1989 PLP 171 (MLD)

" the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend "

8. But the rigour of provision is softened by rule 3(1) which makes it obligatory on a Court to grant the leave when the conditions in this clause are found to exist. The clause reads as under:- "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." This is not all. The wide discretion available to the Court under rule 2(2) is governed by rule 3(1) as reproduced above. It is again enlarged but in another direction by rule 3(2) which reads as under:- "3.(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 it."

9. It is clear from above reference to the different provisions of Order XXXVII, C.P.C. that the leave to appeals may be given unconditionally or subject to such terms as to payment into Court, security etc as the Court deems fit. It is, therefore, clear that the imposition of conditions while granting leave to defend is in the discretion of Court. Now before proceeding any further, I would refer to case-law relied on behalf of the petitioners. I first take up the case of Santosh Kumar. The same is not relevant for the reason that it was a judgment in appeal while I am dealing with a revision. It is established law that both the jurisdictions are entirely, different and not co-extensive. The case of Imam Din lied by the learned counsel for the petitioner is clearly distinguishable because in that case the learned Single Judge in chamber held that the plaintiff to great extent has admitted the plea raised by the defendant, while it is not the case here. While in the case of Tayyab Sharif the Hon'ble Supreme Court has clearly held that imposition of conditions for leave to defend is matter of discretion and depends on the circumstances of the case. In this case too the plea of the defendant was that debt stands fully satisfied. The order of the High Court was not interfered. The relevant para reads as under:- "We are unable to agree. This was eminently a fit case for grant of leave and no just exception can be taken to the grant of leave to defend by the High Court. Whether conditions should have been imposed or not was in the discretion of the High Court and defended on the facts and circumstances of the case. The facts of this case if true raised the plea of the debt being fully satisfied. In this view of the matter the grant of unconditional leave cannot be said to be unjustified car unreasonable." Then comes the case of M/s. Bank of Oman Limited v. East Asia Trading Company. The learned Single Judge in this case granted leave subject to furnishing security as per consent of the parties. While in the case of Abid-ur-Rahman Khan it was clearly held that the party can be put to terms when defence is vague or unsatisfactory. The reliance in this case was placed <;n. the case of Fine Textile Mills Limited. The relevant part is reproduced hereinafter. Similarly, case of M/s. Chaudhry Textile Mills Limited is also distinguishable as the bank in that case departed from the arrangement between the parties and the goods sought to be delivered to the appellants were not in accordance with the import documents meaning thereby that the conduct of the bank was also required to be gone into. Now I take up the case of Fine Textile Mills. This in fact is are authoritative judgment on the point and is to be followed in preference to case of Santosh Kumar (AIR 1985 SC 321) not only because constitutionally I am bound to follow the view of our own Supreme Court but also because this judgment covers all aspects of the matter. Sheikh Muhammad Akram, Advocate for the petitioner in C.R.617/88 seems to be much impressed by the judgment in case of Santosh Kumar but there was nothing extraordinary and it has no application to the present case, as already pointed out, it was a case of appeal. On the other hand this judgment completely and comprehensively deals with the scope of Order XXXVII, C.P.C. It is clear from the fact that both the parties have referred to and relied on this judgment. Their Lordships of the Supreme Court have exhaustively dealt with the question as to when leave to appear and defend to be granted. The relevant para reads as under:- "In a suit of this nature where the defendant discloses upon his affidavits facts which may constitute a plausible defence or even show that there is some substantial question of fact or law which needs to be tried or investigated into, then he is entitled to leave to defend. What is more is that even if the defence set up be vague or unsatisfactory or there be a doubt as to its genuineness, leave should not be refused altogether but the defendant should be put on terms either to furnish security or to deposit the amount claimed in Court. The principles upon which the provisions or Order XXXVII of the Code of Civil Procedure should be applied are not dissimilar to the principles which govern the exercise of the summary power of giving liberty to sign final judgment in a suit filed by a specially endorsed writ of summons under Order XIV of the Rules of the Supreme Court in England. One of such principles laid down by the Court of Appeal in the case of Kodak v. Alpha Film Corporation was that at the stage when leave to defend is sought "the Judge is not to try the action; he is to see that there is a bona fide allegation of a triable issue, which is not illusory; he need not be satisfied that the defence will succeed: it is enough that such a plausible defence is verified by affidavit."

10. I need not refer to all cases referred to and relied by the learned counsel for the respondent No.

1. Suffice it is to refer to following three cases:- (i) The case of Sh. Abdul Majeed v. United Bank Ltd. (1984 SCMR 1434). The relevant portion reads as under:- "The imposition of condition is within the discretion of the trial Court and in the circumstance of the case we find no illegality in the exercise of that discretion. No case is made out for interference. The petition is accordingly dismissed." (ii) Thereafter, I will refer to this Court in the case of Khalid .laved & Company v. Javed Oil Industries (Registered) (1988 C L ( 53). The relevant portion reads as under:- "In similar cases reported as Hussain v. Rajab Ali (1981 C L C 1) and Crescent Factories Vegetables Ghee Mills and 5 others National Bank of Pakistan District, Courts Branch, Sahiwal and another (P L D 195 Lah. 150) it was adjudicated that such an interlocutory order passed under Order XXXVII, Rule 3(2), C.P.C. was not amenable to appeal or revision and such condition, if imposed, was within the jurisdiction of the Court and the revision against the exercise of discretion in such matters was not competent. Again in Sh. Abdul Majeed v. United Bank Ltd. (1984 SCMR 1434), it was held that the imposition of condition that the petitioner should deposit suit amount before the next date of hearing, was within the discretion of the trial Court and no illegality was found in the exercise of such discretion and no case was made out for interference. In the said precedent leave to appeal was refused." The petitioner assailed this order through petition for special leave to appeal in the Supreme Court. The petition waft dismissed. The judgment is reported as 1988 SCMR 391 and relevant portion reads as under:- "After hearing the learned counsel for the firm'-we can neither find any illegality in the order of the learned Additional District Judge nor any ground to interfere with the discretion exercised by him. Leave is therefore refused." (iii) The last case of which 1 would like to refer in this behalf is case of Hussain v. Rajab Ali (1981 CLC 1). The relevant portion reads as under:- "The other argument of the learned counsel is not correct. Once Court comes to the conclusion that the matter requires consideration, but the matter is not clear, the Court has the jurisdiction to make a conditional order. Haji Karim and another v. Zikar Abdullah. This is a matter within the discretion of the Court. The Court could make an order to deposit even Rs. 35,000 i.e. the entire money in suit. No revision is competent against the exercise of discretion. The petition is, therefore, without force for this reason too and is dismissed."

11. It is clear from the precedent cases that the matter of condition is a discretion and it will depend from case to case. The defendant is entitled to leave to appear and defend if he has good defence or raises substantial question of fact f or law or discloses facts which may be deemed to be sufficient to entitle him to leave to appear and defend. Conversely speaking if there is no defence in the real sense then leave is to be refused outrightly. But in the cases falling between the two ends or extremes the leave is to be granted subject to the conditions as warranted by the circumstances of each case. This way there can be following three situations:- Firstly, where the petitioner raises substantial question of law and fact and the claim is supported by plaint or other documents. The leave is to be granted in such situation normally without conditions; Secondly, where the defence is not clear and there is doubt as to the bona fides of the petitioner. In the wording of Supreme Court as employed in case of Fine Textile Mills when defence is vague, unsatisfactory or there is a doubt as to its genuineness. There will be variety of situations covering this clause as it will cover the whole gap between two ends and connect first and last category. In such cases leave has to be granted subject to conditions depending on the facts of each case; and Thirdly, when the defence sought to be set up is fake, without any material to support, and just bald allegation without any substance both on legal and factual planes. In that case the leave is to be refused.

12. Now I consider the merits of the defence disclosed by the petitioners in their application for leave to appear and defend. There is nothing in the plaint which supports in any manner the plea of the petitioners. The petitioners have failed to comply with the mandatory provisions as much as the applications moved by them were not supported by an affidavit as required under rule

3. I have gone through the applications of both the petitioners. They ha% e not touched the issue of cheques and their bouncing. Then there was clear acknowledgement, dated 10th of March; 1985. It is true that the petitioner in C.IZ.614/H8 moved a Constitutional petition for registration of case. It was admitted that there was partnership between the petitioners but it was dissolved. It is further admitted they did sign the acknowledgement but it was alleged that the acknowledgement was obtained under the Police pressure. This petition came up for the final hearing before my learned brother Muhammad Sharif, J. and was dismissed vide judgment dated 30-10-1985. The relevant portion of the judgment reads as under:- "As regards Anwar Ali son of Khushi Muhammad, respondent No. 2, he is a partner and companion of the petitioner. Both of them signed the document Annexure R/7." The petitioners did not dispute the document in any other forum any further. This fact also goes against them. I have gone through the acknowledgement dated 10-3-1985 and I am convinced that same was voluntary action of the petitioners because it also contained the reasons for failure to liquidate the liability. It is clearly stated that since the petitioners are not pulling well and shifted the liability to each other, therefore, they could not pay the amount and they undertook to settle their differences and make the payment.

13. The other major objection that the suit was not based on a negotiable instrument is prima facie misconceived. There is not one but there are three instruments namely promissory note and two cheques. No doubt the petitioners have challenged genuineness of promissory note but there is not a word of challenge to the two cheques. The same are prima facie issued from the cheque book issued to the firm of the petitioner. This coupled with the acknowledgement and above all the time for which the payment remained unpaid, fully justified the condition attached to the leave to appear and defend granted to the petitioners., The order is perfectly justified and legally sound. The learned trial Court rightly attached the condition of deposit and his view is fully supported by decision of the Hon'ble Supreme Court in the case of Fine Textile Mills. The discretion has been properly exercised. The petitioners have failed to make out a case for interference in revisional jurisdiction.

14. The result is that I dismiss these revision petitions with costs. Since the lime fixed by the trial Court for deposit of the amount has expired, therefore, I allow the petitioners to deposit the amount jointly upto 28th of February, 1989. A.A./M-1088/L Revisions dismissed.