ABDUL RAUF GHAURI‑‑‑Petitioner
Mrs. KISHWAR SULTANA and 4 others‑‑‑Respondents
Civil Petition No. 244 of 1994, decided on 29th November, 1994.
(On appeal from the order of Lahore High Court, Rawalpindi Bench, dated 18‑5‑1994 passed in C.R. 255/94).
Present: Saiduzzaman Siddiqui and Mukhtar Ahmed Junejo, JJ
Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑OXXXVII, R. 3‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Suit for recovery of money in summary jurisdiction‑‑‑Defendant was allowed to appear and defend suit on furnishing of Bank guarantee equal to the amount claimed in the suit‑‑‑Petitioner’s revision against such order to the extent of Bank Guarantee remained unsuccessful‑‑‑Validity‑‑‑Trial Court as per terms of agreement between the parties was not justified in imposing condition of furnishing Bank Guarantee as a term for grant of leave to defend suit‑‑ Defendant was prepared to offer any solvent security to the satisfaction of Court equal to the amount of claim in suit‑‑‑Defence raised in application for grant of leave to defend would justify setting aside order of High Court and that of Trial Court to the extent it imposed condition of Bank Guarantee as a term for defending shit by defendant filed against him‑‑‑Order in question, as amended by Supreme Court to the extent that leave to defend suit would be deemed to have been granted to defendant on condition of furnishing any solvent security to the satisfaction of Trial Court in circumstances.
Sh. Zamir Hussain, Advocate Supreme Court with Ejaz Muhammad Khan, Advocate‑on‑Record for Petitioner.
Bashir Ahmed Ansari, Advocate Supreme Court with Ch. Akhtar Ali, Advocate‑on‑Record for Respondents.
Date of hearing: 29th November, 1994.
SAIDUZZAMAN SIDDIQUI, J.‑‑‑After hearing the learned counsel for the parties in the above petition, we converted it into appeal and it is disposed of as follows.
Respondent No. 1 (Mrs. Kishwar Sultana widow of Saeed Malik) in the above petition/appeal instituted a summary suit against the appellant under Order XXXVII, C.P.C. for recovery of a sum of Rs.19 lacs. The claim in the suit is based on a dishonored cheque issued by the appellant in favor of the predecessor‑in‑interest of the respondents. The appellant applied before the trial Court for leave to defend the suit which was granted on the condition of furnishing a bank guarantee equal to the sum claimed in the suit. The appellant feeling aggrieved by the condition imposed by the trial Court while granting leave to defend the suit challenged that part of the order of trial Court in a Civil Revision Application before the High Court which was dismissed by a learned Judge in Chambers by the impugned judgment giving rise to the present appeal.
The learned counsel for the appellant contended that in his application for grant of leave to defend the suit he has raised plausible defenses and triable issues and, therefore, he was entitled to the grant of unconditional leave to defend the suit. The learned counsel further contended that in any case even if the Court was of the view that the leave could not be granted unconditionally the condition in the circumstances of the case should have been only for furnishing security and not the bank‑guarantee, which almost amounted to the denial of leave to the appellant to defend the suit.
The learned counsel for the respondents, on the other hand, supported the judgment of High Court and contended that the claim of respondents in the suit was almost admitted by the appellant and, therefore, in the circumstances of the case no triable issues were before the Court so as to grant him leave unconditionally. With regard to the imposition of the condition on the appellant to furnish a bank guarantee, the learned counsel for the respondents contended that as the claim in the suit was not in dispute the learned trial Court as well as the learned Judge in Chambers rightly reached the conclusion that the condition imposed on the appellant to furnish a bank guarantee was justified. The principle for grant and refusal of leave to defend a suit was laid down by this Court in the case Fine Textile Mills Ltd., Karachi v. Haji Umar (PLD 1963 SC 163), as follows:‑
“In a suit of this nature where the defendant discloses upon his affidavits facts which may constitute a plausible defense or even show that there is some substantial question of fact or law which needs to be tried or investigated into, then he is entitled to leave to defend. What is more is that even if the defense set up be vague or unsatisfactory or there be a doubt as to its genuineness, leave should not be refused altogether but the defendant should be put on terms either to furnish security or to deposit the amount claimed in Court.
The principles upon which the provisions of Order XXXVII of the Code of Civil Procedure should be applied are not dissimilar to the principles which govern the exercise of the summary power of giving liberty to sign final judgment in a suit filed by a specially endorsed writ of summons under Order XIV of the Rules of the Supreme Court in England. One of such principles laid down by the Court of Appeal in the case of Kodak v. Alpha Film Corporation (1930) 2 KB 340 was that at the stage when to leave to defend is sought `the judge is not to try the action; he is to see that there is a bona fide allegation of a triable issue, which is not illusory; he need not be satisfied that the defense will succeed; it is enough that such a plausible defense is verified by affidavit’:’
The above principle laid down in the case of Fine Textile Mills, supra, has been consistently followed by this Court. In the case before us, the appellant in his application for leave to defend filed under Order XXXVII, Rule 2, C.P.C. had pleaded that he had agreed to pay a sum of Rs.24 lacs to the predecessor‑in‑interest of the respondents in accordance with the agreement entered into between him and the deceased on 22‑7‑1992. It was further alleged that he paid a sum of Rs.5 lacs and for the balance amount of Rs. 19 lacs, he issued a post‑dated cheque that was to be encashed on fulfillment of the conditions mentioned in the said agreement. It was further alleged that as the condition mentioned in the agreement dated 22‑7‑1992 was not complied with by the respondents’ predecessor‑in‑interest, they were not entitled to the encashment of the said cheque. In reply to the above allegation of the appellant, the respondents admitted the agreement dated 22‑7‑1992 but claimed that they were entitled to receive a sum of Rs.l9 lacs against the cheque which was dishonored on presentation. A copy of the agreement which is admitted by the parties has been placed before us during the course of hearing of this appeal. Paragraphs 1 to 4 of the said agreement read as follows:‑
“1. Flat on the first floor, Western side open on the front. This flat was sold by the first party to Mr. Raja Muhammad Zamurad Khan son of Hayat Muhammad of House No. 55, Street No. 33, Sector G/9‑1, Islamabad. The latter sold it to Mst. Saleem Akhtar daughter of Muhammad Hanif of Sector G‑7/3‑2, Islamabad on 7‑3‑1988. She, in turn, sold it to Mst. Kishwar Sultana w/o Said Malik 28/1), Satellite Town, Rawalpindi on 16‑5‑1988.
3. Flat on 2nd floor, corner, west side, facing Margalla was sold by the first party to Mrs. Salim Liang son of C.Y. Liang of House No. 33, Street 26, F/6‑2, Islamabad, who in turn sold it to (1) Khalid Mahmood Malik son of Malik Muhammad Khan of House No. 116, Street No. 72, G‑9/3 Islamabad and (2) Muhammad Khalid son of Rehmat Ali, House No. 35, Street 8, Islamabad who in turn sold this flat to Mst. Kishwar Sultana w/o Said Malik of 28/D, Satellite Town, Rawalpindi on 26‑3‑1988.
That the first party is entering this agreement with the second party as the purchaser of the abovementioned flat No. 2 and as representative of his wife Kishwar Sultana as the purchaser of flats Nos. 1 and 3 above.
Now both the parties agree as under:‑‑
(i) The first party has agreed to pay the second party a sum of Rupees Twenty Four Lacks against the abovementioned flats as under and the second party will have no claim against any of these flats:
(2) The first party will pay of Rupees two Lacks to the Second party on First August Nineteen hundred and ninety-two (i.e.1‑8‑1992).
(3) Rupees three Lacks on Sixteenth September Nineteen hundred and ninety-two (16‑9‑1992).
(4) The remaining balance of Rupees Nineteen Lacks will be paid within three months with a grace period of fifteen days.
If the first party fails to pay any installment, all previous payments will be confiscated by the second party and the ownership of the flats will be restored to the second party.
After receiving this payment of Rupees twenty-four Lacks the second party and his wife will have no claim against the first party and till full payment of this amount is made it will be considered as interest (sic) with the first party.”
After reading the above paragraphs of the agreement, which is admitted by the respondents, we are of the view that the trial Court was not justified in imposing the condition of furnishing a bank guarantee as a term for grant of leave to defend the suit. The learned counsel for the appellant stated before us that he was prepared to offer any solvent security to the satisfaction of the Court equal to the amount of claim in the suit. Keeping in view the defense raised in the application for grant of leave to defend and the law laid down by this Court in this regard in the case of Fine Textile Mills, (supra), we accept this appeal, set aside the order of the High Court and that of the trial court to the extent it imposed the condition of bank guarantee as a term for defending the suit by the appellant filed against him. The impugned order is amended to the extent that the leave to defend the suit will be deemed to have been granted to the appellant on the condition of furnishing any solvent security to the satisfaction of the Trial Court. The security will be furnished by the appellant within two months from today. In the circumstances of the case, there will be no order as to costs.
AA./A‑1244/S Appeal accepted.