LHC rules business partnership disputes as civil matters, not criminal
Pakistan
LHC ruled that business partnership disputes are civil, not criminal matters. It overturned a case filing based on a business dispute, declaring the FIR invalid in a dispute involving embezzlement.
LAHORE (Dunya News) – The Lahore High Court (LHC) has ruled that criminal action cannot be taken in business partnership disputes.
Justice Tariq Saleem Sheikh overturned the decision made by a Justice of Peace to file a case against the petitioner based on a business dispute. The judge has issued 14-page written verdict in the case filed by a citizen named Mobeen Ahmed.
In the judgment, the court stated that a partner in a business cannot be accused of embezzlement concerning joint property. The partnership dispute, the court clarified, is not of a criminal nature but rather a civil matter that can be resolved through settlement in civil courts.
The complainant is a Pakistani-American citizen and a retired US Army serviceman who operated a pharmacy business. The complainant claimed that the petitioner, who was allegedly his sales manager, had embezzled significant amounts of money, including missing medicines worth over Rs50 million, as per an audit.
The complainant further alleged that the SHO (Station House Officer) did not take action on his complaint, which led him to approach the Justice of Peace, who ordered the filing of a case.
However, the petitioner argued that he was not an employee but a partner in the company, having invested Rs500,000 for a 15% share in the business.
The petitioner also claimed that the complainant had concealed the partnership agreement and falsely portrayed him as an employee.
The court ruled that the decision of the Justice of Peace to file a case was not legally sound and therefore could not be upheld. The high court nullified the FIR and declared the case invalid.
