1989 PLP 1834 (SCMR)

We are sorry that as per our previous letter dated April 5, 1983, we could not make payment by 30th June, 1983, due to some recovery problems. Thanking you, Yours faithfully, for SARGROH SERVICES LIMITED. Sd/‑ (ASIF SHARIF):" In contesting this the petitioners took up the plea as hereunder:‑ "That Asif Sharif named as defendant No.2 in the title suit is neither managing director of the defendant Co. Sargroh Services Ltd. nor has any concern whatsoever with it, which has its registered office at 72/P, Model Town, Lahore and no service of summons in the title suit has at all been effected." The District Judge by his Order, dated 20th/23rd of March, 1986 disposed of the matter as hereunder:‑ "On the perusal of the file at the time of arguments, it has been found that the affidavit is attached with the application for leave to defend the suit and, therefore, the objection in that respect is not tenable.

6. During the arguments, the learned counsel for the defendant has produced copy of Form NO.XII with respect to the particulars of the Directors etc. maintained under the Companies Act, 1913, relating to Sargroh Services Ltd: showing that Asif Sharif is not included as one of the Directors. It has also been denied that the defendant Company has any dealing for the purchase of goods in suit from the plaintiff. All these pleas raise controversial point as to whether the defendant Company is not liable to pay the amount in suit to the plaintiff and for that reason defendant No.1 may be allowed to defend the suit. As the plaintiff has attached copies of the Invoices and dishonoured cheques purporting to have been issued by Asif Sharif on behalf of the defendant Company, the defendant Company is not held entitled to be permitted to defend the suit unconditionally. I, therefore, accept the application for leave to appear and to defend the suit submitted by defendant No.l subject to condition that defendant No.l will submit security bond in the amount in suit. Defendant No. 1 is directed to submit security bond and the written statement on 3‑4‑1986."

3. Against this order of the District Judge a Revision Petition was filed by the respondent before the learned High Court. The learned Judge in the High Court allowed the petition and the following operative order was substituted:‑ "The result is that the application of respondent No.1 for leave to appear and defend is allowed subject to its furnishing Bank Guarantee in the sum of Rs.5,00,000 (Rs. 5 lacs only) and for the remaining amount to furnishing of a security bond in the sum of Rs.10,00,000 (Rs.10 lacs only), The bond to be furnished by one of the present Directors of respondent No.l. The parties are directed to appear before the trial Court on 15‑6‑1989, and the bond and Bank Guarantee to be furnished before the said date. The trial Court shall decide the suit positively by 30‑9‑1989, even if it has to conduct day to day proceedings."

4. Mian Tariq Mehmood, Advocate, the learned counsel for the petitioners has contended that the loan or the unpaid amount related to the purchases made by Mr. Asif Sharif prior even to the formation of the company for which the petitioner Company was in no manner responsible. It has also been contended that the modification in the order has made it so onerous for the petitioners to defend the proceedings that they cannot possibly defend it.

5. While examining the order passed by the District Judge and its compliance, the High Court observed as hereunder:‑ "The defendant did not comply with this order inasmuch as it proceeded to furnish a surety bond by one Muhammad Saleem. This cannot be treated as security bond by the defendant No.1 Moreover, there is neither description of the property of said Muhammad Saleem, the surety, nor its valuation nor it is clear whether this property already suffers from any charges or not." As regards the other defects noticed, the following note was made by the High Court:‑‑ "I have confronted the learned counsel for the respondents with these points and asked them to explain the following defects of the bond, firstly, that how it can be treated as a bond by defendant No.1, secondly, what is the description of the property of the surety; thirdly, what is the value of the property, subject‑ matter of surety bond. The learned counsel for the respondent No.1 rightly and straightaway offered to furnish fresh bond strictly in accordance with the instructions of trial Court. I am informed that defendant No.1 does not own any immovable property. The learned counsel stated that for the satisfaction of the plaintiff, the security bond shall be submitted by one of its present Directors. The learned counsel for the petitioner has pointed out that by this time the amount has swelled almost to Rs. 15,00,000 (Rs.15 lacs), therefore, the respondent No.1 be directed to deposit this amount in the Court." After considering these aspects of the case the impugned order was passed.

6. At this stage of the proceedings, the merits of the case cannot be gone into. The fact that Mr. Asif Sharif was the Promotor Director of the Company, and that he acknowledged the liability as of 7th September, 1983 on behalf of the petitioners, is not denied. In the circumstances, the order passed by the High A Court permitting the defence in terms reproduced above does not call for any interference, at this intermediary stage by this Court. Leave to appeal is, therefore, refused. M.A.K./S‑418/S Leave refused