M. YOUSUF ADIL SALEEM & CO. VS HAMID MASOOD, 2007 PTD-KARACHI-HIGH-COURT-SINDH 1636 (2007)

2007 P T D 1636

[Karachi High Court]

Before Muhammad Afzal Soomro and Rahmat Hussain Jafferi, JJ

M. YOUSUF ADIL SALEEM & CO. and 7 others

Versus

HAMID MASOOD

High Court Appeal No.30 of 2007, decided on 25/04/2007.

(a) Partnership Act (IX of 1932)---

----Ss. 32, 33, 39, 40, 41, 42, 43 & 44---Retirement of a partner---Modes, conditions and effect---Where the partnership provides the mode of retirement, such mode has to be adopted for retirement alone which would fall within the ambit of S.32(1)(b), Partnership Act, 1932---Principles.

A perusal of Partnership Act reveals that there are three ways of retirement of partner: (1) dissolution of partnership as provided under sections 39 to 44; (2) one or more partners' retirement as provided under section 32; and (3) expulsion of partner as provided under section 33. It will be noticed that the word "dissolution" is defined whereas "retirement" is not defined in the Partnership Act. The retirement of a partner from the firm is somewhat different from the dissolution of the firm. According to section 39 which defines the dissolution, "dissolution" means dissolution of the partnership as between all the partners. What happens on the retirement, on the other hand, is that the partnership is not dissolved. It remains what it has been, but only a member or two leave it. This can happen clearly because the very scheme of the Partnership Act is such that ingress and egress of members can be regulated without affecting the continuity of the firm.

The retirement of a partner has the effect of dissolving the jural relations of partnership inter se amongst all the partners. A partner can retire in the cases set out in section 32 and when he does so, he is said to have retired from the firm.

From the bare reading of S.32, Partnership Act, 1932 it is clear that a partner may retire;

(a) with the consent of all other partners. This will result in amicable retirement of a partner,

(b) in accordance with an express agreement by the partners. This will result in a case where the partnership agreement itself provides for the retirement of a partner or partners under certain conditions,

(c) in case a partnership is at will a partner may retire by giving notice in writing to all other partners of his intention to retire.

It appears that all the three clauses of S.32, Partnership Act, 1932 cover different situations as clause (a) deals with the situation where there is no express agreement in the partnership deed with regard to the retirement of partners or the partnership is at will.

Clause (a) is a general provision about retirement of partner. The clauses (b) and (c) deal with specific situations mentioned thereunder, as such, those are special provisions in respect of retirement of partner. When a statute has general and special provisions then special provision will prevail over general provision. Applying the above principle when conditions mentioned in clauses (b) & (c) are fulfilled then retirement should be made in that manner alone as the partners have unanimously agreed to such procedure. If no such agreement appears in the partnership deed then the partner can retire in the manner as provided under clause (a) only. Nevertheless, if all the partners agree upon retirement of partner in the manner as provided under clause (a), then such mode can also be adopted in retirement of partner, subject to proof of such fact showing modification in the partnership agreement within the meaning of Articles 102 & 103 of Qanun-e-Shahadat, 1984. Thus the clauses (a), (b) & (c) are mutually exclusive.

Where the partnership deed provides the mode of retirement, such mode should be adopted for the retirement alone. If a thing is required to be done in a particular manner then it shall be done in that manner alone. When the mode of retirement is provided in thepartnership deed, the case would fall within the ambit of section 32(1)(b) of Partnership Act.

S.W.F. Product (Pvt.) Limited v. Sohanlal Bagla AIR 1964 Cal.209; IT v. A.W. Figgis AIR 1953 SC 455 and Moss v. Elphick 102 LT 639 ref.

(b) Partnership Act (IX of 1932)---

----Ss. 7 & 68---Partnership at will--Rules of evidence---Principles---Entries of the Registrar of Firms appearing in his Register made on the information furnished by firm would be conclusive proof against the firm by virtue of S.68, Partnership Act, 1932---Estoppel, principle of---Applicability---Scope---`Conclusive proof' and `conclusive evidence'---Definition.

Somawanti v. State of Punjab AIR 1963 SC 151 ref.

(c) Partnership Act (IX of 1932)---

----S. 7-Partnership at will---Implications---Where no provision is made by contract between the partners for the duration of the partnership, or for the determination of the partnership, the partnership is `partnership at will'---Exceptions.

Section 7, Partnership Act, 1932 provides that where no provision is made by contract between the partners for the duration of the partnership, or for the determination of the partnership, the partnership is partnership at will. Thus, section 7 of the Act contemplates two exceptions to a partnership at will. The first exception is where there is a provision in the contract for the duration of the partnership, the second exception is where there is a provision for the determination of partnership. In either of these cases the partnership is not at will. The duration of a partnership may be expressly provided in the contract. Nevertheless, where there' is no express agreement to continue a partnership for a definite period there may be an implied agreement to do so. The general rules of partnership are well settled. Where no term is expressly limited for its duration, and there is nothing in the contract to fix it, the partnership may be terminated at a moment's notice by either party-without doubt, in the absence of express term, there may be an implied contract as to the duration of a partnership.

The same principle applies to a case of determination. The contract may expressly provide that the partnership will determine in certain circumstances; but even if there is no such express term an implied term as to when the partnership will determine may be found in the contract.

It has been observed in Moss's case (102 L.T. 639) that in order to negative the implication of a partnership at will, there must be some express or implied agreement that is inconsistent with the right which a partner would otherwise have to determine the partnership by notice. Thus, an express term that "This agreement shall be terminated by mutual arrangement only" will clearly amount to such an agreement.

Whether the partnership is a partnership at will or not is a question of interpretation of the partnership deed and the conduct of the partners.

Crawshay v. Maula (1818) 36 ER 479 ref.

(d) Partnership Act (IX of 1932)---

----Ss. 7 & 32(1)(c)---Partnership at will---Retirement of a partner---Procedure provided under S.32(1)(c), Partnership Act, 1932 is required to be followed.

(e) Words and phrases---

----`Tantamount'---Meaning.

Chamer's 21st Century Dictionary ref.

(f) Partnership Act (IX of 1932)---

----S. 32(1)(a)---Retirement of a partner---Conditions---Mere non-signing of agreement of alteration of partnership deed cannot be a ground by itself to retire a partner.

Under section 32(1)(a) of the Partnership Act, 1932 a partner has to make, suggest or intend to retire voluntarily with his freewill, without any pressure, inducement, threat, promise and such proposal or intention of retirement can be expressed at any time subject to the condition that all the partners are agreeable to retirement, voluntarily with their own freewill without any pressure, inducement or coercion. Partnership is a voluntary association of consenting members, therefore, with equal ease the membership of anyone of them can be de-linked with the consent of all of them. "Consent" may take the form of an express agreement, but it may equally be inferred from conduct. The very fact that nobody objects to the retirement is sufficient evidence of consent by acquiescence. Nevertheless, the first and foremost condition is the intention or proposal of retirement of the partner, which should be voluntarily made clear, unambiguous, without pressure, promise and coercion. If the above elements are missing in the proposal then the same cannot be termed as a valid and legal proposal hence the consent, if any,given on such type of proposal would not affect the relationship between the partners.

The non-signing of the agreement of alteration of partnership deed was not the ground by itself to retire a partner.

(g) Partnership Act (IX of 1932)---

----Ss. 7, 32 & 68---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Partnership at will---Suit for permanent injunction with a prayer for restraining the defendant (one of the partners) from acting as partner of the firm and for mandatory injunction---Plaintiff had failed to show the prima facie case in his favour---Balance of convenience was also not in favour of the plaintiff as great inconvenience was likely be caused to the defendant if he was debarred from participating in the partnership firm---Defendant was associated with the firm from the year '1986 and had raised serious objections before the Registrar of the Firms when he came to know that his name was excluded from the partnership firm and conditions mentioned in S.32(1)(b) of the Partnership Act, 1932 had not been fulfilled---If the defendant was debarred from acting as partner in the firm, irreparable loss would be caused to him which could not be compensated in terms of money because he would suffer not only financially but mentally and physically---High Court declined to interfere in the order refusing the grant of injunction by the Single Judge in original jurisdiction.

(h) Estoppel---

----Principle of---Applicability---Scope.

Somawanti v. State of Punjab AIR 1963 SC 151 ref.

Kamal Azfar for Appellants.

Salahuddin Ahmed for Respondent.

Date of hearing: 28th March, 2007.

JUDGMENT

RAHMAT HUSSAIN JAFFERI, J.---The present appeal is directed against the order dated 22-2-2007 by which the learned Single Judge on the Original Side dismissed the application under Order XXXIX, rules 1 and 2, C.P.C. filed by the appellant in Suit No.104 of 2007.

2. Brief facts giving rise to the present appeal are that on 10-7-1986 a firm under the name and style of "M. Yousaf Adil & Co." (MYACO) was formed by several persons to carry out the business of chartered accountants under a deed of partnership. The said deed undertook several changes by executing deeds of retirement and reconstitution of the firm. Lastly, the following five members were the partners of the firm.

(1) Mr. Muhammad Yousuf Adil, (2) Mr. Mushtaq Ali Hirani, (3) Mr. Hamid Masood, (4) Mr. Islam Nabi Khan, (5) Irfan Rahman Malik.

3. On 31-12-1996 the above named partners of the firm and the partners of a firm Ilyas Saleem & Co. (ISCO), Chartered Accountants executed a deed of partnership by which both the firms were merged and the business was allowed to run under the name and style of "Muhammad Yousaf Adil & Co.". The said partnership deed was at will. All the earlier Partnership deeds were substituted by the deed executed on 31-12-1996. The said deed also went and undergone several changes and was substituted on the retirement of partners or reconstitution of the firm.

4. Before the dispute arose between the partners the last deed of partnership, which was operative, was dated 2-2-2005. Its heading was "Alteration of Partnership Deed" in which there were 10 partners. The respondent was partner No.8. In the Partners General Meeting dated 28-2-2005 it was decided that some amendments might be made in the "Alteration of Partnership Deed". A draft of proposal of amendments was also circulated amongst all the partners. In order to consider and approve the amendments - in the "Alteration of Partnership Deed", Partners General Meeting was held on 7-12-2006. Nine partners participated in the meeting. The draft of amendments in the partnership deed was discussed. The respondent made certain suggestions. The suggestions were considered by the partners. It appears that some of the suggestions made by the respondent were not agreed, therefore, it is alleged that the respondent did not sign the final "Alteration of Partnership Deed" dated 7-12-2006, hence, the firm made application to the Registrar of Firms declaring that the respondent had retired from the firm. Registrar made such entry in the relevant register. The respondent challenged the said entry by filing objections levelling certain allegations against the partners. It appears that the respondent continued to treat himself, as partners of the firm, therefore, the appellant filed the suit for permanent injunction with a prayer of restraining the respondent from acting as partner of the firm and for mandatory injunction.

5. The appellant filed application under Order XXXIX, rules 1 and 2, C.P.C. for grant of temporary injunction which was dismissed by the learned Single Judge under the impugned order.

6. We have 'ward the Advocates for the appellant, respondent and perused the record of this case very carefully.

7. The learned Advocate for the appellant has stated that the partnership was not partnership at will; that the respondent by not signing the "Alteration of Partnership Deed" dated 7th December, 2006 ceased to become member of the firm; that the Registrar of Firms made such entry in the required register, therefore, the said entry is conclusive proof as provided under section 68 of Partnership Act; that the observation of the learned Single Judge that the required notice, as provided under section 23(1)(c) of the Partnership Act, was not given, is not applicable in the case as the partnership was not at will; and that the case will be governed under section 32(1)(a) of Partnership Act by which a partners can retire with the consent of all the partners which has been done in the present case. He has referred to the minutes of the meeting of Partners General Meeting dated 7th December, 2006 and the decision taken under Item No.2 of the agenda of the meeting. He has also referred to section 7 of the Partnership Act.

8. Conversely, the learned Advocate for the respondent has stated that the partnership is partnership at will as clear from the entry in the register of the Registrar of the Firms which has been filed by the appellant and is available at page 109 of the file; that for retiring a partner of such partnership the provisions of section 32(1)(c) would be applicable by which a partner can retire by issuing a written notice; that no such notice was issued, therefore, the respondent did not retire from the partnership. He has further stated that under clause (8) of "Alteration of Partnership Deed" dated 2nd February, 2005 a partner can retire after serving an advance notice of 6 months which has also not been done in this case; that the respondent did not retire within the meaning of section 32(1)(a) and there is no consent of other partners for such retirement; that the minutes of the meeting relied upon by the Advocate for the appellant does not support his contention but it supports his plea. He has further argued that the presumption of conclusive proof as required under section 68 of Partnership Act will be applicable against the person who supplied the required information to the Registrar. He has relied upon S.W.F. Product (Pvt.) Limited v. Sohanlal Bagla (AIR 1964 Cal. 209).

9. We have given due consideration to the arguments, gone through the material available on the record with the assistance of parties' counsel.

10. A perusal of Partnership Act reveals that there are three ways of retirement of partner: (1) dissolution of partnership as provided under sections 39 to 44; (2) one or more partners' retirement as provided under section 32; and (3) expulsion of partner as provided under section 33. It will be noticed that the word "dissolution" is defined whereas "retirement" is not defined in the Partnership Act. The retirement of a partner from the firm is somewhat different from the dissolution of the firm. According to section 39 which defines the dissolution, "dissolution" means dissolution of the partnership as between all the partners. What happens on the retirement, on the other hand, is that the partnership is not dissolved. It remains what it has been, but only a member or two leave it. This can happen clearly because the very scheme of the Act is such that ingress and egress of members can be regulated without affecting the continuity of the firm. In the case of IT v. A.W. Figgis (AIR 1953 SC 455) at page 456, while commenting upon the above subject, it has been observed as under:--

"(7) It is true that under the law of partnership a firm has no legal existence apart from its partners and it is merely compendious name to describe its partners but it is also equally true that under that law there is no dissolution of the firm by the mere incoming or outgoing of partners. A partner can retire with the consent of the other partners and a person can be introduced in the partnership with the consent of the other partners. The reconstituted firm can carry of its business in the same firm's name till dissolution. The law with respect to retiring partners as enacted in the Partnership Act is to a certain extent a compromise between the strict doctrine of English Common Law which refuses to see anything in the firm but a collective name for individuals carrying on business in partnership and the mercantile usage which recognizes the firm as a distinct person or quasi-corporation."

11. Thus it is clear that the retirement of a partner has the effect of dissolving the jural relations of partnership inter se amongst all the partners. A partner can retire in the cases set out in section 32 and when he does so, he is said to retire from the firm. The said section reads as under:-

"32. Retirement of a partner.---(1) A partner may retire---

(a) with the consent of all the other partners,

(b) in accordance with an express agreement by the partners, or

(c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire."

12. From the bare reading of the above provision it is clear that a partner may retire:--

(a) with the consent of all other partners. This will result in amicable retirement of a partner.

(b) in accordance with an express agreement by the partners. This will result in a case where the partnership agreement itself provides for the retirement of a partner or partners under certain conditions.

(c) in case a partnership is at will a partner may retire by giving notice in writing to all other partners of his intention to retire.

13. It appears that all the three clauses cover different situations as clause (a) deals with the situation where there is no express agreement in the partnership deed with regard to the retirement of partners or the partnership is at will.

14. It will be noticed that the clause (a) is a general provision about retirement of partner. The clauses (b) and (c) deal with specific situations mentioned thereunder, as such, they are special provisions in respect of retirement of partner. It is well settled that when a statute has general and special provisions then special provision will prevail over general provision. Applying the above principle we are of the view that when conditions mentioned in clauses (b) and (c) are fulfilled then retirement should be made in that manner alone as the partners have unanimously agreed to such procedure. If no such agreement appears in the partnership deed then the partner can retire in the manner as provided under clause (a) only. Nevertheless, if all the partners agree upon retirement of partner in the manner as provided under clause (a), then such mode can also be adopted in retirement of partner, subject to proof of such fact showing modification in the partnership agreement within the meaning of Articles 102 and 103 of Qanun-e-Shahadat, 1984. Thus the clauses (a), (b) & (c) are mutually exclusive. Reference is invited to a case of Moss v. Elphick (102 L.T. 639). hi that case section 26 of Partnership Act, 1890 was interrupted, at page 640 it was observed as under:--

"Section 26 runs thus: "where no fixed term has been agreed upon for the duration of the partnership, any partner may terminate the partnership at any time on giving notice of his intention so to do to all the other partners." It is argued that that applies to all cases in which there has not been a definite term fixed in the partnership deed. I do not think that that is the meaning. I think that it refers only to cases in which the partnership deed is silent as to terms with regard to the duration of the partnership. The section is not intended to negative any provision which the partnership deed may contain by which the duration of the partnership is fixed. It is to take effect only where there is no provision for fixing the duration of the partnership. The deed here contains this term: "This agreement shall be terminated by mutual arrangement only". It is in effect an agreement for partnership during the joint lives of the partners subject to termination by mutual agreement. I think that there is a specific provision as to the duration of the partnership. The duration of the partnership is in that sense fixed by the agreement and section 26 does not apply at all. The ground of my decision is that section 26 is not intended to limit freedom of contract with regard to the duration of partnerships, and that it only applies where the agreement contains no provisions regulating the duration."

15. In the present case the partnership deed provides the mode of retirement, therefore, such mode should be adopted for the retirement alone. It is well settled that if a thing is required to be done in a particular manner then it shall be done in that manner alone. Thus the present case would fall within the ambit of section 32(1)(b) of Partnership Act.

16. However, we are going to examine all the three modes, as the parties' advocates have argued on all the three modes of retirement though it is not necessary to do so, because discussion on clause (b) would be sufficient to determine the question of retirement of partner in this case.

17. The learned Single Judge held that the partnership is at will. The learned Advocate for the appellant has challenged such finding and relied upon section 7 in his support. The learned Advocate for the respondent has referred to entry of the Registrar of Firms appearing at page 109, under clause (4) with heading "Duration" it has been mentioned; "Partnership at Will". The last entry of this document was maintained on 21-12-2006. under which it is mentioned that "partner namely Hamid Masood son of Sardar Ali has retired from the partnership firm with effect from 7-12-2006". It is admitted that these entries were made on the information furnished by the firm, therefore, by virtue of section 68 of Partnership Act, 1932 the entry will be conclusive proof against the firm. Because section 68 lays down two principles which constitute special rules of evidence relating to the position of a registered firm and its partners. One of them is that only statement; intimation or notice which has been entered in the Register of Firms constitute conclusive proof as against the person by or on whose behalf the statement, etc., was filed. It is further clarified that the effect of a conclusive proof, is that if for example a person has notified to the Registrar that he has become the partner of the firm since a particular date, he will not subsequently be permitted to prove that he was not a partner in fact. His earlier statement to the Registrar creates an estoppel against him and he cannot be permitted to resile from it. Such evidence is conclusive only against the party by or on whose behalf a statement is filed but not against others. The expressions "conclusive proof" and "conclusive evidence" have been defined in the case of Sornawanti v. State of Punjab AIR 1963 SC 151 at page 159 as under:--

"Since evidence means and includes all statements which the Court permits or requires to be made, when the law says that a particular kind of evidence would be conclusive as to the existence of a particular fact it implies that fact can be proved either by that evidence or by some other evidence which the Court permits or requires to be advanced. Where such other evidence is adduced it would be open to the Court to consider whether, upon that evidence, the fact exists or not. Where, on the other hand, evidence which is made conclusive is adduced, the Court has no option but to hold that the fact exists. If that were not so, it would be meaningless to call a particular piece of evidence as conclusive evidence. Once the law says that certain evidence is conclusive it shuts out any other evidence which would detract from the conclusiveness of the evidence. In substance, therefore, there is no difference between conclusive evidence and conclusive proof. Statutes may use the expression 'conclusive proof' where the object is to make a fact non-justiciable. But the legislature may use some other expression such as 'conclusive evidence' for achieving the same result. There is thus no difference between the effect of the expression 'conclusive evidence' from that of 'conclusive proof', the aim of both being to give finality to the establishment of the existence of a fact from the proof of another."

18. The second principle is that for the purpose of proving the registration of a firm or the contents of any statement, etc., recorded in the register, a certificate of the entries in the register will be sufficient.

19. In view of the above entry in the register of the Registrar of Firms the status of partnership firm is "Partnership at Will". Such entry was made on the statement or information supplied by the firm, therefore, it is conclusive proof against the firm, apparently, the firm is stopped from challenging it by saying that it is not a partnership at will.

20. Now we come to section 7, which provides that where no provision is made by contract between the partners for the duration of the partnership, or for the determination of the partnership, the partnership is partnership at will. Thus, section 7 of the Act contemplates two exceptions to a partnership at will. The first exception is where there is a provision in the contract for the duration of the partnership, the second exception is where there is a provision for the determination of partnership. In either of these cases the partnership is not at will. The duration of a partnership may be expressly provided in the contract. Nevertheless, it is said in Halsbury's Laws of England that where there is no express agreement to continue a partnership for a definite period there may be an implied agreement to do so. In Crawshay v. Maule, [(1818) 36 ER 479, 483], the same principle was laid down in these word: "The general rules of partnership are well settled. Where no term is expressly limited for its duration, and there is nothing in the contract to fix it, the partnership may be terminated at a moment's notice by either party-without doubt, in the absence of express term, there may be an implied contract as to the duration of a partnership.

21. The same principle in our opinion applies to a case of determination. The contract may expressly provide that the partnership will determine in certain circumstances; but even if there is no such express term an implied term as to when the partnership will determine may be found in the contract.

22. It has been observed in the case of Moss's case (supra) that in order to negative the implication of a partnership at will, there must be some express or implied agreement that is inconsistent with the right which a partner would otherwise have to determine the partnership by notice. Thus, an express term that "This agreement shall be terminated by mutual arrangement' only" will clearly amount to such an agreement.

23. Whether the partnership is a partnership at will or not is a question of interpretation of the partnership deed and the conduct of the partners. Such question is to be decided by the trial Court. Under clause 18.2 of the deed of partnership the Partners General Meeting (PGM) has been authorized to dissolve the partnership. Apparently it shows and provides the mode of determination of partnership. At the same time the appellant has also filed the entry of register of Registrar of Firms showing that the partnership is partnership at will which is conclusive proof against the firm. Both these documents are apparently in conflict with each other, therefore, they are required to be examined in detail with evidence led by the parties on the documents which can be undertaken by the trial Court as it involves deeper appreciation of evidence. It is not proper for this Court, at this stage, to examine in detail to decide such aspect of the case.

24. Thus, for retiring a partner of partnership at will the procedure provided under section 32(1)(c) is required to be followed which has not been done in the present case.

25. As regards the second ground of retirement as provided under clause (b), it is pointed out that in the partnership deed the procedure of retirement of partners has been mentioned under clause 8.1. It provides that the partner can retire from the partnership voluntarily by giving a written advance notice of six months to EMG. Admittedly, the said procedure has also not been adopted.

26. As regards clause (a), emphasis has been placed on the minutes of the meeting dated 7th December, 2006. The Item No.2 of the meeting was "Consideration and approval of the amendments in the "Alteration of Partnership Deed" dated February 28, 2005 in order to execute "Supplementary Partnership Deed". The draft supplementary partnership deed was discussed in which the respondent made 18 suggestions. Some of them were agreed upon some were not. Thereafter the minutes of the meeting read as under:

"At this stage, HM insisted that without determination of sharing ratio without giving him representation in the EMG/Board, he cannot become party to this partnership deed and cannot continue as a partner.

AAS pointed out that as has been explained in earlier meetings and emails, the proposed changes in the deed are considered essential for the Firm's operational integration/clustering with DTME and all of these changes have already been agreed with the representatives of DTME (Mr. Omar Fahoum Managing Partner Deloitte Middle East and Mr. Nauman Ahmed, Partner Deloitte Saudi Arabia) as well as the Regional Managing Partner of Deloitte Asia Pacific Mr. Manoj Singh and the Managing Partner for Audit Services Mr. Randal Cochrane and therefore, such changes are essential for continuation of the firm as a member of Deloitte Touche Tohmatsu. He further pointed out that any partner who does not approve and sign these changes that are in line with DTT Policies and Modern Professional Organization (MPO) principles, cannot continue as a partner of the firm and will stand retired.

After detailed deliberations, the eight partners agreed to adopt and sign "Alteration of Partnership Deed". After above amendments, it was also decided to include following paragraph as second last paragraph of the deed and make consequential amendments on page 1 and in Appendix and approve and sign the Alteration of Partnership Deed.

"Hamid Masood did not sign this Alteration of Partnership Deed and, therefore, it was adopted and signed by all the remaining eight Partners in pursuance to a decision taken at the Partners General Meeting held on December 7, 2006 in accordance with the clauses 18.2 and 18.5 of the Alteration of Partnership Decd dated February 28, 2005."

In Appendix, word HM and his sharing basis be deleted."

All the eight partners then approved, executed and signed the Alteration of Partnership Deed dated December 7, 2006 whereas HM opted out of the Firm which tantamounts to his retirement from this Firm."

27. A perusal of the above minutes of the meeting reveals that firstly they are not signed by the respondent, as such, apparently it is not binding upon him, secondly when the suggestion of the respondent about determination of sharing ratio without giving him representation in EMG Board, was not agreed he allegedly declared that he would not be party to the partnership deed and could not continue as partner. The respondent has denied making such suggestion. He also filed objections before Registrar of the Firm. Thus, the said aspect of the case requires deeper appreciation of evidence. Further it will be noticed that the said suggestion was apparently not agreed upon by the other partners as the next paragraph shows that Asad All Shah (AAS) pointed out that any member who did not approve and sign the changes could not continue as a partner of the firm and would stand retired in view of integration with DTME and others. Thereafter the matter was discussed and eight members excepting respondent agreed that a new paragraph should be added in the deed that the respondent did not sign the "Alteration of Partnership Deed" and thereafter the remaining eight members approved, executed and signed the "Alteration of Partnership Deed" dated 7th December, 2006, whereas it was further observed that respondent opted out of the firm which "tantamount" to his retirement from the firm.

28. If the proposal of the respondent would have been accepted then there was no need for AAS to make further proposal suggesting the retirement of partner on the ground of not signing the agreement. The said proposal of AAS was accepted. It appears that the respondent did not sign the deed, therefore, it was mentioned in the agreement that it "tantamount" to his retirement from the firm. The word "tantamount" clearly shows the intention of the partners as the Chamber's 21st Century Dictionary defines the word "tantamount" as producing the same effect or result as something; as good as it; equivalent to it. Thus the non-signing of the agreement was not the ground by itself to retire a partner but they considered the same to be equivalent to the retirement.

29. Under section 32(1)(a) a partner has to make, suggest or intend to retire voluntarily with his freewill, without any pressure, inducement, threat, promise and such proposal or intention of retirement can be expressed at any time subject to the condition that all the partners are agreeable to retirement, voluntarily with their own freewill without

any pressure, inducement or coercion. It is pointed out that partnership has a voluntary association of consenting members therefore, with equal ease the membership of anyone of them can be de-linked with the consent of all of them. "Consent" may take the form of an express agreement, but it may equally be inferred from conduct. The very fact that nobody objects to the retirement is sufficient evidence of consent by acquiescence. Nevertheless, the first and foremost condition is the intention or proposal of retirement of the partner, which should be voluntarily made clear, unambiguous, without pressure, promise and coercion. If the above elements are missing in the proposal then the same cannot be termed as a valid and legal proposal hence the consent, if any, given on such type of proposal would not affect the relationship between the partners.

30. In the present case the respondent has denied to have made proposal of retirement had also filed objections before the Registrar of the Firms when he came to know that the firm had sent intimation for removal of his name from the partnership. These facts can be properly decided after adducing evidence by the parties.

31. The above minutes of the meeting requires deeper appreciation of evidence which can be undertaken at the time of trial. At this initial stage no definite finding can be given with regard to the said point. The observations made by us in the order are tentative in nature in order to arrive at a conclusion whether or not there is a prima facie case in favour of the appellant.

32. From the tentative assessment we are of the considered view that the appellant has failed to show the prima facie case in his favour.

33. Balance of convenience is also not in favour of the appellant as great inconvenience will be caused to the respondent if he is debarred from participating in the partnership firm. He is associated with the firm from the year 1986. Furthermore, he raised serious objections before the Registrar of the Firm when he came to know that his name was excluded from the partnership firm and conditions mentioned in section 32(1)(b) have not been fulfilled. If he is debarred from acting as partner in the firm, irreparable loss will be caused to him which cannot be compensated in terms of money because he will suffer not only financially but mentally and physically.

34. In the light of what has been discussed above, we are of the considered view that the Impugned order does not require any interference. Consequently, the appeal is dismissed.

M.B.A./M-60/KAppeal dismissed.