2005 C L C 797
[Karachi]
Before Azizullah M. Memon, J
KAMRAN AKHTER---Appellant
versus
JAWED AHMED KHAN---Respondent
First Appeal No.10 of 2004, decided on 17th January, 2005.
Civil Procedure Code (V of 1908)---
----O. XXXVII, Rr. 2 & 3---Suit for recovery of amount---Cheque for
repayment of amount of loan which was issued by defendant on 7-12-
2000, was presented by plaintiff in Bank on 24-7-2001, after more than
six months of its issue---Bank declined to encash cheque as same bore
date of issue of more than past six months and had become stale
cheque ---Suit based on such out of date stale cheque, could not have
been decreed by Trial Court---Appeal filed against judgment of Trial
Court was allowed and suit was remanded to Court below with a
direction that same be treated to have been filed under ordinary
provision of Civil Procedure Code and be tried and decided
accordingly.
Habib Bank Ltd. v. Jamilur Rehman 1994 MLD 271; Messrs Karachi
Bonded Stores Ltd. v. Trustees of the Port of Karachi 1999 MLD 3214;
Retd. Colonel Ashfaq Ahmed and others v. Shaikh Muhammad Waseem
1999 SCMR 2832; United Bank Limited Mianwali v. Muhammad Khan
and another PLD 1988 Lah. 424 and Sh. Abdul Majid v. Syed Akhtar
Hussain Zaidi PLD 1988 SC 124 ref.
Zaheer Minhas for Appellant.
S. Ali Ahmed Tariq for the Respondent.
Date of hearing: 10th January, 2005.
JUDGMENT
Appellant has filed this civil appeal under section 96, C.P.C. against
the judgment dated 3rd July, 2003 and decree, dated 8th July, 2003
passed by learned District Judge, Karachi South in Suit No.21 of 2002,
which was filed by respondent Javed Akhtar under Order 37, rule 2,
C.P.C. for recovery of amount of Rs.7,55,000.
Heard Mr. Zaheer Minhas for appellant and Mr. S. Ali Ahmed Tariq
for respondent also perused the R&P of this case.
The certified copy of the decree filed by the appellant indicates that
it was signed by learned trial Judge on 8th July, 2003, appellant applied
for its certified copy on 21st July, 2003, whereas fees was estimated on
31st July, 2003 for the same which was deposited on the same date, and
the copy was ready on 1st August, 2003, while stamp was supplied on
2nd August, 2003, on which date the certified copy was supplied to the
appellant, who presented memo. of this appeal in this Court on 16th
August, 2003; thus, computing the time which lapsed in between
making of the application and estimation of the cost/fees, the memo. of
appeal was presented within the prescribed time limit.
The facts giving rise to the filing of the present appeal are that
plaintiff/respondent, in his suit under Order 37, rule 2, C.P.C., bearing
No.21 of 2002, asserted that defendant/appellant being his old friend
and having cordial family relations, approached the plaintiff/appellant
on 1st December, 2000 with a request to advance him a friendly loan
of Rs.7,55,000, with a promise to return the same within 6/7 months
from the receipt thereof; as he had pleaded some personal problem,
therefore, the plaintiff/respondent advanced the said friendly loan
amount on the same date; on 7th December, 2003 a Cheque bearing
No.CAL-44053 dated 7th December, 2000 for the said amount, drawn at
the Oman International Bank SAOG, I.I. Chundrigar Road, Branch
Karachi was issued by the appellant from his account and the
plaintiff/respondent received the same, having been assured that the
cheque would be encashed on presentation thereof before the said
bank branch, in the last week of the month of July, 2001, but when on
24th July, 2001 the said cheque was presented by him before the said
bank branch, payment was not received against the same; hence the
defendant/appellant was approached by him for payment of the
amount against the said cheque, but he declined and refused to pay
the same, despite issuance of legal notice to him; hence the suit was
filed under Order 37, rule 2, C.P.C. by the plaintiff/respondent. The
defendant/appellant, in his application under Order 37, rule 3, C.P.C.
pleaded that he was carrying on the business of spare parts of
automobile and was having friendly business relations with the
plaintiffs/respondent and used to take spare parts of the vehicles from
the plaintiff, on the agreement that the amount against such supply of
the spare parts was to be paid after three months and to ensure such
payments, defendants/appellant used to issue cheques in favour of the
plaintiff and whenever any such payment was made to the plaintiff in
cash, the plaintiff used to return back the cheque so issued by the
defendant; the cheque involved in the suit was also issued by the
defendant as guarantee for payment against receipt of the spare parts
for the automobiles, but then he made the payment in cash against the
amount shown in the said cheque, and requested the plaintiff to
return back the disputed cheque, he raised a pretext that it got
misplaced; because the defendant had cordial business relations with
him for many past years and the cheque itself was crossed one, he did
not insist for the return of the cheque; thereafter also, the defendant
continued to have the business relations with the plaintiff of the same
nature till 9th February, 2003, when he was informed by a friend that a
summons was got published by the plaintiff pertaining to the suit in
hand; on inquiry from his banker, he was informed that
plaintiff/respondent had presented the disputed cheque for
encashment, but because it was bearing the date of issue of more than
past six months, therefore, the payment was declined against the
same, the same being the stale cheque .
The learned trial Judge granted the application under Order 37, rule
3, C.P.C. conditionally with a direction to the defendant/appellant to
furnish a guarantee in the sum of Rs.7,55,000, who could not furnish
the same, and filed revision application before this Court against such
conditional order, which was still pending decision, when the learned
trial Judge observed that because the defendant/appellant failed to
comply with the said order of furnishing of the bank guarantee,
therefore, he directed to proceed with the suit ex parte; then vide
impugned judgment, dated 3rd July, 2003 he decreed the suit (followed
by the decree dated 8th July, 2003).
Learned counsel for appellant has placed on record a certificate
issued by the Oman International Bank SAOG, Karachi Office dated
April 16, 2004, wherein it is certified that the disputed cheque was
presented before it on 24th July, 2001 and because the said cheque
stood expired, having been presented after a period of six months
from the date of its issue, the bank officers returned back the same
with the reason stale cheque .
Learned counsel for appellant has cited Habib Bank Ltd. v. Jamilur
Rehman 1994 MLD 271 herein a learned Single Judge of this Court
heard the case of a similar nature, on the point of presentation of the
cheque before the concerned bank, after the expiry of six months from
the date of its issue, and held that wherever the cheque/draft is not
presented within six months of its issue the same would become out of
date or stale and the suit based on such a cheque cannot be decreed.
Learned counsel for plaintiff/respondent has cited Messrs Karachi
Bonded Stores Ltd. v. Trustees of the Port of Karachi 1999 MLD 3214
wherein his Lordship Honourable Mr. Justice Hamid Ali Mirza (as his
Lordship then was), was pleased to observe to the effect, where the
suit for recovery of money under Order 37, rule 3 is based on the
cheque but was dishonoured a presumption would be that said cheque
was executed for consideration shown therein, and that no plausible
defence having been taken in the counter-affidavit filed by the
defendant of the said case, leave to defend the suit was held having
been rightly refused, in such circumstances; with utmost respects and
regards, the facts and circumstances of the said case do not appear to
be identical to the one in hand, for the simple reason that the question
as to whether or not cheque was not encashed for the reasons of its
being stale does not appear to have been extensively dealt with in the
said reported case; so also, learned counsel for plaintiff/respondent
has cited Retd. Colonel Ashfaq Ahmed and others v. Shaikh
Muhammad Waseem 1999 SCMR 2832 wherein Honourable Supreme
Court of Pakistan was pleased to hold that the borrower did not
dispute execution of the cheque but expressed that said cheque was
not intended to be encashed/honoured and, therefore, initial
conditional order granting leave to defend the suit and to furnish bank
guarantee passed by the trial Court did not suffer from any material
defect and that where the defendant failed to fulfil such conditional
order, granting leave to defend the suit, the trial Court was justified in
passing the decree against the defendant; in the said reported case
also, the question as to whether the disputed cheque was dishonoured
as a stale cheque does not appear to have been dealt with by
Honourable Supreme Court and therefore, its facts and circumstances
do not appear to be identical to those of the case in hand.
In United Bank Limited Mianwali v. Muhammad Khan and another
PLD 1988 Lah. 424, learned Lahore High Court was pleased to record
following observations at page 427:--
The main contention of the learned counsel for the appellant is that
even if the pronote produced by them was not admissible in
evidence the suit could not be thrown out by the learned trial
Court. The pronote bears the requisite revenue stamps but the
same are not cancelled in accordance with law. The learned
counsel for the appellant does not dispute that the said pronote
is not admissible in evidence. However, he contends that
sufficient evidence was available on record to prove the case of
the appellant even if the said pronote was altogether excluded
from the evidence. It may be pointed out that the learned trial
Court recorded all the evidence on all the issues reproduced
above. It is on the basis of the said evidence that he argues that
the appellant succeeds in proving his case. Before entering into
the question of fact relating to the proof of the case the point
arises whether with the exclusion of the pronote the suit ought
to be thrown out or could proceed on the basis of the other
evidence on record. Sub-rule (1) of rule 2 of Order XXXVII of the
Civil Procedure Code, 1908 is as follows:--
(1) All suits upon bills of exchange, Hundies or promissory notes,
may, in case the plaintiff desires to proceed hereunder, be
instituted by presenting a plaint in the form prescribed; but the
summons shall be in Form No.4 in Appendix B or in such other
form as may be from time to time prescribed.
Its first three words all suits upon are very important. The said
words mean that a suit based on a pronote can be filed under
Order XXXVII, C.P.C. and can be dealt with thereunder. However,
the said rule does not say that it should be on a pronote which is
valid according to law or which has been executed according to
law or which is inadmissible in evidence according to law.
Similarly it does not say that the suit cannot proceed on any
other evidence apart from the concerned pronote. This would
mean that a suit on the basis of a pronote can be filed under the
said order and can be tried under the provisions thereof
irrespective of the fact whether the pronote is admissible in
evidence or not. However, if the suit is based only on the
pronote and not on any other evidence and the pronote is found
to be inadmissible the suit will obviously fail even if witnesses to
prove the said pronote have been produced. However, if in a
case where apart from a pronote which is inadmissible in
evidence there is independent or sufficient evidence to prove
the loan or debt the Court cannot throw out a case altogether.
The Court has to exclude the pronote from the evidence because
of its inadmissibility and has then to weigh the evidence to find
whether it can independently suffice to prove the case or not. A
perusal of the evidence will show that there was sufficient
evidence on record, apart from the pronote to prove the case of
the appellant. Therefore, the learned trial Court could not
dismiss the suit simply because the pronote was not admissible
in evidence. Honourable the Supreme Court has in a very recent
ruling entitled Sh. Abdul Majid v. Syed Akhtar Hussain Zaidi PLD
1988 SC 124 laid down that where a suit was not triable by resort
to the procedure prescribed in Order XXXVII, its trial could
proceed as an ordinary suit. In view of this law as well the suit
of the appellant could not be dismissed. As such the finding of
the learned trial Court on Issue No.1 is illegal and is reversed.
The issue, as a consequence, is decided in favour of the
appellant.
There is no decision of the learned trial Court on Issues Nos.2 and 3
relating to the merits of the case. However, as already stated
above, whole of the evidence of the parties has already been
recorded and is before us. In evidence of the parties has already
been recorded and is before us. In these circumstances it will be
in the interest of justice that we decide Issues Nos.2 and 3
ourselves instead of remanding the same and burdening the
parties with unnecessary expending apart from facing the
consequential delay. The learned counsel for the parties agree
that the issues may be disposed of now on the basis of the
evidence on record. Respondent No.1 while appearing as D.W.1
denied his signatures on all the documents. Therefore, it is to be
seen whether respondent No.1 obtained any loan and executed
the requisite documents or not. The appellant produced Mr.
Aftab Ahmed Khan, their Manager, as P.W.1 and Abdul Rahim
Khan Sumbal, P.W.2 an officer of their Bank, to prove the
statement of accounts of Exh.P.2, application for loan Exh.P.3,
receipt form Exh.P.4, acknowledgement of loan Exh.P.5 and
guarantee Form Exh.P.6. In fact, their statements are sufficient to
prove the said documents. However, it may be added that on the
application for loan Exh.P.3 apart from signatures of
respondents Nos.1 and 2 a duly attested photograph of
respondent No.1 is pasted. D.W.1 conceded that it was his
photograph, but he still avoided to admit the execution. Again,
respondent No.2 while appearing as D.W.3 supported the case of
the appellant and stated that the said documents were executed
by respondent No.1. Similarly he has stated that he asked
respondent No.1 to return the loan to the appellant and he
promised to do so if the interest was waived, but later did not
pay back anything. He does not seriously deny his signatures on
guarantee form Exh.P.6. Therefore, the documents Exhs.P.2 to P.6
read with the evidence of P.Ws.1 and 2 as also D.Ws.1 and 3, but
independent of the pronote, prove that respondent No.1
obtained the loan in dispute and respondent No.2 guaranteed
the payment back of the same. Accordingly, Issues Nos.2 and 3
are decided in favour of the appellant.
The suit as a result has to be decreed. However, it may be stated that
the suit was filed on the basis of a pronote which in itself was
inadmissible in evidence and the parties were, therefore,
dragged into a long litigation due to a legal defect in the same
which was due to the negligence of the appellant Bank. In these
circumstances the Bank can neither be allowed the costs of the
suit nor can it be allowed interest for the period up to the
passing of the decree. He, however, is being allowed interest
from the date of the passing of the decree because the same is
mandatory under section 34-B, C.P.C. Accordingly, the impugned
judgment and decree of the learned trial Court are set aside. A
decree of recovery of the learned trial Court interest at the rate
of 2% above the Bank rate from the date of this decree till
realization, is passed in favour of the appellant and against the
respondents. The parties shall bear their own costs throughout.
Following the precedent as laid down in the above quoted case
reported in 1994 MLD 271, the disputed cheque having been presented
after six months of its issue became stale , and the suit based on such
out of date stale cheque could not have been decreed by learned trial
Court; consequently, this civil appeal is hereby allowed, impugned
judgment and decree are hereby set aside; the suit is remanded to the
lower Court with a direction that the same be treated to have been
filed under the ordinary provisions of Civil Procedure Code and be
tried and decided accordingly.
Vide a short order dated 17-1-2005 the above appeal was allowed
and above are the reasons for the same.
H.B.T./K-53/K Case remanded.
