Order 37 decree set aside | The Lahore High Court overturned an ex-parte judgment against Muhammad Waseem, requiring a new trial with the Appellant to provide a surety bond, after finding that the original decision lacked proper consideration of evidence and opportunity for defense.

دعوی: جواب دہندہ نے اپیل کنندہ پر 70,000,000 روپے کی وصولی کا مقدمہ دائر کیا، جس میں دعویٰ کیا گیا کہ اپیل کنندہ نے بدعنوانی اور ڈشونر چیک کی وجہ سے رقم کی ادائیگی نہیں کی۔

جواب: اپیل کنندہ نے کہا کہ اسے مناسب موقع نہیں دیا گیا اور اکس پارٹے فیصلہ غیر قانونی ہے، مزید یہ کہ جواب دہندہ نے صحیح ثبوت فراہم نہیں کیے۔

فیصلہ: عدالت نے اپیل کو منظور کرتے ہوئے ایڈیشنل ڈسٹرکٹ جج کے اکس پارٹے فیصلے کو کالعدم قرار دے دیا اور مقدمے کا دوبارہ جائزہ لینے کی ہدایت دی۔

Form No: HCJD/C-121

ORDER SHEET

L A H O R E H I G H C O U R T ,

R A W A L P I N D I B E N C H R A W A L P I N D I

JUDICIAL DEPARTMENT

Regular First Appeal No.20 of 2024

Muhammad Waseem

V/S

Maple Leaf Cement Factory Limited

S.No.of order /

Proceedings

Date of order

/Proceedings

Order with signatures of Judge, and that of parties or

counsel, where necessary.

09.09.2024

Ms. Nosheen Nazeer Raja, Advocate for the

Appellant.

Mr. Irshad Hussain Wattoo, Advocate for

Respondent.

This regular first appeal under Section 96 of The

Code of Civil Procedure (V of 1908) (the “CPC”) is

directed against the judgment and decree dated 08.11.2023,

whereby the Additional District Judge, Mianwali decreed

the suit filed by the Respondent as ex-parte.

Brief facts of instant appeal are that the Respondent

instituted a suit for recovery of Rs.70,000,000/- in terms of

Order XXXVII of

the

“CPC”

against the

Appellant/defendant claiming therein that the Appellant

misappropriated an amount of Rs.79,617,591/- by

committing criminal breach of trust and in this respect, a

criminal case bearing F.I.R.No.100/22 u/s 406 PPC, P.S.

Daud Khel was registered. It was further claimed that an

amicable settlement was effected, pursuant thereto, the

Respondent wrote off an amount of Rs.9,617,591/-

however, for remaining amount the Appellant/defendant

issued a cheque No.77953245 dated 17.01.2023 for the

purposes of payment of remaining amount. The cheque,

R.F.A.No.20 of 2024

when presented in the concerned bank, the same was

dishonoured. The Appellant was proceeded against ex parte

on 30.05.2023. The learned trial court thereafter recorded

ex-parte evidence and consequently decreed the suit as such

vide judgment and decree dated 08.11.2023.

Learned counsel for the Appellant inter alia

submitted that the impugned judgment is not tenable under

the law; that the Appellant was not afforded proper

opportunity of hearing and ex-parte judgment is not tenable;

that despite ex-parte proceedings, the Respondent was

obliged to lead cogent and convincing evidence for proving

its claim; that evidence to this effect was deficient but the

Additional District Judge decreed the suit on extraneous

reasons.

Conversely, learned counsel the Respondent

defended the impugned judgment with hilt.

We have heard learned counsel for the parties and

also perused the record.

As the suit was in a summary character and it was

instituted while invoking the provisions of Order XXXVII

the “CPC”, so on receipt of the plaint, summons were

issued to the Appellant in the prescribed form. In pursuance

thereof, the Appellant put his appearance and filed

application for leave to defend the suit on 10.04.2023 which

was accepted vide order dated 06.05.2023 subject to his

furnishing surety bond backed by some immovable property

equal to the amount of cheque to the satisfaction of the

Court. Thereafter, the Appellant filed petition for review of

order dated 06.05.2023 that was dismissed vide order dated

20.05.2023 with direction to the Appellant to furnish

requisite surety bond otherwise his application for leave to

appear and defend the suit shall be deemed to be rejected.

On 30.05.2023, application for leave to defend was rejected

R.F.A.No.20 of 2024

due to non-submission of surety bond and case was fixed

for recording of ex parte evidence that was ultimately

decreed vide ex parte judgment and decree dated

08.11.2023.

Adverting to the merits of the case, it is observed that

suit was instituted on the basis of Exh.P1 (Company board

resolution, copy of F.I.R.No.100/2022 as Exh.P2 and copy

of Cheque as Exh.P3) purportedly issued by the Appellant,

which was dishonoured on presentation to the concerned

bank. The Respondent in order to prove the validity of the

cheque

produced Mehmood-ul-Hassan, Executive

Marketing Maple Leaf as PW1 and Muhammad Usman as

PW-2. It evinces from the record that the Appellant had

categorically denied the issuance of cheque (Exh.P3) in

favour of the Respondent however, for the purpose of

recording of evidence, leave to defend was conditionally

allowed vide order dated 06.05.2023. When confronted

whether there is any agreement between the parties to show

the relationship of the Appellant and the Respondent; in

response, learned counsel for the Appellant stated that

cheque was given through some agreement which is not on

the file of this case rather in another file of criminal

proceedings but the Respondent has not shown any

relationship before the Court. Chapter-II of the Negotiable

Instrument Act, 1881 deals with promissory note, bill of

exchange and cheques etc. Cheque is defined under Section

6 of the Act ibid which reads:

A “cheque” is a bill of exchange drawn on a

specified banker and not expressed to be

payable otherwise than on demand”.

Order XXXVII Rule 2 of the “CPC” envisages that a

suit can be instituted in a summary character on the basis of

bills of exchange, hundies or promissory notes. As the

R.F.A.No.20 of 2024

cheque is a negotiable instrument under the Negotiable

Instrument Act, 1881 and without negotiation of the parties

on an agreement, no such suit could be filed. When

confronted to counsel for the Respondent, whether he has

copy of agreement, he stated that he does not have such copy

however, the same will be produced before the trial Court if

an opportunity is provided. He further stated that the

Appellant was the employee of the Respondent who

misappropriated certain amount as a result whereof criminal

cases were registered against him during the proceedings of

which, he agreed to pay certain amount as per agreement

between the parties which shows the relationship for filing

of suit. We have examined the judgment and observed that

the Respondent has only exhibited three documents (Exh.P1

to Exh.P3), mentioned above. It has been held in a number

of cases that suit under Order XXXVII of the “CPC” has to

be filed alongwith supporting negotiable instruments of the

parties, instrument through a contract or through any

relationship, which must be express, implied or in written

form or oral. At this stage, learned counsel for the

Respondents requested some time to file the agreement

before the trial Court. It is settled law that for the purpose of

filing suit there has to be a relationship between the parties

as has been held by the Supreme Court of Pakistan in

“Mehr NOOR MUHAMMAD Versus NAZIR AHMED”

(PLD 2024 Supreme Court 45) wherein it has held that

“the plaintiff, in his cross-examination, admitted that he

had no business relationship with the defendant or family

ties with him. This statement causes eyebrows to be raised

as given a fillip to ponder how the plaintiff could lend a

considerable amount to a stranger”. In another

pronouncement cited in “TELENOR MICROFINANCE

BANK LIMITED Versus SHAMIM BANO and others”

R.F.A.No.20 of 2024

(2023 SCMR 1560) it has held that “where a person signs

an instrument otherwise than as a maker, drawer or

accepter, he incurs the liabilities of an indorser to a holder

in due course. However, if there is ambiguity as to the

capacity in which a party signed an instrument, the whole

facts and circumstances attendant upon the making, issue

and transfer of the instrument may be legitimately referred

to for the purpose of ascertaining the true relation of the

parties to each other; and reasonable inferences, derived

from these facts and circumstances are admitted to the effect

of qualifying, altering or even inverting the relative

liabilities which the law merchant would otherwise assign

to them”. Moreover, in “CHAND BAGH FOUNDATION

through Authorized Representative Versus STANDARD

CHARTERED BANK LIMTIED through Manager and

another” (PLD 2011 Lahore 473), it has held that “the

reasons given by the learned trial Court for dismissing the

suit of the appellant namely absence of relationship of

debtor and creditor and existence of a loan, are neither

sustainable nor in line with dicta of the Supreme Courts”.

When further confronted to counsel for the Appellant

whether the Appellant had submitted surety bond as

directed in aforesaid order, he stated that the Appellant

could not furnish surety bond due to his poor financial

position and incapacity at that time, however, he is now

ready to furnish surety bond.

In this view of the matter, without going into the other

merits of the case, we are inclined to allow this appeal

subject to furnishing of surety bond backed by some

immovable property to the extent of 50% of the amount of

cheque (Exh.P3) before the trial Court. The impugned

judgment and decree is therefore, set aside. Consequently,

petition for leave to defend stands accepted and trial Court

R.F.A.No.20 of 2024

shall decide the suit afresh after recording the evidence of

the parties, in accordance with law preferably within a

period of four months. The Respondent shall also file

certain documents before the trial Court through proper

application. The parties shall appear before the Court

concerned on 25.09.2024.

(Muhammad Sajid Mehmood Sethi)

JUDGE

(Jawad Hassan)

JUDGE

Approved for Reporting

JUDGE

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