2000 PLP 913 (CLC)

This revision petition impugns an order, dated 4‑2‑2000 passed by Syed Iqtidar‑ul‑Hassan Shah, learned Additional District Judge, Vehari, who in a suit under Order XXXVII, Rules 1 and 2 of the Civil Procedure Code which had been filed on the basis of a pronote, allowed the petitioner to defend the suit provided he furnished a bank guarantee of Rs.15,00,000 i.e. equal to the amount which was said to be recovered through the suit.

2. It has been said in the revision petition and during the course of arguments that the requirement of bank guarantee made the order harsh for the defendant who had a good case otherwise. The petitioner/defendant before the trial Court admitted having received the amount of Rs.15 lac from the plaintiff and also admitted having executed the pronote in his favour but stated before the trial Court that he refunded the amount in three instalments, the detail of which he provided to the trial Court. However, he did not attach any receipt against the payment of any instalment and this fact finds mention in the text of the judgment itself. However, his application was aliowed subject to the condition of furnishing the bank guarantee until 25‑2‑2000, failing which the application was to be deemed having been dismissed.

3. Along with his application for leave to defend, the defendant also attach an affidavit. One also finds a reply to the application filed on behalf of the plaintiff where an objection has been taken with respect to the text of the affidavit and it had been said that the affidavit furnished by the petitioner was a sham and not effective in accordance with law. 4., Whereas Order XXXVII was intended to foster justice and to avoid ex parte judgments as far as possible. Its object and spirit provides a' mechanism for a speed efficacious and summary remedy for recovery of A money in respect of suits which are filed on the basis of promissory notes, bill of exchange, cheques, Hundis. 5.Rule 3 of Order XXXVII lays the procedure for grant of leave to defend to a defendant. It reads as follows:‑‑ "Defendant showing defence on merits to have leave to annear.‑‑ (1) The Court shall, .upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application. (2) Leave to defend may be given unconditionally or subject to such. terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit. (3) The provisions of section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to application under sub‑Rule (1)." '

6. Thus, it appears that the defendant has no right to defend the suit without the grant of a leave by the Court. This is a discretionary relief but the discretion has to be exercised judicially. This discretion is exercised on the basis of affidavits which may sufficiently support the appliciation and once a leave is granted, it may be unconditional or subject to terms like security etc. which the Court may think fit.

7. The test of allowing a defendant the leave to defend a suit, would not be on the basis that the defendant will ultimately succeed. It would be enough to give his case an arguable look and the grounds raised by him are in the shape of a plausible defence so as to displace reputable presumption attached to documents, on account of which this more efficacious remedy is sought. Reference in this connection may be made to the case of Messrs Chaudhry Textile Mills and others v. United Bank Limited 1987 CLC 1957 (Lahore),

8. In an Indian case reported as AIR 1965 Mad. 218, it was held:‑‑ "Where, in a suit on the basis of a promissory note on an application with an affidavit by defendant for leave to defend, it was not alleged by the plaintiff in his counter‑affidavit that the defendant was not man of means and that he would not succeed in the suit, and besides it could not be stated at that stage of the suit that the defence was frivolous or that it was made for the purpose of procrastinating a decision in the suit, the defendant should not be put on terms and leave to defend rhust be granted unconditionally. "

9. The essence of such suits is that the plaints. should disclose an open. and shut case for the plaintiff to prove and for the defendant to defend. InIL this connection, reference may be made to the case of Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Messrs Nagina Cotton Industries Ginning, Pressing and Oil Mills and 6 others 1993 CLC 2217 (Karachi). A Court will not go into the truth or the falsity of the defence. It has only to examine the defences and objections in the application. Reference may bell made to the case of National Bank of Pakistan v. Messrs Elegzender & Company and 2 others PLD' 1987 Lah. 290, and also to the case of Messrs National Security Insurance Company Ltd. and others v. Messrs Hoechst Pakistan Ltd. and others 1.992 SCMR

718. Where the defence is said to be E illustory, leave may be refused and the suit decreed. Reference may be made to the cases of Banque Indosuez v. Jet Travels Ltd. and 4 others 1991 CLC 446 (Karachi), Allied Bank of PakIStan 'v. Messrs Faiz Ahmad Manzoor Ahmad and others 'PLD 1985 Lah. 188, Hamidullah Khan v. Muhammad Nawaz Qasuri PLD 1982 Lah. 203 and to the case of Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163.

10. Where a Court finds that the claim of the plaintiff was prima facie frivolous or untenable, or where substantial questions of law and facts arise E or where triable issues are raised or where there is a question of limitation, a leave has to be granted unconditionally. Reference in this connection may be made to the case of Al‑Qaim Traders v. Habib Bank Ltd. 1989 CLC 1633 (Lahore). Where the Court thinks ‑that the defence is not bona fide, conditional leave may be given after considering the pleadings; affidavits and other material. Reference may be made to the case of Muhammad Arif, v. Abdul Qayyum 1991 CLC

442. For ascertaining this fact, this Court may even record some evidence. Reference may be made to the case of Messrs Ark.Industrial Management Ltd. v. Messrs Habib Bank Ltd. PLD 1991 SC

976. Where a payment having been made, is the defence, leave may be granted subject to the defendant furnishing security for cost. Reference may be made to the case of K.M. Yousaf v. Muhammad Ahmad Sheikh 1986 CLC 950.

11. A Court has not to pass an order arbitrarily or exercise its discretion without studying the affidavit or the application which it supports. A Court I has to satisfy its conscience that there were plausible reasons for allowing leave defend conditionally or unconditionally.

12. It appears that the provisions of Order XXXVII and the spirit behind the law and its requirement. are now appreciated only superfluously with the result that the purpose for which this alternate procedure was provided with the desire of providing efficacious remedy in case of certain instrument is being defeated and the cases are prolonged on this account. In this ' connection, one notice infirmities in the orders of the trial Courts, the petitions for leave to defend and the affidavits attached with these petitions pursuant to the requirement of Rule 3.

13. This Court has seen the affidavit which has been attached by the defendant/petitioner seeking leave to appeal and this is one proof of what has been said in the above paragraph. A perusal of the affidavit reflects that a proper defence has not been taken. The learned counsel for the respondent has also assailed the affidavit not only before the trial Court but also here.

14. This Court also finds that the affidavit was not in accordance with the High Court's Rules Vol.IV, Part B, Chap. 12‑B, Rules 8, 9, 12, 14 and 15 nor it satisfies the requirement set by Rule 3 of Order XXXVII, in fact it K says nothing about the payment having been made as stated by the petitioner/defendant in his application.

15. If we, follow the authority in the case of Bashir Ahmad v. Abdul Waheed PLD 1995 Lah. 98, this affidavit is of no value.

16. But there is no counter‑revision before this Court. The Court below has already exercised its discretion m allowing the leave to defend on the basis of this affidavit without applying its mind to its contents. This Court is, therefore, only confining itself to the relief which has been sought by the defendant asking that he may be allowed to furnish security in the shape of a personal bond supported by the documents of his valuable property.

17. While granting leave to the defendant, the Court below had abruptly ended the order by saying that he may furnish a bank guarantee. This was done without passing a speaking order as to why furnishing of bank guarantee was being ordered instead of other security which was easily procurable. It, therefore, seems that this much of the condition was without judicial basis.‑.

18. While relying on the cases of Muhammad Nasir v. Muhammad Alam 1992 CLC 1705 Abdul Karim Jaffarani v. United Bank Ltd. and 2 others 1984 SCMR 568, Haji Abdul Wahid v. Hoechst Pakistan Ltd. and another AIR 1965 Mad. 218, this Court feels that the requirement of furnishing of bank guarantee without reasons, imposed harshness to the order L of the leave to defend. This Court, therefore, feels that the order impugned should be cured to that extent and while exercising its visitorial jurisdiction, this Court substitute the words "furnishing of reliable security for the amount involved" instead of the words "furnishing of the bank guarantee" and allows the revision petition. The case is sent back to the learned trial Court for proceedings further in the matter. However, since a defective affidavit had been filed by the petitioner, it would be in the fitness of thing to direct the petitioner to submit an additional affidavit in accordance with the observations made hereinabove immediately before the trial Court, failing which it will be deemed that there is no affidavit and, therefore, no petition for leave to defend.

19. A copy of this order be sent to the learned trial Court through the learned District Judge, Vehari, who is directed to make as many copies as may be needed for distribution amongst the other Judicial Officers in the District so that they carefully follow the dictates of Order XXXVII of the Civil Procedure Code. The trial Court shall summon the parties during the month of March, 2000, and try to dispose of this case within 3 months in accordance with the spirit of Order XXXVII. Q.M.H./M.A.K./A‑31/L Order accordingly.