QUESTION#1(10 MARKS)

Malik, Asif and Sohail are partners in a firm carrying on dairy business and sharing

the profit or loss equally. Malik has recently started a poultry business in the same

vicinity for which he has applied for a loan from a bank. As a security of the loan, he

offered the bank to create charge over the book debts of the poultry business together

with his interest in the dairy business.

Under the provisions of the Partnership Act, 1932 describe the bank's rights and

limitations in the dairy business. (05)

(b) Tahira, Farhana and Sadia are partners in a bridal boutique situated in the local

market. Sadia also owns a jewellery shop in the same market. The shop is managed

by her brother, Wasi. Tahira and Farhana were not aware of Sadia's interest in the

jewellery shop. Most of the clients from the bridal boutique buy jewellery sets from

Sadia's shop. During the year, Sadia earned a hefty profit of Rs. 10 million from the

jewellery business.

Upon knowing the fact of Sadia's interest in the jewellery shop, both Tahira and

Farhana demanded Sadia to share her profits equally with them.

Under the provisions of the Partnership Act, 1932 explain whether Tahira and

Farhana are justified in their demand. (05)