Order 37 . order of leave to defend recalled on failed to comply with the condition of furnishing security
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| Leave to defend dismissed and appeal also dismissed on failed to deposits surty bond. |
In the case of Nafees Ahmad vs. Zia-ud-Din, the Lahore High Court heard a regular first appeal challenging a judgment and decree from 16.09.2023. The respondent filed a suit for the recovery of Rs. 16,000,000 based on several cheques issued by the appellant. The appellant failed to comply with the condition of furnishing security, leading to the recall of the leave granting order. The appellant argued that the recall was unjust, while the respondent claimed that the cheques were issued for consideration. The court found that the appellant had numerous opportunities to comply but failed to do so, leading to the dismissal of the appeal and affirming the judgment in favor of the respondent. The court also emphasized that acquittal or discharge from criminal cases does not absolve civil liability, and in this case, the cheques were deemed to have been issued for consideration, supporting the respondent's claim. Therefore, the appeal was dismissed with no order as to costs.
نفیس احمد بمقابلہ ضیاء الدین کیس میں، لاہور ہائی کورٹ نے 16.09.2023 سے ایک فیصلے اور حکم نامے کو چیلنج کرنے والی باقاعدہ پہلی اپیل کی سماعت کی۔ مدعا علیہ نے روپے کی وصولی کا دعویٰ دائر کیا۔ اپیل کنندہ کے جاری کردہ متعدد چیکوں کی بنیاد پر 16,000,000۔ اپیل کنندہ سیکیورٹی فراہم کرنے کی لیو ٹو ڈیفنڈ کا أرڈر ریکال کر لیا۔شرط کی تعمیل کرنے میں ناکام رہا، جس کی وجہ س ریکال گیا۔ اپیل کنندہ نے دلیل دی کہ ریکال ناانصافی ہے جبکہ مدعا علیہ نے دعویٰ کیا کہ چیک رقم کے لیے جاری کیے گئے تھے۔ عدالت نے پایا کہ اپیل کنندہ کے پاس تعمیل کرنے کے بے شمار مواقع تھے لیکن وہ ایسا کرنے میں ناکام رہا، جس کی وجہ سے اپیل کو خارج کر دیا گیا اور جواب دہندہ کے حق میں فیصلے کی توثیق کی۔ عدالت نے اس بات پر بھی زور دیا کہ فوجداری مقدمات سے بری یا بری ہونے سے سول ذمہ داری ختم نہیں ہوتی، اور اس معاملے میں، مدعا علیہ کے دعوے کی حمایت کرتے ہوئے، چیک کو رقم کے لیے جاری کیا گیا تھا۔ لہٰذا، اپیل کو اخراجات کے حوالے سے بغیر کسی حکم کے خارج کر دیا گیا۔
E LAHORE HIGH COURT, LAHORE
JUDICIAL DEPARTMENT
RFA No. 69211 of 2023
Nafees Ahmad
versus
Zia-ud-Din
JUDGMENT
Date of hearing
27.03.2024
Appellant by
Mr. Sultan Ali Dogar and Mr. Ali
Raza Hanjra, learned Advocates.
Respondent by
Mian Imran Mushtaq, learned
Advocate.
SULTAN TANVIR AHMAD, J:–Through this
regular first appeal, filed under section 96 of the Code of
Civil Procedure, 1908 (the ‘Code’), judgment and decree dated
16.09.2023 passed by learned Additional District Judge,
Lahore has been challenged.
2.
On 02.12.2020 the respondent instituted suit, under
Order XXXVII of the Code, for recovery of Rs. 16,000,000/-
on the basis of (i) cheque No. 1561725584 dated 25.09.2019 for
an amount of Rs. 2,000,000/-, (ii) cheque No. 00000017 dated
09.07.2020 for an amount of Rs. 4,500,000/-, (iii) cheque No.
00000018 dated 09.07.2020 for an amount of Rs. 3,500,000/-,
(iv) cheque No. 00000019 dated 09.07.2020 for an amount of
Rs. 3,500,000/- and (v) cheque No. 00000020 dated 29.07.2020
for an amount of Rs. 2,500,000/- (the ‘cheques’). The appellant
upon receiving summons appeared before the Court and
RFA No. 69211 of 2023 (Judgment)
2
instituted leave application to defend the case, which was
granted vide order dated 22.06.2022 subject to furnishing
security / surety bond equal to the suit amount. Afterwards, the
appellant remained unable to comply with the condition and as
a result thereof leave granting order was recalled on 25.10.2022
by the learned trial Court. On 16.09.2023 judgment and decree
was passed in favour of the respondent, which is assailed
through the present appeal.
3.
Mr. Sultan Ali Dogar, learned counsel for the
appellant has argued that vide order dated 25.10.2022 the
learned trial Court has wrongly recalled the leave granting order
that has resulted into one sided judgment and precluding the
appellant from presenting any defense. Learned counsel stated
that sufficient opportunities should have been granted by the
learned trial Court before recalling the order of granting the
leave. Learned counsel has further argued that on the basis of
the cheques criminal cases were registered but no conviction of
the appellant could be secured, which is evident of the fact that
the cheques were only given as security and they are not backed
up by any consideration.
4.
Conversely, Mian Imran Mushtaq, learned counsel
for the respondent, has argued that the cheques were issued for
consideration as claimed in the suit and no mistake has been
made by the learned trial Court while passing the impugned
judgment and decree. Learned counsel has submitted that the
appellant availed six opportunities to submit the surety bond and
then deliberately and with the view to cause the delay in the
proceedings, kept avoiding to comply with the order to file
surety, resulting into recalling of the leave granting order; that
the appellant built up his case on the basis of order dated
22.06.2022, which was never challenged by him rather by his
conduct he has accepted the order, as initially the appellant kep
RFA No. 69211 of 2023 (Judgment)
3
on making requests before the learned trial Court for granting
him further time to file surety and then permitting to crossexamine the witnesses of the appellant instead of raising any
challenge to order of recalling leave; that the appellant is fully
aware that order dated 22.06.2022 is passed in accordance with
law and now the excuse is being made to cause further delay.
Learned counsel has relied upon the cases titled “Col. (Retd.)
Ashfaq Ahmed and others v. Sh. Muhammad Wasim” (1999
SCMR 2832) and “Haji Ali Khan & Company, Abbottabad and
8 others v. M/s. Allied Bank of Pakistan Limited, Abbottabad”
(PLD 1995 SC 362).
5.
Heard. Record perused.
6.
Order XXXVII Rule 2 (2) of the Code contemplates
that when the summons in the specified form are received, the
defender of a suit of summary procedure is required to obtain
leave to appear and defend; and, in default of his obtaining such
leave or of his appearance and defense in pursuance thereof, the
allegations in the plaint are deemed to be admitted, and the
plaintiff is entitled to a decree.
7.
Order XXXVII Rule 3 (2) of the Code authorizes
the learned trial Court to grant leave unconditionally or subject
to such terms as to payment in the Court or giving security.
Granting leave subject to condition or unconditionally is the
discretion of the Court which is to be justly exercised while
keeping in view the plausibility of the defense. It is not the case
of the appellant that the discretion was exercised in arbitrary
manners or the condition imposed was harsh or it operated
vexatiously to the appellant. The basic argument of the learned
counsel for the appellant remained that by recalling the leave
granting order on 25.10.2022 the appellant was wrongly ousted
to produce his defense and the learned trial Court acted in haste
while recalling the leave granting order.
RFA No. 69211 of 2023 (Judgment)
4
8.
Order sheet of the learned trial Court reflects that
after the grant of leave subject to above mentioned condition the
learned counsel for appellant on 05.09.2022 requested for some
time to file surety bond when appellant was given last
opportunity. Thereafter, on 20.09.2022 once again same request
was made when absolute and final opportunity was granted. The
case was fixed for 01.10.2022. On this hearing the appellant was
himself present in the Court and he gave undertaking with
respect to submission of surety. The relevant part of this order
reads as follows: -
“…Record perused. PLA was
decided vide order dated
22.06.2022 and till then defendant
has availed four opportunities.
However, today the defendant
present in person and gives
undertaking. Put up on 15.10.2022
for submission of surety bond…”
The above continued until 25.10.2022 when learned
Court clearly observed that the surety should be filed before
closing hours of the Court but the appellant failed, apparently
leaving the learned trial Court with no other option but to recall
the order dated 22.06.2022 and to observe that as a consequence
of the same leave to appear and defend the suit is deemed to be
dismissed. The above conduct of the appellant is sufficient
indication of the fact that the appellant accepted the condition
and then caused undue delay of about four months just to avoid
expeditious decision in suit.
9.
Order dated 25.10.2022 of the learned trial Court
essentially means that the appellant had no leave to appear and
defend the case in terms of Order XXXVII Rule 2 (2) of the
Code. In case titled “Muhammad Ramzan and others v. Ghulam
Qadir” (2011 SCMR 659) the Supreme Court of Pakistan
observed that when a defendant of such suits fails to fulfill the
RFA No. 69211 of 2023 (Judgment)
5
condition of the leave granted to him, the allegation in plaint
would be deemed to be admitted and the suit can be decreed
against him. The relevant part reads as follows: -
“..The petitioners failed to fulfill the
conditions on which leave to defend the suits were
granted to them. Perusal of the sub-para (2) of
rule 2 of Order XXXVII reveals that in default of
obtaining leave to defend or to appear in his
defence the allegation in the plaint would be
deemed to be admitted and the suit could be
decreed against the defendants. We would like to
reproduce the observations of this Court, on the
point, made in the judgment titled of Haji Ali Khan
and Company, Abbottabad and 8 others v. Messrs
Allied Bank of Pakistan Limited, Abbottabad (PLD
1995 Supreme Court 362):-
“10. The ratio decidendi of the abovereferred cases seems to be that if a
defendant fails to appear or fails to obtain
leave to defend in response to a summons
served in form No.4 provided in Appendix B
to the C.P.C. or fails to fulfil the condition
on which leave was granted or where the
Court refuses to grant leave, the Court is to
pass a decree. It may further be observed
that in sub-rule (2) of rule 2, C.P.C., it has
been provided that if a defendant fails to
appear or defaults in obtaining leave, the
allegations in the plaint shall be deemed to
be admitted and the plaintiff shall be entitled
to a decree, but no such consequences are
provided for in rule 3 of the above Order in a
case where the Court refuses to grant leave
or the defendant fails, to fulfil the condition
on which leave, was granted. In our view,
notwithstanding the above omission in Rule
3, the effect of refusal of the Court to grant
leave or failure on the part of the defendant
to comply with the condition of the leave,
will be the same i.e. the defendant shall not
be entitled to defend the suit on any ground
and the Court would pass a decree in favour
of the plaintiff. However, this does not
necessarily mean that the Court is not
required to apply its mind to the facts and the
documents before it. Every Court is required
RFA No. 69211 of 2023 (Judgment)
6
to apply its mind before passing any order or
judgment notwithstanding the factum that no
person has appeared before it to oppose such
an order or that the person who wanted to
oppose was not allowed to oppose because
he failed to fulfil the requirements of law.”
(Emphasis supplied)
10.
In case titled “Murtaza Haseeb Textile Mills v.
Sitara Chemical Industries” (2004 SCMR 882), the Supreme
Court found that since the failure of the defendant of the suit to
comply with the order of the learned Court with respect to the
condition of the leave was contemptuous and the same was a
tactic to cause delay, the decree is rightly passed on the basis of
material available on record. Almost same view was adopted in
the case reported as “Abdullah v. Shaukat” (2001 SCMR 60). In
“Col. (Retd.) Ashfaq Ahmed and others case (supra), the failure
to fulfill conditions, specified in conditional order granting leave
to defend, was found fatal when the defendant remained unable
to furnish any plausible reason. After hearing the arguments and
careful perusal of the law, I am of the opinion that the leave
granting order was rightly recalled which has result that the
appellant had no leave to appear and defend his case in terms of
Order XXXVII Rule 2 (2) of the Code.
11.
So far as the contentions of the learned counsel for
the appellant regarding discharge of the appellant from the
criminal cases registered under section 489-F of Pakistan Penal
Code, 1860 are concerned, suffice to say that both the criminal
as well as civil cases have different standards of proof and
acquittal or discharge from criminal case does not absolve a
litigant from the civil liability, if burden is discharged by the
other side as per the settled principles of civil standard of proof.
12.
The respondent has brought on record the cheques
as Exh.P-1 to Exh.P-5 and the dishonored slips were produced
as Exh.P-1/1 to Exh.P-5/1. Exh.P-1/1 reflects that one cheque
RFA No. 69211 of 2023 (Judgment)
7
was returned due to insufficient fund in drawer’s account. Same
is reflected from Exh.P-2/1 and Exh.P-4/1 for the other two
cheques. Exh.P-3/1 shows that on 08.10.2019 the relevant
account of the appellant was dormant. The respondent and his
witnesses appeared and supported the plaint. There is nothing
available to rebut the presumption that the cheques were issued
for consideration as well as the other presumptions arising under
the Negotiable Instruments Act, 1881, therefore, the learned trial
Court has correctly decreed the suit.
13.
For what has been discussed above, the present
appeal, having no merits, is dismissed. No order as to costs.
(SULTAN TANVIR AHMAD)
JUDGE
Approved for reporting
Announced in open Court on 17.04.2024.
Judge
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