1984 PLP 852 (MLD)

O.XXXVII, r.2(2)--Appellant holder of promissory note filing suit for recovery of money against respondents vendees and sureties of promissory note--Respondents not filing application under O.XXXVII, r.3 for leave to appear and defend suit instead filing application under O.XX, r.11(2) praying for grant of instalments--Suit decreed against respondents accordingly--Contention that suit should have been decreed against sureties also and that interest as claimed should have been allowed, held, seems to be correct--None of respondents appearing and seeking leave to appear and defend suit decreed against all respondents with interest and costs as claimed in plaint. Mansoorul Arfin for Appellant. Nemo for Respondents. Date of hearing: 14th December, 1983. The appellant filed suit under Order XXXVII against the respondents for recovery of Rs.5,700.19. It was averred that the respondent No.1 is a partnership firm of which respondents Nos.2 and 3 are partners. On 30-4-1969 the appellant granted loan/overdraft of Rs.5,000 to respondent No.1 which was utilised by it through its partners viz. respondents No.2 and

3. As a security for the repayment of the loan or the balance which may be found payable by respondents Nos.1 to 3, the respondents Nos.4 and 5 jointly and severally executed a promissory note, dated 30-4-1969 for Rs.5,000 payable on demand to respondent No.1 or order with interest at 4% above bank rate with minimum 9% per annum with monthly rest. The respondent No.1 under the signature of its partner namely respondent No.2 duly endorsed the promissory note in favour of the appellant and delivered the same to it under a delivery letter, dated 13-4-1969. In response to the appellant's notice, dated 21-9-1970, the respondents 1 to 3 by a letter, dated 11-11-1970 acknowledged their liability and promised to pay the dues. As the respondents failed to pay, the appellant filed suit for recovery of Rs.5,707.19 against all the respondents. The respondents did not file application under Order XXXVII, rule 3 for leave to appear and defend the suit. Instead an application was filed by respondent No.2 as partner of respondent No.1 under Order XX, rule 11(12), C.P.C. praying for grant of instalments. The learned trial Court decreed the suit with costs against respondents Nos.1 to 3 and further ordered that the decretal amount be paid in instalments of Rs.500 per month payable on 10th of each calendar month and in case of default of any two consecutive instalments balance would be payable at once without notice. Suit against respondents Nos.4 and 5 was dismissed. The appellant was not granted interest. Mr. Arfin the learned counsel has contended that the suit should have been decreed against respondents Nos.4 and 5 also and further that the interest as claimed by the appellant should have been allowed. Both the contentions seem to be correct. The respondents Nos .4 and 5 were makers of the promissory notes which was endorsed by the payee i.e. the respondent No.1 in favour of the appellant. The endorsement appears on the back of the promissory note signed on behalf of the respondent No.1 by its partner and was delivered to the appellant. The appellant therefore, became holder of the promissory note having right to recover the amount from the maker. In the circumstances suit under Order XXXVII was maintainable against the respondents Nos.4 and

5. The respondent did not file any application under Order XXXVII, rule 3 and therefore, in terms of rule 2(2) in default of obtaining leave to appear and defend the suit the allegations in the plaint should have been deemed to be admitted and the appellant was entitled to a, decree for principal amount, interest and costs. In the present case none of the respondents had appeared and sought leave to appear and defend therefore, decree should have been passed against all the respondents with interest and costs which was claimed in the plaint. A decree for interest is permissible under Order XXXVII, rule 2(2), C.P.C. Mr.Arfin states that he has no objection if respondents Nos.1 to 3 are allowed instalments granted by the Court. In the result I allow the appeal and decree the suit for 145.5,707 with interest at the rate of 9% P.A. with monthly rest from the date of suit till payment and half of the cost. The respondents Nos.1 to 3 will be entitled to pay decretal amount in monthly instalments Rs.500. If they fail to pay two consecutive instalments the entire decretal amount or balance amount shall be payable immediately. Mr. Arfin Advocate states 'that if respondents have aid an amount the same shall be adjusted in 'the decretal amount. With this observation the appeal is allowed with 'order as to costs. M.A.K. Appeal allowed.