P L D 1962 (W (PLP)

WAHIDUDDIN AHMED, J.‑This Letters Patent Appeal arises out of a suit brought by the plaintiff appellant to recover a sum of Rs. 10,C00 on the basis of an agreement dated the 6th of October 1947 executed in Meerut by Ziaul Haq, respondent No. 1, on the Original Side of this Court. The appellant's case is that there were business dealings between the firm of the respondents known as " Muhammad Noman Ziaul Haq " of Nagpur and Messrs Haji Gudar Hafiz Abdul Rahim, a firm carrying on business at Delhi of fruit commission agency before partition. The respondents' firm, during the course of the business dealings, received from Delhi firm a sum of Rs. 10,000 for the supply of orange fruit to them. The Delhi firm is alleged to be owned by one Muhammad Siddique, the father of the appellant in this case. The appellant's allegation is that his father transferred a sum of Rs. 10,000 due from the respondents' firm to him and respondent No. I on behalf of Messrs Muhammad Noman Ziaul Haq executed an agreement dated the 6th of October 1947 at Meerut in his favour and entered Into an agreement for the supply of orange fruit on the terms mentioned in the said document in consideration of the amount due from them to the Delhi firm. It is alleged that both respondents 1 and 2 are bound by this agreement and having failed to carry out their obligations under the said agreement are liable to pay the amount of Rs. 10,000 due to the appellant. The respondents resisted the suit and pleaded in defence that no amount was due from them to the Delhi firm and the alleged transfer of Rs. 10,000 to the appellant in any case was not a valid transfer. They further contended that without a valid transfer the alleged deed of acknowledgment is invalid and no claim could be based on it. Muhammad Noman, respondent No. 2, further pleaded that he had no business dealings with the Delhi firm and had nothing to do with t'‑e firm known as "Muhammad Noman Ziaul Haq." His case is that he was not the partner of the above‑mentioned firm. The respondents also raised objection about the admissibility of the agreement dated the 6th of October 1947 on the ground that it was not sufficiently stamped. On the pleading of the parties the following issues were struck on the original side of this Court:‑ (1) Was the defendant No. 2 a partner of the firm of Muhammad Noman Ziaul Haq ? (2) Did the defendants or any of them, receive the sum of Rs. 10,000 from the firm of M/s Haji Gudar Hafiz Abdul Rahim ? (3) Is the deed dated 6‑10‑1947 binding upon the defendant No. 2 ? (4) Is the alleged acknowledgment deed, dated 6‑10‑1947 properly stamped and admissible in evidence ? (5) (a) Did the firm of M/s. Haji Gudar Hafiz Abdul Rahim transfer their alleged claim of Rs. 10,000 to the plaintiff ? (b) If so, is the transfer valid ? (c) If so, with what effects ? (6) Was the deed, dated 6‑10‑1947 executed for consideration and is it not void ? (7) Is the plaintiff entitled to sue ? (8) Was the defendant No. I liable to supply fruit to the plaintiff ? If so, did the defendant No. 1 fail to discharge his obligations for supply of fruit ? (9) Is any of the defendants liable to pay Rs. 10,000 to the plaintiff ? (10) Is the defendant No. 2 entitled to special costs ? (11) To what relief, if any and against which of the defendants is the plaintiff entitled ? The question about the insufficiency of stamps was dealt with by our brother, Inamullah, J., by an order, dated the 10th of February 1954. He found the document in question as insufficiently stamped and impounded it for making up the deficiency. It is admitted by the learned counsel for the parties that the appellant has paid the deficiency of the stamp on the said document and there is no dispute between the parties on the question of insufficiency of stamps. The dispute between the parties on merits was disposed of by Inamullah, J., by judgment, dated the 30th of July 1956. The learned Judge on the Original Side, on the various issues raised before him, held that respondent No. 2 was the partner of the firm of Messrs Muhammad Noman Ziaul Haq. He also found that a sum of Rs. 10,000 was due to the Delhi firm from the above mentioned Nagpur firm and the agreement dated the 6th of October 1947 (Exh. 7) was binding on respon dent No. 2, if otherwise found valid, as respondent No. I entered into the said agreement on behalf of the Nagpur firm. But our brother has dismissed the suit of the appellant on the ground that the transfer of Rs. 10,000 by the Delhi firm to the appellant was hit by the provisions of section 130 of the Transfer of Property Act inasmuch as there was no written document in proof of such a transfer. The learned Judge on the Original Side rejected the contention of the appellant that the agreement (Exh. 7) was in the nature of novation of contract and that the appellant was entitled to sue on the basis of this document. The appellant has challenged the adverse finding against him in this Letters Patent Appeal. Mr. Riaz Ahmad, the learned counsel for the appellant, has attacked the finding of the learned Single Judge on the Original Side that the document (Exh. 7) was not a novatio of the con tract under section 62 of the Contract Act. He urged that Exh. 7 was a fresh contract between the appellant, respondents and the father of the appellant and there was a strong proof in support of his contention. He further urged that even if the transfer of Rs. 10,000 due from the respondents' firm is treated as an assignment of an actionable claim, the appellant is entitled to a decree in the amount claimed by him. Therefore, the sole question for consideration In this appeal is whether the document (Exh. 7) is in the nature of a novatio of contract and if not, whether the appellant Is entitled to succeed even if the transfer of Rs. 10,000 is treated as an assign ment of an actionable claim. The appellant, in support of his claim, only examined P. W. 1 Muhammad Siddique (Exh. 6) as witness in the case. This witness is the father of the appellant. He stated in his examination in Court that he was doing business at Delhi in the name of M/s. HajI Gudar Haji Abdul Rahim before coming to Pakistan. He further stated that the respondents were selling fruit on commission to his firm and used to purchase gardens of oranges near about Nagpur, and were carrying on business in partnership in the firm known as " Muhammad Noman Ziaul Haq." He produced document, dated the 6th of October 1947 and admitted his signature on it. He further stated that this document was signed by respondent No. 1 and two attesting witnesses. Later on he stated that there were business dealings with the appellant and his firm. During the course of business there was transfer of money between the appellant and his firm. He transferred Rs. 10,000 from his firm to the appellant. This transfer was mentioned in Exh.

7. He also stated that at the time of the execution of Exh. 7 the respondents owed more money than what is mentioned in Exh.

7. In support of his statement that Muhammad Noman was a partner of the firm known as " Muhammad Noman Ziaul Haq " he produced Exh. 8/1 a certificate of the Punjab National Bank Limited dated the 6th of September 1950 showing that his firm on the 2nd of July 1947 purchased a demand draft for Rs. 5,000 in favour of Muhammad Noman of Nagpur. He also produced Exh. 9, a railway indent application, and stated that it bears the signature of respondent No. 2 who wanted to supply fruit goods to his firm at Delhi under it. In cross- examination this witness stated that be was present when Exh. 7 was executed. He also admitted that he came to Karachi in September 1947, established his business and then went to Delhi. According to him he went twice to Delhi. He further stated in cross‑examination that he came to Karachi in the last week of September or first week of October 1947. He went to Delhi after four months of his arrival at Karachi. He denied the case of respondent No. I that he gave a blank stamp paper with his signature thereon. He stated that Ziaul Haq, respondent No. 1, came of his own accord to Meerut, and stayed with him and his son also stayed with him. The respondents in support of their defence only examined themselves as witnesses. D. W. I Muhammad Noman stated in his examination in Court that he was not a partner of Ziaul Haq in the firm of Muhammad Noman Ziaul Haq ; he had his own separate business and never received the amount of draft mentioned in Exh. 8 and denied his signature on the indent application (Exh. 9). He further stated that he owed no money to Haji Gudar Abdul Rahim. D. W. 2 Ziaul Haq, respondent No. 1, stated in his examination that Muhammad Noman was not his partner and be was the sole proprietor of the firm known as "Noman Ziaul Haq". He denied that he owed any money t4 Haji Gudar Abdul Rabim. He further stated that he did not take Rs. 10,000 from Haji Gudar Haji Abdul Rahim as alleged in the plaint. According to him Abdul Qayoom appellant came to him at Agra and took him to Meerut on a pleasure trip. At that time his father was not there. Both of them stayed with the appellant's uncle. He stated that be had signed Exh. 7 in blank in connection with a proposed partnership' business between him and the appellant. He further stated the document (Exh.7) was not written in his presence and the statement regarding Rs. 10,000 in it was false. He further stated that he did not agree to supply good to the appellant or return Rs. 10,000 as mentioned in Exh.

7. He stated that when he was leaving Meerut he had affixed his signature on Exh.

7. In cross‑examination he admitted that he never worked in partnership with the appellant and he never asked back the blank document that he had given to the appellant at Meerut. He further admitted that he had given no notice about the blank paper he had given to the appellant. As already stated, on the evidence referred to above, Inamullah, J. found that a sum of Rs. 10,000 was due to Messrs Haji Gudar Haji Abdul Rahim from the respondents in connection with fruit business dealings. He further found that Muhammad Noman was a partner o:' the firm known as "Noman Ziaul Iraq" and he was liable under the document (Exh. 7) if it was otherwise held to be valid. The learned counsel far the respondents has not challenged before us the finding of the learned Judge on the Original Side that a sum of Rs. 10,000 was due to the Delhi firm from Ziaul Haq, but Mr. Abdul Aziz, the learned counsel for respondent No. 2, has not supported the finding of the learned Judge on the Original Side about the liability of Muhammad Noman. We will deal with this question at the proper stage. In order to appreciate the view which weighed with the learned Judge on the Original Side in holding that the agree ment (Exh. 7) was not in the nature of novatio of contract and the transfer of Rs. 10,000 was merely an assignment of an actionable claim, the observations of Inamullah, J., are reproduced below " I have given a careful consideration to the contentions of both the learned Advocates, and I am clearly of the opinion that there was no novation of the contract that existed between Muhammad Siddique and Ziaul Haq. The very first requirement under section 62 of the Contract Act is that the parties to the contract must agree to substitute a new contract for the original contract. The question, therefore, arises whether Muhammad Siddique was a party to the document, Exh. 7, dated the 6th of October 1947. Mr. Riaz Ahmad contended that inasmuch as Muhammad Siddque has witnessed the document, Exh. 7, he would be deemed to be a party. There is no force in this contention. In order that Muhammad Siddique may be considered a party to the execution of Exh. 7, he must be presumed to have knowledge of the contents of that document. Their Lordships of the Privy Council, while considering the case of Pandu rang Krishnaji v. Markandaya Tukaram and others, reported in A I R 1922 P C 20, on the question whether a certain person who had witnessed a document was estopped from challenging the same, observed Before their Lordships consider the circumstances in which that attestation took place, they think it is desirable to emphasize once more that attestation of a deed by itself estops a man from denying nothing whatever excepting that he has witnessed the execution of the deed. It conveys, neither directly nor by implication any knowledge of the pompts of the document, and it ought not to be put forward alone for the purpose of establishing that a man consented to the transaction which the document effects. Muhammad Siddique, therefore, cannot be said to have any knowledge whatsoever of the contents of the document. It is true that Muhammad Siddique supports his son today, but it was open to him to have filed a suit for the recovery of the amount in question against Ziaul Haq if he so desired. It cannot, therefore, be said that the original contract, what ever it was between Muhammad Siddique and Ziaul Haq regarding the amount of Rs. 10,000 did not exist or the liability of Ziaul Haq for the same was discharged. Moreover, Muharmad Siddique himself as a witness for the plaintiff has not said a word if he knew the contents of the docu ment Exh. 7 at the time when he signed the same. I find on a careful examination of the document Exh. 7 in original that the signature of witnesses on this document, including that of Muhammad Siddique, the father of the plaintiff, have been obtained later on." Later on Inamullah, J. observed " I hold that the document Exh. 7 was not a novation of the contract under section 62 of the Contract Act as contended by Mr. Riaz, the learned Advocate for the plaintiff. In the absence of any document produced by the plaintiff in compliance with section 130 of the Transfer of Property Act, I hold that the suit is not maintainable." After hearing the learned counsel for the parties we are, however, of the opinion that the appellant has made out a good case against respondent No.

1. On the evidence led by the appellant either the transfer of Rs. 10,000 by the Delhi firm was an assignment of an actionable claim in his favour or there was a fresh agreement between the appellant, respondent No. 1 and the father of the appellant substituting the liability of respondent No. 1 in respect of the amount of Rs. 10,000 under the agreement (Exh. 7). It is not disputed before us that in case of valid assignment of the debt of Rs. 10,000 by the Delhi firm, respondent No. 1 will not be liable in law to pay this amount. It is only contended, as was contended before the learned Judge on the Original Side that section 130 of the Transfer of Property Act would be applicable to such a case and as there is no writing evidencing the transfer of the debt in favour of the appellant, he is not entitled to' maintain any suit on the basis of the alleged assignment. There can be no two opinions on this point if the provisions of section 130 of the Transfer of Property Act are held to be applicable to the facts of this case. Unfortunately it was not brought to the notice of the learned Single Judge on the Original Side that the provisions of section 130 of the Transfer of r Property Act were not applicable to Delhi at the material time. Had this fact been brought to the notice of Inamullah, l., he was bound to examine the further question involved to this appeal namely whether the transfer of the debt of Rs. 10,000 was effected in Delhi or at Meerut. Even otherwise it was a material question in this case to find out whether the transfer of the actionable claim was effected in Delhi or Meerut. The evidence led by the appellant clearly shows that at the time of the alleged transfer there was a book debt existing against respondent No. 1 P. W. 1 Muhammad Siddique in this connection stated as under " During the course of business there was transfer of money between the plaintiff and my firm. I transferred ten thousand rupees from my firm to the plaintiff. This transfer is mentioned in Exh.

7. At the time of the execution of Exh. 7 the defendants owed more money than what is mentioned in Exh 7." It is true that this witness has stated that this transfer is mentioned in Exh.

7. But it means nothing else but that this fact was written in this document. In reality the transfer in question must have been first effected In the account books of the Delhi firm and that is the relevant time which is to be taken into consideration for the purposes of determining whether there was a valid assignment of an actionable claim in favour of the appellant or not. In our opinion, on the evidence of P. W. 1 Muhammad Siddique, this book transfer is a perfectly valid transfer and could be the basis of a valid claim even if the Transfer of Property Act is held to be applicable. In Seetharama Ayyar and another v. Narayanaswami Pillai and another (A I R 1919 Mad. 1070) Abdur Rahim and Napier, JJ., held that an assign ment made in a statement of accounts by way of an entry is an assignment within section 1 30, Transfer of Property Act. But as observed above the Transfer of Property Act at the material time was not applicable to Delhi and an oral transfe of an actionable assignment could be the basis of a suit. Mr. Abdul Aziz, the learned counsel for the respondents, on this point has referred us to a Bench decision in the case of Firm Ram Kishen‑Mohan Lal v. Firm Gurdial Mal‑Sagar Mal (A I R 1941 Lah. 337) and on the authority of this decision urged that as the transferrer of the actionable claim is not a party to the suit the claim must be dismissed. In this decision their Lordships, of the Lahore High Court held that it is settled law that though the Transfer of Property Act is not, as a whole, applicable to the Punjab, its principles as distinct from its technicalities should be applied in the Punjab. Therefore section 130 can be invoked to justify the assignment of a debt as an actionable claim. They further held that a part of the assignment of a debt is valid in law and an action can be maintained thereon by the transferee provided he makes both the transferrer and any other transferee that may be concerned parties to the suit. In our opinion, the last mentioned observation is only to safe guard the interest of the debtor and cannot apply to the facts of the present case where the transferer namely Muhammad Siddique, the owner of Haji Gudar Haji Abdur Rahim, had appeared in the witness box and admitted the transfer in favour of the transferrer namely his son Abdul Qayoom. The object of this observation is only this that since the technicalities of the provisions of section 130 are not applicable to the Province of the Punjab, the interest 6 of the debtors should be properly safeguarded. In our opinion) this interest is sufficiently safeguarded in this case and the suit of the appellant was not liable to be dismissed simply on the ground that his father Muhammad Siddique though he appeared in the witness box, was not formally impleaded as a party to the suit. In these circumstances if the transfer of the debt of Rs. 10,000 is taken to be an actionable claim the appellant was bound to succeed. But on examination it appears to us that the transaction in question was not merely an assignment of an actionable claim. On the other hand it is a fresh‑contract substituting the old contract by introducing new business and is in the nature of novation of contract within the meaning of section 62 of the Contract Act. Both under the provisions of section 62 of the Contract Act and common law novation is brought about by introduction of new business or in the alternative between the same parries by introduction of new terms in the contract. In such cases what is necessary is that the new contract should not be consistent with the original debtor's liability in any form on the terms of the old contract. The right against the debtor on the original contract must be extinguished and there must be present substi tution of another contract for the original contract. These ingredients are sufficiently present In the case before us. The evidence led by the appellant shows that respondent No. 1 owed a debt to Muhammad Siddique the proprietor of Messrs Haji Gudar Haji Abdul Rahim, the Delhi firm. A fresh agree ment was entered into on the 6th of October 1947 under the document (Exh. 7) whereby respondent No. I acknowledged that a sum of Rs. 10,000 was due from him to the Delhi firm, which formed the consideration of the agreement entered into between him and the appellant. Therefore, in case this document is held to be a genuine document and the transac tion is also held to be a genuine transaction, ‑it cannot be D doubted that under the new agreement the liability of respondent No. 1 under the original contract was completely extinguished. The learned Single Judge's view is that although this agreement was executed by Ziaul Haq on the 6th of October 1947 at Meerut but Muhammad Siddique was not a party to it and he attested the document later on. According to the learned Judge, even if it is taken that Muhammad Siddique attested the document he cannot be fixed with the knowledge of the contents of the document and Exh. 7 cannot be held to be a novation of the contract within the meaning of section 62 of the Contract Act. We have given our best consideration to the view taken by our brother referred to above. In the present case both the parties have produced all the available evidence on the record. The real point is whether on the facts of this case the evidence of the appellant about the circumstances in which the document (Exh. 7) was executed should be accepted or not. Ziaul Haq respondent is not a truthful witness, even according to the finding of the learned Judge on the Original Side. He found that this respondent had set up a false case at the trial in alleging that his signature wag obtained op a blank paper in connection with a proposed partnership between him and the appellant. In these circumstances no weight can be attached to the statement of such a witness to come to the conclusion that Muhammad Siddique at the time when his signature was obtained on the document in dispute was not present at Meerut and could not possibly attest the document at that time. Thus this fact shall have to be decided on the appreciation of Muhammad Siddique's evidence in the light of the other important circumstances of the case. We have carefully considered the statement of P. W. 1 Muhammad Siddique, who appears to us to be a truthful witness. We see no reason to disbelieve his statement that the agreement (Exh. 7) was executed in his presence and he was a party to it. The Privy Council case referred by Inamullah, J. in this connection, with utmost respect, had no relevancy to the question under consideration before him. That case is relevant only to those cases where an attesting witness denies the knowledge of the contents of the document. If the attesting witness appears in the witness box and admits that he attested the document with full knowledge of its contents, such statement is of much evidentiary value and displaces the considerations which are otherwise raised in respect of such signatures. Mr. Abdul Aziz, the learned counsel for the respondents, contended before us that the statement of Muhammad Siddique shows that he came to Karachi in September 1947 and left Karachi after four months in connection with his business in India. But this is a distorted version of his statement. In examination‑in‑chief this witness made a positive statement that he came to Karachi in September and after establishing his business there he went to Delhi twice. In cross‑examination this witness did not say that he came to Karachi in September. On the other hand he stated that either he came in September or October 1947 and thereafter left for Delhi in connection with his business. Therefore on the state ment of this witness it cannot be held that he was not present in Meerut at the time when the document (Exh. 7) was executed. Another circumstance which our brother has not taken into consideration in weighing the evidence of Muhammad Siddique is that had Muhammad Siddique been not a party to the, document in question he would have himself filed the suit for the recovery of the debt due to him and would not have allowed his son to file the suit for the recovery of the claim in dispute against the respondents. There is no doubt in our mind that Muhammad Siddique was likely to succeed is such, a suit, There is thus no satisfactory explanation why Muhammad Siddique should forge his signature on the document in question, when he could otherwise succeed in establishing his claim. In view of this, simply because the attesting witness's signature appears in a different ink, we are not prepared to hold that Muhammad Siddique is a false P witness or that he later on affixed his signature on the docu ment in dispute. In our opinion Muhammad Siddique's statement that he was present at the time of the execution of the docu ment and was a party to the fresh agreement is not incompatible with the circumstances brought on the record. Accordingly we hold that document (Exh. 7) falls within the ambit of the provisions of section 62 of the Contract Act and the appellant was entitled to base his claim on it and his claim must succeed. Mr. Abdul Aziz in the alternative contended that there is no evidence that Muhammad Noman vas a party to the document (Exh. 7). We have carefully gone through the document (Exh. 7) and the various recitals made therein clearly show that Ziaul Haq did not enter into this agreement with Abdul Qayoom on behalf of the firm known as " Muhammad Noman Ziaul Iraq". On the other hand he executed this document on his own behatt and made himself liable only. Reference to the firm of Muhammad Noman Ziaul Haq in this document is only to this extent that respondent No. 1 had shown himself as its proprietor. In Cl. 9 of this agreement it is clearly stated that if the terms of the contract in question are not fulfilled or the amount of Rs. 10,000 is not returned to Abdul Qayoom, the appellant would be entitled to recover this amount only from him and from his property. It is therefore quite obvious to us that on the terms of Exh. 7 it cannot be held that Ziaul Haq entered into this document on behalf of Muhammad Noman. On this view of the matter Muhammad Noman, respondent No, 2, cannot be held liable In respect of the liabilities arising out of Exh.

7. The appellant's claim there fore, must fail against him. In the result the appeal is allowed against Ziaul Haq with costs. The appellant's claim is decreed with costs, but in the circumstances of the present case we would not allow any interest to him. K. B./A. H. Appeal accepted.