2022 PLP 779 (CLD)

SULTAN TANVIR AHMAD, J.

This present Regular First Appeal has been filed against the Judgment and Decree dated 16.03.2017 passed by the learned Additional District Judge, Kabirwala, District Khanewal in Civil Suit No. 01/ADJ of 2016, filed under Order XXXVII of Civil Procedure Code, 1908.

2. Facts, necessary for the disposal of the present case, are that on 07.07.2008 the respondent filed suit for recovery of Rs.1,440,000/- on the basis of promissory note dated 15.11.2007. Per contents of the plaint an amount of Rs.1,440,000/- was borrowed by the appellant from the respondent, against which promissory note and receipt was signed and issued by the appellant, in presence of Muhammad Javaid and Talib Hussain. Purportedly, instead of returning the amount, the appellant started adopting delaying tactics and ultimately refused to return the same. Suit was contested by the Appellant and execution of the promissory note was totally denied. On 08.04.2016 leave was granted and the following issues were framed by the learned trial Court:-

1. Whether the defendant executed Pronote in dispute in favour of plaintiff for lawful consideration as alleged in the plaint and as such, the plaintiff is entitled to get decree for recovery of Rs.14,00,000/- from the defendant? OPP

2. Whether the plaintiff has got no cause of action to file this suit? OPD

3. Whether the plaintiff is estopped by his word and conduct to file the suit? OPD

4. Whether the suit is liable to be dismissed in view of the preliminary objection No. 4 of the written statement? OPD

5. Whether the plaintiff has filed this suit only to harass the defendant and the defendant is entitled to recover compensatory costs from the plaintiff under section 35-A of C.P.C.? OPD

6. Relief.

3. Parties led their respective evidence. The respondent appeared in the witness box as PW-1. Talib Hussain and Javaid Iqbal appeared as PW-2 and PW-3, respectively. One Nazar Muhammad scribe of the receipt and promissory note also appeared as PW-4. Promissory note was brought on record as Exh-P1 and receipt of the corresponding amount was brought on record as Exh-P

2. The appellant appeared as DW-1 to support of his stance and produced Muhammad Pehlwan as DW-2.

4. On 16.03.2017 learned trial Court gave issue-wise findings and reached to the following conclusion:- "the suit filed by the plaintiff is liable to be decreed and the same is hereby decreed accordingly in favour of the plaintiff and against the defendant as prayed for along with costs of litigation.". Aggrieved from the same, the present Regular First Appeal has been filed.

5. Mr. Tariq Mehmood Dogar, learned counsel for the Appellant has submitted that upon signatures by the witnesses (PW2 and PW3), promissory note stood converted into the surety bond, therefore lost its knack of negotiable instrument and in this regard judgment of this Court in case titled "Abdul Rauf v. Farooq Ahmed and another" (PLD 2007 Lahore 114) has been relied upon. It is further contended that learned trial Court has ignored the litigation pending between Muhammad Nawaz, father of the Appellant and the Respondent which was also brought on record as Exh. D2 and in view of the litigation, it is not possible that parties having bitter relationship can enter into the transaction involving mutual trust. Learned counsel has also pointed out some discrepancies in the evidence including the difference of time of lending money on 15.11.2007 as well as raised the question that normally the people do not have such a huge amount at the houses.

6. Mr. Muhammad Zafar Khan Sial, learned counsel for the Respondent on the other hand, has opposed the contentions raised by the learned counsel for the Appellant and submitted that Appellant is the maternal uncle of the respondent and on account of close relationship, the money was lent and no direct litigation ever remained pending between Appellant and Respondent. He further argued that promissory note, in question, qualify all the requirements given in law and mere attestation by witnesses is not sufficient to oust this instrument out of the scope of the promissory note.

7. I have heard the arguments and perused the record with the able assistance of the learned counsel of the parties.

8. Learned counsel for appellant has argued that upon signatures by the marginal witnesses (PWs 2 and 3), the promissory note stood converted into a Bond and summary proceedings under Order XXXVII of the Code of Civil Procedure, 1908 are not attracted to the case. In this regard learned counsel has relied upon definition of the Bond given in section 2(5) of the Stamp Act, 1899 (the "Stamp Act"), which is as under:- Section 2(5) "Bond" includes

(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be; (b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and (c) Any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another."

9. Plain reading of the above suggests that Bond, includes (i) instruments whereby obligation is undertaken on certain condition and in case of failure of the condition, the maker of the bond is released from the obligation; (ii) an instrument which is attested by witness whereby one undertakes to pay a person in whose favour it is issued; and (iii) an attested instrument by way of which one undertakes to deliver grains or agriculture produce to another. The bond is not payable to bearer or to order of certain person. Mostly, bonds with condition defeasance can be adopted to cover any transaction, which are widely used as contractual instrument and it also contains characteristic of confirmation of debt. The Honourable Supreme Court of Pakistan in case titled "Commissioner Inland Revenue (Zone-I) LTU, Karachi v. Messrs Linde Pak Ltd., Karachi" (2020 SCMR 333) has observed, regarding the characteristics of bond, as follows:- "

6. Thus a 'bond' has been described by Black's Law Dictionary 10th Edn., as a "document containing confession of a debt", as a "written promise to pay money", or to do some act if certain circumstances occur, or a certain time elapse. With reference to case law it is stated that there is no distinction between bonds and 'certificate of indebtedness' which conforms to all the characteristics of bonds. The word 'certificate' has been defined by Chamber's English Dictionary, as a written declaration, official or formal of some fact and the term' Debenture' whose origin lies in the latin word debenture, meaning, ' there are due', has been described by Black's Law Dictionary 10th Edn., as an instrument acknowledging a debt secured only by a general credit and financial reputation of the corporate issuer, not by a lien on corporate assets. Whereas the term 'security' has been defined there as a collateral, given or pledged to guarantee the fulfilment of an obligation esp, the assurance that a credit will be repaid (usu, with interest) any money or credit extended to a debtor". (Emphasis supplied)

10. Promissory Note is not defined in the Stamp Act and for the purposes of definition and explanation of promissory note the Stamp Act is dependent on the Negotiable Instruments Act, 1881 (NIA, 1881). Section 2(22) of the Stamp Act specifically provides that promissory note means as defined in NIA, 1881. Before considering definition or details as to the promissory note it is appropriate to look into the preamble of NIA, 1881, which is as follows:- "Whereas it is expedient to define and amend the law relating to promissory notes, bills of exchange and cheques; it is hereby enacted as follows .."

11. Negotiable Instruments Act, 1881 is special law for the mentioned instruments having overriding effect over the general laws including the Contract Act as well as the Stamp Act. Its preamble amply elucidates that NIA, 1881 is not just enacted as amending statute but also to define cheques, bill of exchange and promissory notes. It is intended to lay whole law regarding the aforesaid instruments and the definitions of the instruments contained therein, carrying no ambiguity, are exhaustive in nature, leaving hardly any room to overstretch, spruce, narrow-down or borrow further words or explanation, besides contained in therein. This approach is further clarified from reading of section 13(1) of NIA, 1881 which starts with word 'means' instead of word 'include'. In this regard, reliance can be placed on case titled "Dossabhai Hirchand v. Virchand Dalchharam and another" (AIR 1919 Bombay 73) whereby following has been observed:- It has, in the first place, to be observed that the Act, according to the preamble, was passed not merely to amend the law but to define it in respect of cheques, bills of exchange and promissory notes. It was, therefore prima facie intended to lay down the whole law regarding those three classes of negotiable instruments. (Emphasis supplied)

12. Having concluded that the definitions of the instruments in NIA, 1881 are exhaustive in nature and whole law regarding these classes of instruments are contained in NIA, 1881, I regress to promissory note and the relevant provisions, which are as follows: "4. "Promissory note" A "Promissory Note" is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay [on demand or at a fixed or determinable future time] a certain sum of money only to, or to the order of, a certain person, or the bearer of the instrument." 13. "Negotiable instrument." (1) A "negotiable instrument" means a promissory note, bill of exchange or cheque payable either to order or to bearer. Explanation (i). A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable. Explanation (ii). A promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank. Explanation (iii). Where a promissory note, bill of exchange or cheque, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option]. (Emphasis supplied)

13. Unlike bond, Promissory note is an unconditional note/written promise, signed by the maker, to pay absolutely and in any eventuality, a certain sum either to or to the order of certain persons or the bearer of the instrument. Perusal of section 4 above reflects that promissory note is an instrument having following ingredients: (i) Must be in writing, and (ii) contains undertaking of payment of money, and (iii) undertaking must be unconditional, and (iv) sum should be determined, and (v) such instrument must be signed by the maker.

14. The instrument when fulfils the aforesaid criteria and ingredients is a promissory note. Sections 4 and 13 of NIA, 1881 do not provide for any requirement of attestation by witnesses or attestation if made by witnesses having some consequences and bearing on the nature of the instrument. Not necessitating attestation by witness on the promissory note simply has effect that requirement of Article 17(2)(a) of the Qanun-e-Shahadat Order, 1984, is not mandatory to be fulfilled. It does not mean that if attestation is made, it automatically stands converted into a Bond, which by its own nature and characteristics and purpose is distinct from promissory note. The characteristics of bonds include being conditional, not payable to order or to bearer etc.

15. I am fortified in my aforesaid view by the law laid down by the Honourable Supreme Court of Pakistan in the judgment dated 05-06-2014 passed in Civil Appeal 1784 of 2009 titled "Muhammad Ashraf v. Muhammad Boota", wherein it has been held:- "The above quoted provision reveals that a promissory note is an instrument in writing if it contains an unconditional undertaking, signed by the maker, to pay on demand or at a fixed or determinable future time, a certain sum of money either to, or to the order of a certain person or the bearer of the instrument. The instrument in question contains all these conditions. It, however, bears attestation of witnesses but it neither robs it of its nature as to promissory note nor changes any of its conditions nor even the intentions of the parties. It thus cannot be treated as bond by any stretch of interpretation. For the word bond as defined in section 2(5)(b) of the Stamp Act means and includes any instrument attested by witnesses and not payable to order or bearer whereby a person obliges himself to pay money to another. When we confronted the learned ASC for the respondent whether the instrument contains an unconditional undertaking to pay on demand of at a fixed or determinable future time, as certain sum of money either to the order of a certain person or the bearer of the instrument, he answered in the affirmative. When so the mere fact that it bears attestation of witnesses would not make it a bond." (Emphasis supplied)

16. I further agree with Mr. Zafer Khan Sial, learned counsel for respondent that as per the explanations of section 13 of Negotiable Instruments Act, 1881 the intention of parties can also be seen as to whether the instrument is intended to be a negotiable instrument or it is just a certificate of debt or contains merely an obligation to pay or to do something upon happening or not happening of certain event.

17. The contents of the instrument in question/Exb.P1 are as under:-

18. The above reproduced contents of the instrument contains undertaking of the appellant to pay on demand Rs.14,40,000/ -, which is not subject to any condition and it is payable to Respondent or to the order of or to bearer and meets all the other aforesaid requirements as well as the criteria given by Honorable Supreme Court is case titled "Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam" (2014 SCMR 1562) of promissory note.

19. Respondent when appeared as PW-1, has given evidence in the line of his plaint and exhibited promissory note Exh.P1 and receipt as Exh.P

2. PW-2 Javaid Iqbal and PW-3 Talib Hussain, have fully supported the stance adopted by the PW-1 and also deposed that the thumb impression was given on the promissory note, by the Appellant, in their presence. PW-4 is the scribe of the promissory note who confirmed that he has filed the promissory note. The lengthy cross-examination of the aforesaid witnesses took place but besides minor discrepancies, nothing important could haul out. Learned counsel for the appellant while relying upon Exh.D2 argued that the parties had sour relation in view of the litigation and it is highly unlikely for the respondent to lend the amount to the appellant. However, it is noticed Exh.D2 does not involve direct litigation between the appellant and the respondent, who even otherwise, are very close relatives.

20. Appellant appeared as DW-1 in the witness box and denied the consideration, execution and thumb impression as follows:-

21. However, when the question was asked if he is ready and willing for the expert evidence for comparison of his thumb impression, he denied from availing such option and further deposed that he has already transferred his entire agricultural land to his grandchildren due to the fear of Respondent. The following part of the cross-examination in this regard is important:-

22. Likewise, DW-2 though deposed in his examination-in-chief that amount of Rs. 1,440,000/- was never obtained by the appellant but could not give any explanation as to how he gained such knowledge and also simply kept answering every question put to him during the cross-examination as incorrect.

23. Negotiable instruments, beside others, also attract the presumption contained in section 118(g) of NIA, 1881" which is as follows:- "Section

118. Presumptions as to negotiable instruments. Until the contrary is proved, the following presumptions shall be made: (a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred, for consideration; (b) XXXX (c) XXXX (d) XXXX (e) XXXX (f) XXXX (g) that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. (Emphasis supplied)

24. The aforementioned section clearly provides that until contrary is proved it is to be presumed that the holder of the instrument is a holder in due course and the same is drawn for consideration. Once the instrument is exhibited and brought on record as well as evidence is led in the support thereof, the forgery or fraud with respect to the instrument or want of consideration or challenge that holder is not holder in due course is on the person who is challenging the holder's rights. The appellant in the present case, to make out his defense, though adopted the stance that this negotiable instrument/promissory note is forged one but he never reported such incident to the authorities or taken any step to initiate criminal proceedings against the respondent despite lapse of several years. No effort is made to get instrument cancelled on the civil side, either. If he never gave his thumb impressions on the promissory note then he should not have been reluctant to opt for the expert evidence despite clear question during the cross-examination and offer made by the rival party, in the Court. The following observation of the Honourable Supreme Court of Pakistan in case titled "Najaf Iqbal v. Shazad Rafique" (2020 SCMR 1621) is imperative, is this regard:- "

The reliance of learned counsel for the respondent on "Rohitbai Jivanlal Patel v. State of Gujarat and another" (AIR 2019 Supreme Court 1876) and "Uttam Ram v. Devninder Singh Hudan and another" (2019 (10) SCC 287) supports the version of the learned counsel for the plaintiff-respondent that the presumption was to be rebutted by the appellant and further that when the ground for dishonor of a cheque was "insufficiency of funds" and "stopped payment", there can be no presumption that cheque was not having signatures of the appellant. The defendant was having a choice to produce the Handwriting Expert when he disputed his signatures upon the cheque in dispute after the statement of PW-2 the Bank Manager. He opted not to produce him. This fact goes against him in the light of "Abdul Rasheed v. Fazal Ali Shah" (2016 SCMR 2163). (Emphasis supplied)

25. The appellant miserably failed to discharge even the initial burden to rebut the presumptions attached to the negotiable instrument. On the other hand, the Respondent has proved his stance through documentary as well as oral evidence including the evidence of PW-4 who is totally an independent witness. There is no merit in this Regular First Appeal, which is dismissed and the Judgment and Decree dated 16.03.2017 is concurred. No order as to costs. ZH/K-6/L Appeal dismissed.