2005 PLP 3361 (YLR)

MUHAMMAD RAZA KHAN, J.

A suit under Order XXXVII, C.P.C. was filed by Iftikhar Ahmad, Director Utman Ghee Industries, Gadoon Amazai, Tehsil and District Swabi in the Court of District Judge, D.I. Khan against Bahar Hussain, resident of D.I. Khan for the recovery of Rs.7,28,538 on the basis of promissory note executed on 16-5-2000. In the plaint, it was stated that the said amount was received by Bahar Hussain defendant (predecessor of the appellants) as loan in cash and a promissory note was, executed. The defendant, after getting leave to defend vide order, dated 12-3-2001, submitted a written statement consisting of 9 preliminary objections and detailed reply to all the paragraphs of the plaint. It was stated therein that not a single penny has been received in cash, rather there was a business transaction between Utman Ghee Mills and the firm of the father and uncle of the defendant, and that a sum of Rs.3,50,000 was due from the said firm. The firm was of the view that the security already deposited with the Mills will be sufficient to discharge the claim through the .process of rendition of accounts.

2. It is interesting to note that on the written' statement, as many as ten issues were framed and in most of them, the onus to prove was laced on the plaintiff/ respondent. This, practice has defeated the purpose of laying special procedure for the summary disposal of suits based on Negotiable Instruments, and it had also negated the spirit of the concept of leave to defend. The law requires that leave to defend be given for a specific ground for A which the burden of proof has to be placed on the defendant.

3. The plaintiff accordingly produced four witnesses i.e. the petition writer who had scribed the promissory note, the plaintiff himself, one Sultan Ahmad (marginal witness of the said promissory note) and the special attorney for the plaintiff (who was also a marginal witness of the promissory note). Excepting the scribe (P.W.1), all the rest unanimously stated that the sum of Rs.7,28,538 was demanded by, the defendant and exactly the same amount was paid by the plaintiff to the defendant for which the said instrument was executed. The suggestions with regard to the fact that the said amount was outstanding against the defendant, were totally denied as incorrect. The defendant produced an Assistant Accountant of the Ghee Mills and a son of the defendant as witnesses and closed the evidence. The learned Additional District Judge-I, D.I. Khan, vide a detailed judgment, dated 12-5-2003, decreed the suit as prayed for. This appeal has been filed by the legal heirs of the defendant Bahar Hussain to challenge the said judgment and decree.

4. Arguments heard and record scrutinized.

5. Before discussing the merits of the case, it shall be appropriate if the procedure in such-like cases is highlighted. Order XXXVII, C.P.C. lays down a summary procedure for the adjudication of suits based on negotiable instruments. A special form contained at serial No.4 of Appendix B, C.P.C. provides for the issue of summons. The defendant is required to appear within ten days with an application for leave to defend. The Court has the discretion to allow the application for leave to defend or to reject the same for valid reasons. If the application is rejected, the decree is passed which is executable forthwith. If the application is not rejected, the Court has the option to allow the application either conditionally or unconditionally. Where the defendant gives convincing grounds for defence, the leave could be granted unconditionally. In other cases, the leave is granted conditionally either on deposit of the amount of negotiable instrument in cash or on furnishing security bond. There are precedents that partly the amount can be deposited in cash and partly the surety bond can be furnished. Keeping in view the presumptions and estoppels contained in sections 118 to 122 of the Negotiable Instruments Act, 1881, normally the claim of the plaintiff is presumed to be correct and in that case, the onus lies on the defendant to prove the allegations raised by him. If he succeeds in discharging the onus so placed, the onus is shifted to the plaintiff to produce evidence in rebuttal. Thereafter the case is decided and in case of decree, it is executable forthwith.

6. In this particular case, the application for leave to defend was allowed but the written statement was obtained in a generalized manner because the order of granting leave to defend did not shortlist the specific ground on which the evidence had to be led. Moreover, the plaintiff was not required to produce evidence had the onus been rightly placed on the person raising a plea in defence. This has resulted in several adjournments and delay in disposal of case. The suit was filed on 13-12-2000 and with 32 adjournments, it was finalized on 12-5-2003 whereas the application for leave to defend was allowed on 12-3-2001. The period of 1-1 /2 years consumed in the disposal of the matter does not justify that summary procedure was ever adopted in the matter and thereby the title of Order XXXVII, C.P.C. was defeated.

7. In this case the learned counsel for the defendants/petitioners had strongly argued that the promissory note was without consideration and that it was the responsibility of the plaintiff/respondent to have proved the transfer of cash from the plaintiff to the defendants in the presence of the witnesses. Unfortunately there is a misconception which has gone to the root of our practice that it is always considered to be the responsibility of the plaintiff alone to prove the consideration and if he fails to comply therewith, he is to be non-suited. Such a strict condition of transfer of cash might be true in the cases where money lenders used to lend money on usury but under the Negotiable Instruments Act, the transfer of cash is not at all the requirement of law but in view of the said misconception, the Petition Writers also follow the same practice of stating the amount having been paid in cash and thereafter the holder of the instrument is compelled to prove that cash transaction was made as a consideration for the instrument. The Negotiable Instruments Act does not recognize any such formality. The acknowledgement of a debt can be a valid consideration or the commitment to pay specific amount for the service rendered can constitute a valid instrument. Therefore, the spirit of negotiable instrument is that (sic) all not be obliged to prove the form and mode of (sic) it will be presumed to be true under section (sic) Act. However, if the defendant contests a negotiable instrument on the basis of its being without consideration, he is required to prove the same.

8. Thus, the promissory note placed on file as Exh.D.W.131, witnessing the commitment of the maker to pay specific amount of Rs.7,28,538 to the bearer on demand, was sufficient to constitute a valid instrument. However, in view of the said misconceptions, as discussed hereinabove, the plaintiff was misled and he appeared in the witness-box to state that cash amount was paid to the defendant. His two witnesses also repeated the same words. However, it was illogical to believe that the amount, being Rs.7,28,538 only, should be paid as a loan. Such type of loans are normally given in round figures. . The specific amount, other than in round figures, indicated that the amount related to a business transaction and that is why a suggestion was put in the cross-examination of P.W.3 who once denied as incorrect that sum of Rs.7,28,538 was outstanding against the defendant in connection with the Ghee business but in the next sentence, he admits it to be correct that an amount of Rs.7,28,538 regarding Ghee is outstanding in their Khata. While feeling the conflict, he immediately corrected himself and volunteered that the said amount which was in connection with the Ghee business was brought to the plaintiff but at the same time, he made request that the same be given to him on loan which was given and a promissory note was executed. This improvement is in direct conflict with the statement of P.W.2 and P.W.4 as well as with his own statement in the examination -in-chief. However, the Assistant Accountant of Utman Ghee Industry, Gadoon Amazai while appearing as D.W.1 brought the accounts book for the year, 1998-99 and the Khata in the name of Haji Fida Hussain and Haji Bahar Hussain was produced in evidence (extract Exh. D. W. 1 / 1 and Exh. D.W.1/2) which indicates that on 26-4-1999, the outstanding amount against Haji Fida Hussain and Bahar Hussain was Rs.7,91,780 whereas final outstanding amount as on 14-3-2000, was Rs.7,28,

538. Therefore, the promissory note executed two months thereafter i.e. on 16-5-2000 for the same amount of Rs.7,28,538 was practically an acknowledgement of debt and not the cash transaction.

9. Had the plaintiff taken a stand that this promissory note was the acknowledged the said outstanding amount, the decree a should have been justified but since the oral statements of P.W.2 and P.W.4 are in conflict with the documentary evidence i.e. Exh. D. W.1/1, therefore, the decree on the basis of promissory note was not justified.

10. In fact the said amount was due against the firm of Fida Hussain and Bahar Hussain and as alleged by the petitioner/ defendant that there was also an amount of security deposited with the Ghee Mills and that the liability of Haji Fida Hussain cannot be recovered from Bahar Hussain (i.e. the defendant and predecessor of the petitioner), therefore, it will be a fit case for rendition of accounts against the firm and the partners thereof. A recovery suit simpliciter under Order XXXVII, C.P.C. shall not be competent in the circumstances stated hereinabove.

11. In view of the above discussion, this appeal is accepted, the impugned judgment and decree is set aside and the suit of the plaintiff/respondent is dismissed. He may seek his remedy through a suit for rendition of accounts against those from whom the amount on the basis of business transaction is due after adjusting the amount of security, if any. H.B.T./513/P Appeal accepted.