2000 PLP 1219 (YLR)

This is an application under Order XXV, Rule 1, C.P.C. filed by the defendant that the plaintiff company beg directed to furnish security for costs. This suit is for recovery of money by the plaintiff carrier against the defendants (general Sales Agent, whose Agency has been terminated). Registered office of the plaintiff is in Philippine at Allied Bank Center, 67541 Ayala Avenue, Makati City, Philippines, and the plaintiff company has no immovable property in Pakistan, therefore, the case comes within the terms and Order XXV, Rule 1, C.P.C., which provides that the Court in such circumstances, may order the plaintiff to give security for costs. Order XXV, Rule 1, C.P.C. is annalogous to the provisions of Order XLI, Rule 10(2), C.P.C. Rule 2 of Order XXV and sub‑rule (3) of rule 10 of Order XLI contain similar penal consequences with slight difference. In case of suit, the sane shall be dismissed, in case of appeal; it shall be rejected, if the order passed has not been complied with within the period specified in the order by the Court. On plain reading of Rule 1 of Order XXV, power of the Court is discretionary and one which the Court ought or ought not to exercise according to the circumstances of each case and that unless it is shown that the exercise of power is necessary for the reasonable protection of the defendant the Court ought not to interfere. Such costs have been quantified by Rule 108 of the Sindh Chief Court (O.S.) Rules to the extent of bond in the sum of Rs. 1,000 unless otherwise directed by the Court. The provisions of Order XXV provides the grounds for exercising powers for security by the plaintiff for the costs, whereas, Rule 108 referred to above, quantifies the amount of bond in normal course. Mr. Ahmed Saeed, learned counsel for the defendant, has vehemently urged that the plaintiff company is permanently based in Philippine and has no assets in Pakistan. He further contended that he plaintiff is in financial difficulties. A statement has been filed with Annexure of news cutting of daily "The News" dated 6‑12‑1998 titled "Estrada seeks talks with Cathay, PAL". He contended that in. case of costs in the suit, the defendants would not be able to recover the same from the plaintiff and protection of the Court for security as to the costs is necessary. Mr. Qazi Faez Isa, learned counsel for the plaintiff, has vehemently opposed the application. His contention was that power of the Court under Order XXV, Rule 1, C.P.C. is discretionary and it is to be exercised with reference to the circumstances of the case before the Court. He further contended that defendant No. 1 have admitted the claim of Rs. 5,362,

81. They have pleaded set off and counter‑claim, which are yet to be establish. He contended that the defendant, who acted as General sale Agent of the plaintiff in territory of Pakistan, have withheld the amount. Their application for injunction against the termination of .the said agency failed. Thus, he contended that the defendant have failed to make out a case for order of security as to the costs. Learned counsel for the defendant has referred the following cases in support of his contention:‑‑ (i) Hiralal Ram Sukh v. Monghbai Chimanaji (AIR 1938 Bombay 510). (ii) Mangilal Sitaram Agarwal v. Mst. Durgabai (AIR ‑ (34) 1947 Nagpur 124). (iii) Cellular Clothing Co. Ltd. v. Sen Abdul & Co. (AIR 1939 Calcutta 154). (iv) Arumugam Chettiar v. K.R.S. Sevugan Chettiar (AIR 1950 Madras 779). (v) Sony Kabushiki Kaisha v. Arif Muhammad Gondal (1997 CLC 227). Learned counsel for the plaintiff has also referred the cases referred to by the the protection of defendant, the Court ought not order security to be taken." In case of Mangilal (supra) learned Judge of the Nagpur High Court refused to grant relief for security in revision application against the refusal order for security as to the costs and observed in the following words: ‑‑‑ "To begin with the order under Order 25, Rule 1 is a purely discretionary order and that discretion is vested by legislature in the trial Court. It was held in 63 Cal. 897 that the discretion of the trial Court is unqualified and unfettered. Even if one does not go so, far, it is apparent that the discretion of the first Court cannot be interfered with except in very exceptional circumstances amounting either to no exercise of discretion or to exercise which is manifestly contrary to express provision of law or is otherwise arbitrary or perverse. A mere mistake in the exercise of discretion which it is within the jurisdiction of the lower Court to exercise would be no ground to interfere in revision. " It was further held that; "An unexplained delay in applying often raises an inference of want of bona fides and disentitles a party to a discretionary relief." It may be noticed that the provisions of Order XXV, Rule 1, C.P.C. was amended by the Nagpur High Court, by making the p; provisions of Rule 1 applicable to the plaintiff irrespective of the residence and if the plaintiff is being financed by someone, who is not a party to the suit. The amendment referred has drastically changed the very complex of the provision of Order XXV. In the case of Arumugam Chettiar (supra) it was held that order for security as to the costs can be asked only under exceptional circumstances and it should be exception and not a rule and it must be pressed upon some established principle not on mere circumstances that the Court in its first impression finds a suit as not a bona fide suit. In the case of Sony (supra) decided by my learned brother Rashid Ahmad Razvi, J. wherein he directed the plaintiff to furnish a bank guarantee in the sum of Rs. 20,000, who were foreigner and had no property in Pakistan. From the above cited and discussed cases, the following legal position emerges:‑‑‑ (i) The power of Court under Order XXV, Rule 1 is discretionary to be exercised in the light of circumstances of each case. (ii) In appropriate cases, the order in nature live Order XXV, Rule 1 can be passed under the inherent power of the Court under section 151 in the interest of justice or to prevent abuse of the process of Court or for proper administration of real and substantial justice. (iii) Power can be exercised when it is shown that it is necessary for the reasonable protection of the defendant. (iv) It is not right of the defendant but can be exercised under exceptional circumstances, and it should be the exception and not a rule‑ (v) The power cannot be exercised to stultify a bona fide suit of a plaintiff, but to give protection to defendant, if such protection is necessary. Reverting to the present case, the suit of the plaintiff, who is no doubt a foreign company, having no assets in Pakistan, is for recovery. Their claim to the extent of Rs. 50 million is admitted I subject to plea of limitation, set off and counter‑claim. On account of counter‑claim, the position of the plaintiff becomes duel i.e. defendant as well qua the counter‑claim of the applicant. In such circumstances, I have no intention to say anything on the merit of the case beyond this that it is apparent from the material so far placed on record that plaintiff has a good case until rebutted. The strength of the plaintiff's case is a relevant circumstances to be taken into consideration in disposing of the application under Order 25, Rule 1, C.P.C. which cannot be exercised to stultify a bona fide suit of the plaintiff. The facts stated in the statement alongwith Annexure cannot be considered without notice to plaintiff/respondent. Thus, the circumstances of the case do not warrant for the exercise of discretionary power in favour of the defendant directing the plaintiff to furnish security as to the costs. Resultantly, the application under Order 25, Rule 1, C.P.C. filed by the applicant/defendant is dismissed, however, with no order as to costs. Q. M. H. /M. A. K./P‑1/K Application dismissed.