1989 PLP 4355 (MLD)

3. According to the plaint, the defendants availed of the Cash Credit Facility allowed to them in November, 1970. In consideration of Cash Credit Facility, the defendants executed in favour of Bank of China two promissory note; one on 19-4-1971, and the other on 24-8-1971 for Rs.1,50,000 and Rs.75,000 respectively, as security for repayment of any amount found due against the defendants and in favour of the plaintiff-Bank. After merger of Bank of China with the plaintiff Bank, the account of the defendants was settled on 10-5-1972 when an amount of Rs.92,338.37Ps. was found due and payable by the defendants, who acknowledged their liability and executed such promissory note for payment of Rs.2,00,000 to the plaintiff-Bank on demand or on order with interest at the usual rate. Subsequently the defendants acknowledged their liability in writing on 31-12-1971 and again on 24-11-1972, to pay their dues to the plaintiff. As security for such payment, the defendants hypothecated their stock of nut bolts with the plaintiff Bank and executed such Agreement of Hypothecation on 10-5-1972. Ultimately on 3-9-1974 plaintiff filed this suit and claimed an amount of Rs.1,20,742.56 from the defendants jointly and severally.

4. In their written statement, the defendants contested the suit and denied if they were granted in November, 1.970 Cash Credit Facility by the Bank of China. They also denied execution of the promissory notes on 19-4-1971 and on 24-8-1971. Defendants averred that in view of their cordial relations with the Bank of China they were granted overdraft facility to the extent of Rupees Three Lacs and in return they had delivered to the Bank of China blank pronotes. The defendants denied having acknowledged their liability and having executed a pronote of Rupees Two Lacs on 10-5-1972. Defendants denied if the confirmation slips amounted to acknowledgement. The defendants admitted having executed the Letter of Hypothecation and said that this was done by them for the purpose of getting overdraft facility which was subsequently refused by the plaintiff Bank. Claim of the plaintiff was also challenged to be time-barred.

5. Following consent issues submitted by the plaintiff were adopted by the Court on 1-9-1975:- "(1) Whether the Promissory Notes mentioned in the plaint were executed in blank by the Defendants? if so, to what effect? (2) Whether the defendants acknowledged their liability ? (3) What should the decree be ?"

6. Plaintiff adduced evidence on 23-1-1989 when the defendants were absent and none appeared for them. Thus no evidence was adduced from side of the defendants. 7.I have heard Mr. Mansoorul Arfin, Advocate for the plaintiff. My findings to the above issues follow with reasons:

8. Issue No.1--The onus of this issue was on the defendants who did not lead any evidence. Plaintiff examined Syed Tahir Hussain Ex.5 who was an officer in the Bank of China in 1970. He produced the Promissory Notes Exs. 8/1 to 8/3. In their written statement, the defendants pleaded that they had delivered to the Bank of China blank promissory notes, on being granted overdraft facility. The promissory notes Exs.8/1 to 8/3 appear to have been signed by somebody on behalf of defendant No.l. However, some words in the promissory notes Exs. 8/1 to 8/3 appear to have been written/typed after preparation of the same. This supports the plea that the defendant No.1 was made to sign blank pronotes. Learned counsel for the plaintiff argued that even if blank promissory notes were signed and handed over to the bank by the defendants, they were equally bound by the same, in view of section 20 of the Negotiable Instruments Act. Learned counsel cited the cases of (i) Messrs United Bank Limited v. President Bazme Salat and another PLD 1986 Kar. 464 and (ii) National Bank of Pakistan v. Azizul Hassan and others 1984 MLD 1035. Section 20 of Negotiable Instruments Act deals with Inchoate (unfinished) Stamped instruments. Its subsection cads as under:- "(1) Where one person signs and delivers to another a paper stamped accordance with the law relating to stamp duty chargeable on negotiable instrument, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made, or completed into a negotiable instrument he thereby gives prima facie authority to the person who receives that paper to make or complete it, as the case may be, into a negotiable instrument for the amount if any, specified therein, or, where no amount is specified, for any amount, not exceeding in either case, the amount covered by the stamp." In (i) above, it was observed that a person to whom the blank promissory riot is delivered to fill, would have authority to fill the same, but such authority has to be exercised within a reasonable time and such promissory note could be completed within three years from the date of delivery. It was further observed that the right to complete an inchoate document was a statutory right without any restriction and could be completed even after death of executant. In (ii) above it was observed that the person delivering blank promissory note gives prima facie authority to the person receiving that paper to complete the same into negotiable instrument for the amount specified therein or where no amount was specified not exceeding the amount covered by the stamp. In view of such legal positron, no fault can be found with the promissory notes Exs.8/1 to 8/3, if they were given blank to the Bank of China by the defendants. This issue is decided accordingly.

9. Issue No.2.--P.W. Tahir Hussain Ex.5 produced Balance Confirmation slips Ex.9/1 and Ex.9/2. Relying on them learned counsel for the plaintiff submitted that under said Slips the defendants had acknowledged their liability. There is force in this contention. Pro-note Ex.8/1 was executed on 24-8-1971 while pro-note Ex.8/2 was executed on 22-4-1971 and the pro-note Ex.8/3 was executed on 19-5-1972. The suit based on pro-note Ex.8/1 could be filed by 24-8-1974, and the suit based on Ex.8/2 could be filed by 22-4-1974. As against this, present suit B was filed on 3-9-1974. However, the fresh period of limitation started running from 31-12-1971 when the defendants signed the confirmation slip Ex.9/1. Again fresh period of limitation commenced from 24-11-1972 when the defendants signed the confirmation slip Ex.9/2. 1, therefore find this issue in affirmative.

10. Issue No.3.--P.W. Tahir Hussain Ex.5 produced the cheques Exs.6/1 to 6/10 under which the defendants withdrew money from the Bank of China, which was merged with the National Bank of Pakistan on 1-9-1971. He also produced the cheques Exs.7/1 to 7/47 under which the defendants withdrew from the plaintiff-Bank different sums of money. This witness also produced copies Exs.10/1 to 10/9 of the letters sent by the defendant No.l to the plaintiff-Bank, and copies Exs.11/1 to 11/4 of letters sent by the plaintiff-Bank to the defendant No.l. He also produced copy Ex.12 of a legal notice sent to the defendant No.1, ropy Ex.15 of the statement of accounts. All this evidence proves case of the plaintiff.

11. I, therefore, decree with costs suit of the plaintiff for recovery of 20,742.56 , from the defendants, with interest on the decretal amount at 10% from 3-9-1974 till the date of recovery. M.Y.H./N-205/K.