2001 PLP 1065 (CLC)

3. The plaint in the suits filed by the respondent proceeded on the ground that he was employed by Mansoor Textile Mills Limited i.e. respondent No. l as Director (Technical and Commercial) and that he had been performing multifarious duties in his capacity as such but the appellant did not pay his remuneration and according to the respondent, the appellant owed him various amounts which he initially avoided to pay but on 30th December, 1982 he agreed to pay the same through instalments and some of the amounts of instalments paid through bank drafts or even by cheques were received by the said respondent but the last of such instalment which was paid through cheques could not be received by the respondent for the cheques were not encashed by the bank and were bounced with the observation "referred to drawer". In these circumstances, the respondent filed 4 suits for recovery against the appellants. The suits afore‑noted were originally filed against Syed Jamat Ali Shah describing him as Director of Mansoor Textile Mills Ltd. but vide order, dated 30‑10‑1986 Mansoor Textile Mills Limited, Shorkot City was impleaded as party.

4. The appellant No.2 as originally arrayed, had applied for leave to appear and defend the suit and on the passage of the abovesaid order of impleadment whereby Mansoor Textile Mills was impleaded the copy of the plaint was offered to the learned counsel for Syed Jamat Ali Shah, who declined to accept the same on the ground that Mansocr Textile Mills being a limited concern has independent entity of its own, therefore, it be summoned through the process of the Court. It appears from the record that no order for issuance of the summons was ever issued by the learned Additional District Judge and the two counsel appearing on behalf of the appellant No. l and respondent did not press for the same any further.

5. The learned Additional District Judge proceeded with the case, heard the arguments and awarded decrees in favour of the respondent.

6. The abovesaid decrees have been challenged in the present appeals.

7. It was mainly argued by the learned counsel for the appellants that Mansoor Textile Mills having been impleaded, who had a distinct and independent entity of its own besides being a juristic person, summons were required to be issued and mere offering of the copy of amended plaint to the learned counsel for the existing appellants would not take the case any step further unless service of Mansoor Textile Mills had been effected. It was submitted that the total proceedings in the case were taken behind the back of appellant No. l who was never issued any summons, therefore, the same are coram non judice and cannot be sustained in law. It was then argued that the cheques issued by the appellants were cross cheques with the endorsement of "payees account only" and the same ceased to be negotiable, hence could not be treated as negotiable instruments muchless a suit could be filed under Order XXXVII, C.P.C.

8. Learned counsel for the respondent, on the other hand, argued that since Mansoor Textile Mills Limited had been sued through Jamaat Ali Shah and the said Jamaat Ali Shah being already represented through a counsel, it would simply give effect to technicality by arguing that Mansoor Textile Mills ought to have been summoned in the case.

9. As far the cross cheques with an endorsement of "payees account only", I have tried to locate the same on the record but excepting in one case the cheques are not available on the record. The envelopes are, however, found on the record and it appears that the cheques were enclosed therein and sealed but the said envelopes are found open while the cheques which were ordered to be sealed have not been found therein. Presumably the said. envelopes were opened at the time when evidence was recorded but the original cheques are still not available. Confronted therewith, learned counsel for the parties. could not make any plausible answer thereto. Since photostat copy of one cheque has been found to be crossed, the others are also taken as such. Learned counsel for the respondent did not deny this fact that the cheques were crossed with an endorsement of "payees account only". The said learned counsel, however, maintained that the cheques have been considered to be negotiable instruments and even if they are crossed with an endorsement of "payees account only", the same shall be considered to be negotiable instruments within the meaning of Order XXXVII, C.P.C.

10. The perusal of the record shows that Mansoor Textile Mills Limited i:e. appellant No. l was ordered to be impleaded as such vide order, dated 30‑10‑1986. and pursuant to that order amended plaint was filed on 1.‑11‑1986. The order passed on the said date may be reproduced herein to understand as to what happened on the said date:‑‑‑ Present: Ch. Sher Muhammad Sindhu, Advocate for the Plaintiff. Amended plaint has been presented on behalf of Syed Jamaat Ali Shah, Syed Jamshed Ali, Advocate (from Lahore) had presented an application seeking leave to defend. Today, Sh. Muhammad Aslam, Advocate is herein proxy for Syed Jamshed Ali, Advocate. Ch. Sher Ahmad Sindhu, Advocate has offered a copy of the plaint, through the Court, to Sh. Muhammad Aslam, Advocate who has not accepted it. According to him, service should be caused upon the Mansoor Textile Mills by ordinary summonses. The file shall come up on 8‑11‑1986 for appropriate proceedings. The plaintiff is directed to place the original documents upon the file, whereupon he seeks to base his claim. Announced. 1‑11‑1986. Additional District Judge, Faisalabad. It would be seen from the said order that although it was pointed out by the learned counsel for the existing appellant No.2 that summons be issued to Mansoor Textile Mills Limited but no summons were so issued. Needless to add that the summons were never issued to appellant No.

1. It is axiomatic that a limited concern is a juristic person having independent and distinct entity of its own. It need not be sued through anybody. Simple description of a limited company is enough. Rule 2 of the Order XXIX deals with the service on corporation and it ordains as follows:‑‑

2. Service on corporation.‑‑‑ Subject to any statutory provision regulating service of process, where the suit is against a corporation the summons may be served‑‑ . (a) on the secretary, or any, director, or other principal officer of the corporation, or (b) by leaving it or sending it by‑post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business. A bare reading of the abovesaid rule would reveal that in the case of corporations, the summonses could have been served on any of the Directors of such Corporations and in the instant case, the learned counsel for the Managing Director of the added respondent being in attendance, the offering of copy of the amended plaint to the learned counsel for the respondent could be deemed to be enough service on the added respondent but perhaps this is not the end of .the matter for this being a case of added defendant and summary suit, the summons were required to be issued as per provisions of sub‑rule (4) of Rule 10 of the Order I and that too in Form IV of Appendix "B" of the C. P. C. as per the intent of Rule 2 of Order XXXVII (ibid). No such effort appears to have been made instead the learned counsel for the respondent remained contended with simple offer of amended plaint whereby the appellant No. l was added as defendant No. l in the original suit, the offer was rightly declined by the learned counsel for the existing respondent for he was holding power only on behalf of the existing defendant arid then it is not the case that the existing defendant i.e. Managing Director of the company was in attendance and had refused to accept the copy of the amended plaint. Again, in the eventuality as such no effort appears to have been made for issuing a special summons in Form IV of Appendix "B". All said and done, no order was passed by the Court thereby proceeding ex parte against the appellant No. L. All in all, the appellant No. l remained unrepresented before the Court for no order for the issuance of summon to the added defendant was ever made and then considering the offer of the copy of the amended plaint to the learned counsel for the existing defendant to be sufficient service on the said added defendant, no ex parte order was ever passed by the Court. It is now well‑settled that the act of the Court could not prejudice any of the parties to the suit and in the instant case the prejudice caused to the‑ appellant No.1 is too obvious for neither the Court issued any summons to him i.e. special summons or even an ordinary summons nor the offer whereby the amended copy of the plaint was offered to the learned counsel for the existing respondent was considered to be enough service on the said defendant‑not any ex parte order was passed against the added defendant: Needless to add that the limitation prescribed for such a defendant, to appear and defend the case, did not startl running against him. The order passed on 1‑11‑1986 is bereft of any reasoning whereby it could be inferred that the appellant No.1/defendant .No.l in the case was proceeded against ex parte, therefore, no ex parte decree could be passed against appellant No.

1. In the circumstances, the judgment of the learned Additional District Judge, cannot be sustained on this count.

11. Coming to the argument that in the instant case the crossed. cheques with an endorsement of "payees account only" had become non‑negotiable as per provisions of section 123‑A of the Negotiable Instruments Act, 1881, therefore, no .suit under Order XXXVII. C.P.C. could be maintained on the basis thereof for the said order provides summary procedure on negotiable instruments. Section 123‑A of the Negotiable Instruments Act, 1881 reads as under:.‑‑

' 123‑A. Cheque crossed "account payee".‑‑‑ Where a cheque crossed generally bears across its face an addition of the words "account payee" between the two parallel transverse lines constituting the general crossing, the cheque, besides being crossed generally, is said to be crossed "account payee". (2) When a cheque is crossed "account payee"‑‑‑ ' (a) it shall cease to be negotiable; and (b) it shall be the duty of the banker collecting payment of the cheque to credit the proceeds thereof only to the account of the payee named in the cheque. The provisions of afore‑referred section seem to be added to the main text of Negotiable Instruments Act, 1881 as a rule of guidance for the banks and it has definite wisdom in that regard. The cheque, be it negotiable or non negotiable, is a Bill of Exchange as understood under Order XXXVII of the G C.P.C. and it is no where provided that a Bill of Exchange, should also be negotiable. The argument that the Order XXXVII of the C.P.C. carries the heading 'Summary Procedure of Negotiable Instruments' and that the cheque having become non‑negotiable, no suit thereon could be maintained has been squarely answered in the case of "Messrs Hossen Brothers Ltd., Karachi v. Messrs Lakhani Corporation, Karachi" PLD 1976 Kar. 116, wherein it was held:‑

"It is an accepted rule of interpretation of statutes that headings prefixed to sections cannot ,control the plain words of the statutes although they may explain ambiguous words. The abovesaid dictum is in turn based on the rule laid down by Lord Goddard, C.J in R.v. Surrey (North Eastern Area) Assessment Committee (2) which may also be reproduced hereunder for its lucidness:‑‑ "While the Court is entitled to look at the headings in an Act of Parliament to resolve any doubt they may have as to ambiguous words, the law is quite clear that you cannot use such headings to give a different effect to clear words in the section, where there cannot be any doubt as to their ordinary meaning." It would thus, be clear that the headings of a certain order cannot be referred to unless there being ambiguity in understanding the clear words of a certain section, order or the rule, Needless to add that in the abovesaid judgment the contention as to cheque having become non‑negotiable on account of endorsement thereon "payees account only" and that no summary suit could be tiled on the basis thereon was repelled. To the same effect is another judgment rendered in the case of Sebro Pherma Ltd. v. Commercial Printers and Publishers 1989 MLD 1979. I am in respectful agreement with the two judgments afore‑noted. After all the payee is entitled to receive the proceeds of the cross‑cheques and it does not make any difference if the same is crossed with an endorsement of ".payees account only" for it remains to be a bill of exchange on which a suit could legally be maintained if the said cheque is bounced or dishonoured. This contention of the learned counsel for the appellant is repelled. In the circumstances, since the judgment of the learned Additional District Judge suffers from vitiative infirmity insofar as service of appellant No. l is concerned, therefore, the same is not sustainable.

12. In result, all these appeals are accepted. The judgment and decree; dated 22‑1‑1987 are set aside, resultantly, the case is remitted to the learned Additional District Judge, who shall proceed therewith in accordance with law. The parties are directed to appear before the said learned Additional District Judge, on 16‑4‑2001 whereafter, the appellant No. l shall be given 10 days' time to apply for leave to defend and if such a leave is applied, the same shall be determined on its own merits. There shall, however, be no order as to costs. Q.M.H./M.A.M.K./M‑514/L Appeal allowed.