered firm files certain proceedings for 
enforcement of any right to sue for the dissolution of the firm or any 
proceedings to seek accounts or realize the property of a dissolved firm. She  
in the above context has relied on Usman vs. Haji Omer (PLD 1966 SC 
328), Kantilal Jethalal Gandhi Vs. Ghanshyam Ratilal Vyas (AIR 1994 
Guj 56), Mahan Traders Vs
Civil Appeal No.363-L/2015 
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309 (Del)] and Prem Lata and another Vs. Ishar Dass Chaman Lal and 
others (AIR 1995 SC 714). Furthermore in order to highlight the true 
import, she has elucidated the scope and object of Section 69 ibid (which as 
pleaded by her shall reflect in the succeeding part of this opinion). However she submitted 
that as many as five (5) reliefs have been sought by the appellant in the suit 
and the Court(s) has to determine the nature of the suit, in pith and 
substance and if the bar of section 69 is attracted to one or more of such 
claim/relief the Court may apply the rule of severance and save the plaint 
from rejection to the extent of that relief qua which the bar is not attracted. 
This according to her can be done by implying the dissolution of the firm. 
5. 
 
Heard. Section 69 of the Partnership Act is as under:- 
“69. Effect of non-registration: 
(1)  
No suit to enforce a right arising from a contract or 
conferred by this Act shall be instituted in any Court by 
or on behalf of any person suing as a partner in a firm 
against the firm or any person alleged to be or to have 
been a partner in the firm unless the firm is registered 
and the person suing is or has been shown in the 
Register of Firms as a partner in the firm. 
(2)  
No suit to enforce a right arising from a contract shall 
be instituted in any Court by or on behalf of a firm 
against any third party unless the firm is registered and 
the persons suing are or have been shown in the 
Register of Firms as partners in the firm. 
(3)  
The provisions of sub-sections (1) and (2) shall apply 
also to a claim of set-off or other proceeding to enforce 
a right arising from a contract, but shall not affect- 
(a)  
the enforcement of any right to sue for the 
dissolution of a firm or for accounts of a 
dissolved firm, or any right or power to release 
the property of a dissolved firm, or 
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(b)  
the powers of an official assignee, receiver or 
Court under the insolvency Federal Territory of 
Karachi 
Act, 
1909], 
or 
the 
Provincial 
Insolvency Act, 1920, to realise the property of 
an insolvent partner. 
 
(4) 
This section shall not apply – 
(a) 
to firms or to partners in firms which have no 
place of business in Pakistan, or whose places 
of business in Pakistan are situated in areas to 
which, by notification under section 56, this 
Chapter does not apply, or 
(b)  
IX of 1887: to any suit or claim of set-off not 
exceeding one hundred rupees in value which, is 
not of a kind specified in the Second Schedule to 
the Provincial Small Cause Courts Act, 1887, or 
to any proceeding in execution or other 
proceeding incidental to or arising from any 
such suit or claim.”  
[emphasis supplied] 
 
 
From the unambiguous language of the section the intent and purpose of 
the legislature is loud and clear, that is to make the adverse effects of non-
registration so broad-based and comprehensive so as to make the 
provisions virtually compulsive. This seems to have been mandated with an 
unmistaken object to exert pressure which is to be brought to bear on the 
partners to have the firm and themselves registered. The section provides 
for the effect of non-registration of firms, in that sub-section (1) relates to 
suits by partners against firms or the partners and sub-section (2) relates 
to suits by firms against third person, as fatal, while sub-sections (3) and 
(4) lay down exceptions to the (lethal) effects of the non-registration of 
firms[1]. On account of the penal consequences provided by sub-sections (1) 
                                       
[1] Partnership Law by P. N. Chada 
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and (2) of Section 69 there cannot be two opinions that the registration of 
the firm, though has been left optional for the partners and that the facility 
of registration has been provided without compulsion (see Section 58 of the Act), 
for the purposes of suits falling within its purview the provisions of Section 
69 are absolutely mandatory[2]. In this regard the outline of the provisions 
may be broadly captured as below: 
(i) 
A partner of an unregistered firm cannot sue the firm or any of 
its partners, past or present, for enforcing a right conferred by 
the Act or arising out of the contract of partnership. 
 
(ii) 
An unregistered firm cannot file a suit against any third person 
for enforcing a right arising out of a contract. 
 
(iii) 
The above two disabilities also apply to a claim of set off or any 
other proceeding to enforce a right arising out of contract. But 
they do not apply to – 
 
(a) 
the right to sue for dissolution or for accounts of a 
dissolved firm, or to realize the property of a dissolved 
firm; or  
(b) 
the power to realize the property of an insolvent partner. 
 
(iv) 
The section does not affect, – 
(a) 
firms located in areas to which the Act does not extend or 
which are exempt from the operation of the Act; 
(b) 
proceeding, etc. not exceeding Rs.100 in value. 
 
In other words sub-sections (1) and (2) of Section 69 place a complete bar 
on every proceeding initiated vide a suit by an unregistered firm and its 
partners. However, as expressly provided by sub-sections (3) and (4), the 
aforesaid rules causing disabilities are not applicable to, and registration of 
a firm is not necessary in, the following cases:- 
                                       
[2] Law of Partnership by Avtar Singh 
Civil Appeal No.363-L/2015 
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(1) 
where the suit is for the dissolution of a firm; 
(2) 
where the suit is for rendition of accounts of a dissolved firm; 
(3) 
where the suit is for realization of the property of a dissolved 
firm. 
6.  
 
In view of the above, it may be pointed out (reiterated) that 
though the Act places no prohibition upon an unregistered partnership 
making contracts either inter se the partners or with some third party, nor 
forbids an unregistered partnership acquiring property or assets, all 
Section 69 does is to make a suit instituted by an unregistered partnership 
to recover property or enforce rights, unenforceable and precluded. This 
undoubtedly is a penal provision, therefore on this account it must be 
construed strictly. In other words the registration of a firm is a condition 
precedent and sine qua non to the right to institute a suit by or on behalf of 
the firm or its partner(s) as the case may be and any suit instituted against 
the mandate of law shall be barred, with the obvious consequences of 
rejection of the plaint by the Court as per Order VII Rule 11(c), CPC which 
provides “where the suit appears from the statement in the plaint to be barred by any 
law”. The purpose of section 69 would appear to be that in the event of a 
dispute the aggrieved party should be able to easily identify the name and 
details of persons who would eventually be liable for discharging the 
obligations of the firm and enforcing their rights against the firm and its 
partners, because unlike a company, a partnership firm is not a distinct 
legal entity and its partners remain personally liable for all the liabilities 
and debts of the firm subject to their inter se contract and proportions 
under thereto. Sub-section (2) of Section 69 in particular seems to have 
been enacted in the interest of strangers dealing with the partners 
representing a firm to ensure the responsibility of the firm and the 
respective partner(s) and in this context and for that purpose the 
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registration of the firm has been made compulsory (note:- only for the legal 
proceedings) but it is further required that the persons suing on behalf of the 
firm should be shown in the “Register of the Firms” as partners in the firm. 
This section as mentioned above is mandatory in character and its effect is 
to render a suit by a plaintiff (the firm or partners) barred in respect of a right 
available to it/him under the contract(s) or the law. 
 
Our above view is fortified by the law already laid down in a judgment 
of this Court reported as Usman vs. Haji Omer (PLD 1966 SC 328), 
wherein it has been held:- 
“……….Non-registration of the firm under section 69 of 
the Partnership Act does not affect the validity of the 
partnership or prevent any of the partners from suing for 
the dissolution of the firm or for accounts or the realization 
of the property of a dissolved firm. This section only bars a 
suit for enforcing a right arising out of a contract against 
either the firm or any past or present member of it or 
against any third party.……….” 
 
We also find force in the judgment reported as The Australasia Bank Ltd. 
Vs. Messrs A. Ismail Ji & Sons and others (PLD 1952 Lah 314) holding: 
 
“……….It has been consistently held that subsection (2) of 
section 69 of the Partnership Act, is mandatory and makes a 
suit instituted by an unregistered firm entirely invalid and 
that subsequent registration of the firm is of no 
avail……….Courts are not makers but only interpreters of 
law and cannot water down the effect of a provision of a 
statute, because the interpretation based on well established 
principles is likely to work hardship in some cases falling 
within the plain meaning of that provision……….The 
language of subsection (2) of section 69 leaves no room for 
doubt that if a suit falling within subsection (2) of section 69 
of the Partnership Act is instituted by a firm which is not 
registered at the time of the institution of the suit, the plaint 
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must be rejected and the subsequent registration of the firm 
cannot validate the proceedings which were invalid in their 
inception”. 
 
 
To the same effect are some other judgments from foreign 
jurisdictions cited by the learned amicus (note:- Section 69 of Indian Partnership Act is 
pari materia to our provision) and we feel inclined to quote a portion from Prem 
Lata vs. Ishar Das Chaman Lal (AIR 1995 SC 714) which reads as: 
“……………Sub-section (3)(a) carves out three exceptions 
to sub-sections (1) and (2) of section 69 and also to the 
main part of sub-section (3) of section 69, namely, (1) the 
enforcement of any right to sue for the dissolution of firm; 
(2) for accounts of the dissolved firm; and (3) any right or 
power to realise the property of the dissolved firm. Having 
excluded from the embargo created by the main part of 
sub-section (3) or sub-section (1) and (2) of S.69, the right 
to sue would not again to be construed to engulf the 
exceptions carved out by sub-section (3) or sub-section (4) 
of S.69 of the Act. Any construction otherwise would render 
the exceptions, legislature advisedly has carved out in sub-
sections (3) and (4) of S.69, otiose. The object appears to 
be that the partnership having been dissolved or has come 
to a terminus, the rights of the parties are to be worked out 
in terms of the contract of the partnership entered by and 
between the partners and the rights engrafted therein. The 
exceptions carved out by sub-section (3) are to enforce 
those rights including the rights to dissolution of the 
partnership despite the fact that the partnership firm was 
an unregistered one……….”  
 
7. 
 
Be that as it may, having laid down the law that section 69 ibid 
is mandatory and penal in nature, the bar to the suit(s) falling within the 
ambit thereof is absolute and unequivocal and that the three (3) exceptions 
are prescribed to such absolute rule (bar); we may mention that these 
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exceptions, are akin to a proviso to a provision, thus per the law meant for 
the purposes of interpretation thereof the exceptions should be strictly 
construed and applied. However, before examining whether the statement 
of plaint in the present case is hit by the said bar (section 69), or qualifies the 
test of exceptions, it must be prescribed that the partners of a firm, 
whether registered or not, stand in a fiduciary relationship to each other 
and Section 9 of the Act imposes a statutory duty upon them “to render true 
accounts”. Section 12(d) of the Act provides “every partner has a right to have 
access and to inspect and copy any of the books of the firm”. In terms of section 18 of 
the Act a partner is an agent of the firm. Further, in terms of section 46 of 
the Act, on dissolution of a firm every partner is entitled to have the firm’s 
property applied towards payment of debts and to have the surplus 
distributed. These noted provisions are sufficient to establish the rights 
which a partner(s) possesses and the duties which the other owes (vice versa) 
especially for seeking and rendering the accounts of the firm. It may also be 
mentioned that regardless of the above the relationship between partners is 
fiduciary in nature making them liable to provide accounts to each other, in 
the same manner as a bank is obliged to render true and faithful accounts 
to its customer for the amounts deposited by the latter with the bank, or for 
the financial facilities availed by the borrower (customer) and the amounts 
which are repaid by him for the discharge of his obligation towards the 
bank for the repayment of the debt/financial facility and/or seeking 
justification(s) for any questionable, unjustified or unauthorized claim or 
entry made/reflected in the statement of accounts and/or accounts/ledger 
books maintained by the bank/financial institution. 
8. 
 
A suit for accounts shall thus be competent by the partner(s) 
against the other, however with the clear limitation and qualifier that the 
firm should have already been dissolved and if not so, be first sought to be 
dissolved, because an exclusive and simple suit for the rendition of 
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accounts while the partnership/firm is in existence shall not be competent 
in view of the absolute bar contained in section 69 ibid. As shall be 
explained in the succeeding part of this opinion, such suit (rendition of accounts 
simpliciter) on the principle of strict interpretation and application of the 
exceptions shall not fall within the stringent connotation of any one of the 
three exceptions mentioned above. 
9. 
 
Be that as it may, before proceeding to examine if the instant 
case on the basis of its own facts falls within the exceptions, it seems 
relevant to mention here, that there are basically three means (mediums) as to 
how a firm (even unregistered) stands dissolved, first if it was constituted and 
meant for a specific purpose which is accordingly achieved/accomplished 
and that was so mentioned in the partnership instrument, or the purpose 
is frustrated, secondly if it was for a fixed period of time upon the expiry of 
such period and lastly if not covered by the above two aspects and 
eventualities it was a “partnership at will” (see Section 7 of the Act) and was so 
dissolved. 
10. 
 
Attending now to the aspect as to whether the present case 
qualifies the strict test of the exceptions laid down above, we have 
examined the pith and substance of the appellant’s suit (whether it falls within 
the three exceptions highlighted above) and for this purpose, at the cost of repetition, 
are resorting to the exceptions contemplated by sub-section (3)(a) of Section 
69 of the Act one by one. The interpretation of the first exception, “the 
enforcement of any right to sue for the dissolution of a firm”, seems quite simple in 
that where the firm has not been dissolved prior to the institution of the 
suit as per any of the three noted modes, the partner(s) may sue for the 
dissolution of the firm simpliciter and may not ask for any other relief such 
as the rendition of accounts, but it does not mean that the relief of 
rendition etc. as ancillary, incidental or consequential relief flowing on 
account of dissolution cannot be sought for. Therefore a composite suit in 
Civil Appeal No.363-L/2015 
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this behalf can always be filed. But where the accounts are being sought for 
an existing firm which is not yet dissolved the suit shall be barred because 
of the clear expression of the statute i.e. “for accounts of a dissolved firm” which 
is preceded by the word OR meaning that the words “dissolved firm” can 
neither be held to be superfluous, redundant nor can be read down or 
watered down or ignored or expunged to stultify the effect thereof; rather 
the expression (dissolved firm) has to be given its due meaning, which 
obviously is that the firm for which the accounts are being sought must be 
one which is “dissolved”. Thus, the condition precedent for seeking the 
accounts of the firm is the dissolution of the firm itself prior to the 
institution of the suit. If however the firm was not dissolved, in such an 
eventuality a composite suit can be filed by any of the partner(s) to seek the 
dissolution of the firm and at the same time ask for the rendition of 
accounts. As regards the third exception seeking enforcement of “any right or 
power to release the property of a dissolved firm”, again in view of the clear 
language of the exemption the condition is the same i.e. the “dissolved 
firm”, postulating that the firm should have been dissolved as a 
prerequisite for the enforcement of the right of realizing the property etc. or 
a composite suit should be filed. It may be pertinent to state here that in 
case of a dispute between the parties as to whether a firm has been 
dissolved or not, where the dissolution is not being sought by the plaintiff 
rather the other reliefs falling within the exceptions are sought, the court 
shall primarily consider and determine this aspect of the matter (i.e. the 
dissolution of the firm) and depending upon the positive outcome in favour of the 
plaintiff shall consider and grant the second (or ancillary) relief(s) of rendition 
of accounts, or realization of property etc. as the case may be. It may be 
noted that in order to cross the bar of section 69 when it is set out as a 
defence by the other side the plaintiff can always seek amendment of the 
plaint and ask for dissolution at the appropriate stage of the proceeding; 
Civil Appeal No.363-L/2015 
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but this has not been so done in the present case. It may be candidly 
specified that this second relief(s) in all the cases falling within exception is 
subservient and is circumscribed by the dissolution of the firm in the first 
instance and is not an independent and separate relief(s) by itself. In case 
the firm is not dissolved, such relief(s) being hermetically insulated thereto 
cannot be granted and the plaint is liable to be rejected as the suit shall be 
barred by law (section 69 ibid). 
11. 
 
In the instant case when we look at the contents of the plaint, 
not only from the title of the suit but also from the averments made therein 
it is unmistakably clear that the appellant is seeking a declaration to the 
effect about the existence of the firm which means the firm is existent; for 
the specific enforcement of his rights under the partnership deed and 
performance of respondents duties on that basis, as also in relation to the 
business of the firm, again with the clear assertion that the firm is intact, 
and then for the rendition of accounts and the cancellation of the document 
vide which the respondents has created a Waqaf-ul-Aulad of the firm 
property(ies) to his son which the appellant claims to be violative of his 
rights under the deed and for permanent injunction. All those statements 
and the relief(s) are not in consonance with and do not fall strictly within 
the exceptions created by law. In this context it shall be quite relevant to 
reproduce the prayer clause of the plaint, which reads as below:- 
“1. 
It be declared that the defendants are bound to act 
upon the partnership deed dated 22-02-1986 
executed between the plaintiff and the defendant 
No.1 in its true letter and spirit. 
2. 
It be declared that defendant No.2 has got nothing 
to do with the suit property and defendant No.1 is 
bound to perform his part of the partnership deed 
supra and to act upon and perform his obligations 
towards the plaintiff. That the defendants be 
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ordered to pay the due profits to the plaintiff till the 
expiry of partnership deed and also to pay the net 
price of the construction building according to new 
construction this time, 30% of the goodwill of the 
school thereon the plot/land according to terms and 
conditions of partnership deed dated 22-02-1986. 
3. 
That alleged document of waqaf Ali-ul-ulad dated 
20-01-2004 executed by the defendant No.1 in the 
favour of defendant No.2 is liable to be cancelled 
qua the rights of the plaintiff and to pay the 
requisite profits qua the school by way of rendition 
of account. It also be declared that document 
waqaf-ul-ulad dated 20-01-2004 executed by the 
defendant No.1 in the favour of the defendant No.2 
is totally based on malafides, ulterior motives just 
to grab the rights of the plaintiff qua the school 
concern and to avoid the partnership deed. 
4. 
That defendants be ordered not to violate and to 
infringe the terms and conditions qua the rights of 
the plaintiff by any way. 
5. 
That the defendants be restrained by way of 
permanent injunction not to alter, change the 
structure and status of the school by any way or to 
cause any sought of lien qua the school in 
question.” 
 
 
Obviously, on account of the nature of the suit, the statement(s) 
contained therein, and the prayer made or the reliefs claimed in the plaint, 
the plaint falls within the purview of the clear bar contemplated by Section 
69(1) and (2) and as per the law declared in Usman vs. Haji Omer (PLD 
1966 SC 328) and the law being expressed vide this opinion. Such bar 
being absolute, unequivocal and categorical, and as the case of the 
appellant does not fall within the strict exceptions of the law, explained 
above, which we have already held should be construed on the standards 
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meant and are akin to the rules of interpretation of a proviso attached to a 
provision (section); and it is settled law that such exception or proviso should 
be strictly construed and applied. Applying this principle to the case in 
hand from the clear wording of the exceptions (reproduced above) the case of 
the appellant does not fall within those. As regards the submission of the 
learned amicus that the rule of severance may be applied and that the 
partial rejection of plaint is not permissible, suffice it to say that though the 
pleas may be worthy of consideration and resolution in some other case but 
in view of the ratio of this opinion the same can be skipped. In light thereof, 
we do not find any force in this appeal which is liable to be dismissed. It 
may however be observed that we agree with the submission of the learned 
counsel for the respondents that the appellant may either file a fresh suit 
first seeking dissolution of the firm or wait for the dissolution thereof till 
February next year, which in any case shall give him a fresh cause of action 
and the bar of section 69 and for that matter the period of limitation shall 
obviously not come in his way. Before parting we may express our 
appreciation for the valuable and able assistance provided by the learned 
amicus. The appeal is dismissed. 
 
 
 
JUDGE 
 
 
 
 
 
JUDGE 
 
 
 
 
 
JUDGE 
Announced in open Court 
on 23.12.2015 at Lahore 
Approved For Reporting 
Waqas Naseer/*