2003 PLP 440 (CLD)

The counsel pointed out limitation period in respect of recovery, but I am in conformity with opposite counsel that this objection was not taken into consideration by the Honourable High Court as well as Honourable Supreme Court, therefore, at this stage it cannot be agitated that suit for recovery is barred by limitation particularly in view of section 39(A) of the Ordinance. The objections raised in the arguments are subsequent thought, and have been taken up in piecemeal. The objection which was raised before Honourable Supreme Court was the right of reverse which has been discussed above. The learned counsel submitted case‑law in respect of recovery of bank loans, which are not applicable under the circumstances and facts of this case. The counsel for the respondents raised another objection that in view of impediment provided under section 134 of the Contract Act the surety cannot be held liable for any charge against a debtor after prescribed period of limitation. Although learned counsel has himself admitted that this period will be started when IDBP has written off or waived the debts against a principal debtor, as has been discussed above outstanding dues have never been written off, therefore, the provisions of section 134 of the Contract Act will not come in operation, resultantly the citation of case‑law on this score is not applicable in this case. It is, therefore, held that order passed by this Court on 2‑4‑1997 was right and after due consideration of the facts on record and in rebuttal the respondents could not provide any substantial material, therefore, the order passed by this Court on 2‑4‑1997 is hereby confirmed any recovery be effected according to the provisions of law." Feeling aggrieved the appellants filed the present appeal under section 39 of the said Ordinance.

6. We have heard Mr. Ijaz Ahmad, Advocate for appellants and Mr. Muhammad Riaz Ahmed, Advocate for respondents.

7. The main contentions maintained and put forth on behalf of the appellants are as under:‑‑ (a) That at the time of receiving the payment from the liquidator of the company, respondent‑Bank treated the same as full and final payment in the complete settlement of its dues and the balance in the account was brought to "Nil", therefore, respondent Bank is now estopped from making any claim against the appellants on account of the dues which have already been settled and the transaction has become past and closed. (b) That respondent‑Bank had written off and waived all the debts outstanding against the principal debtor company upon receiving the payment from the liquidator, therefore, guarantees allegedly executed by appellants or their predecessors were discharged by operation of section 134 of the Contract Act, 1872. It has also been submitted that valuable rights have accrued in favour of the appellants and the same cannot be undone to the prejudice of the appellants on mere whims of respondent‑Bank. (c) That respondent‑Bank has written off and waived debts of the company without any consent of appellants and accordingly the guarantees allegedly executed by the appellants or their predecessors stands discharged as under section 135 of the Contract Act, 1872 a surety is discharged if the creditor and the principal debtor make a composition or the creditor gives time to or agrees not to sue the principal debtor unless such contract is made with consent of the surety. (d) That the appellants in their civil petition for leave to appeal had very clearly stated that the liabilities o1 the company were "written off' and respondent Bank had no authority to reverse or revive the same. It has been submitted that the learned District Judge (ad hoc), Quetta has earlier rejected the objection on the ground that there is "no question of right of reverse" but on the other hand, the learned Judge held in the order dated 23‑6‑2000 that the liabilities were never written off. Elaborating arguments, it has been submitted that the objection raised by the appellants has not been appreciated and the order dated 23‑6‑2000 is also contradictory to the earlier order passed by the learned District Judge (ad hoc) on 10‑4‑2000. (e) That the claim of the respondent‑Bank against the appellants is hopelessly barred by limitation, as the cause of action against the guarantors arose in 1970 and 1973 when the guarantees were executed while the petition was filed in 1997 after lapse of more than 24 years but the learned Judge has failed to even consider this objection which was raised at the earliest opportunity. It has been submitted that the question of limitation is a mixed question of law and fact and could not be decided without giving an opportunity to the parties to lead evidence. (f) That Credit Agreements being relied upon by the respondent‑Bank provides for simple interest while the statement of account shows that the respondent‑Bank has been charging compound interest and penal interest and has, therefore, recovered huge amounts from the company and its assets in excess of the legal dues of respondent Bank. (g) That the terms regarding the imposition of liquidated damages contained in the Credit Agreements are not enforceable in view of the judgments of the superior Courts and the penal interest has been charged on the basis of the aforesaid terms in respect of liquidated damages, the same are not recoverable either from company or the appellants. (h) That the statement of account does not contain material particulars such as the rate of interest charged from time to time. It has been alleged that the appellants strongly apprehend that the respondent‑Bank has interpolated and manipulated the accounts to inflate its claim. (i) That the statements of account filed alongwith the petition is not certified in accordance with the provisions of the Bankers' Book Evidence Act, 1891 and, therefore, the entries contained therein cannot be relied upon unless proved in accordance with law. (j) That the respondent‑Bank has not attached any document with its petition showing any decision taken by the Board of respondent‑Bank enforcing the reversal of the write off and waiver granted to the company. It has been submitted that even if any such document exists, the Board of respondent Bank or any other person or authority is not authorized to take such decision under law. (k) That the guarantees allegedly executed by the deceased predecessors of the appellants have ceased to have any effect on account of death of executants. (l) That the provisions of section 39 of the IDBP Ordinance, 1961 can only be invoked for the recovery of a "loan" while in the present case no loan exists after the balance in the company's account was brought to "Nil". (m) That the findings of the learned District Judge (ad hoc) that after filing of the application dated 5‑9‑1997, the appellants are not entitled to file written statement, is in clear violation of the provisions of the IDBP Ordinance, C.P.C. and the principles laid down by the superior Courts of Pakistan. (n) That it is a settled principle of law that any party approaching the Court has to succeed on the strength of its own case and not on the weakness of the opposite‑party's case and the respondent‑Bank is duty bound to establish the validity of its claim. (o) That the impugned orders have not been passed in accordance with the terms of the order passed by the Honourable Supreme Court. (p) That the observations of the learned District Judge (ad hoc), Quetta in the order dated 10‑4‑2000 that no objection relating to the reversal of write off was raised by the appellants in earlier proceedings, is irrelevant as the Honourable Supreme Court had directed the learned District Judge to decide this objection on merits as a preliminary point. The learned counsel in support of his contentions has relied upon the authorities, reported in 1998 CLC 353 and 1999 YLR 123 Karachi.

8. On the other hand, learned counsel for the respondent‑Bank has supported both the impugned orders and also resisted the acceptance of the appeal.

9. After having given our anxious consideration to the arguments advanced by the learned counsel for the parties and perusing the relevant documents, we are of the view that the impugned orders dated 10‑4‑2000 and 23‑6‑2000 are not sustainable and we do not feel inclined to subscribe to the conclusion arrived at by the learned District Judge (ad hoc), Quetta. To prove the claim, is on the claimant. There appears force in the contentions of learned counsel for the appellants that any party A approaching the Court has to succeed on the strength of its own case and not on the weakness of the opposite party's case. The trial Court should have satisfied itself with regard to validity of the claim. In the circumstances of the case, the appellants ought to have been allowed regarding submission of the written statement as no one should be condemned unheard unless and until barred by law. According to section 39(5) before passing any order under subsection (3) or subsection (4) the District Judge may, if he thinks fit, examine the person making the application but in the instant case it appears that the learned Additional District Judge‑I, Quetta did not comply with the aforesaid provisions of law. It appears that the B learned trial Court has not thoroughly studied the record so as to reach to correct conclusion rather he dealt with the matter in a cursory manner. The learned District Judge (ad hoc), Quetta should have complied with the directives of the Honourable Supreme Court in letter and spirit. Keeping in view the circumstances of the case he should have proceeded to investigate the claim in accordance with the provisions of section 39(8) of the said Ordinance and should have passed a proper order as per provisions under its subsection (9).

10. There is also force in the contentions of learned counsel regarding plea of limitation. It may also be noted that even if the appellants had not raised the plea of limitation, it was incumbent upon the Court to consider as to whether the suit is within time, particularly, in view of the statement made by the respondent‑Bank in the paragraph pertaining to cause of action. It is incumbent upon the Court seized with the matter to exercise jurisdiction keeping in view section 3 of the Limitation Act notwithstanding the fact whether the defendant had sought dismissal of the suit by setting the plea of limitation? In the instant case the plea of limitation was raised in both of the rejoinders i.e. 7‑6‑1997 and 5‑9‑1997 filed on behalf of appellants. The observations made by the Honourable Supreme Court in the authority reported in PLD 1985 SC 153 are noteworthy. The relevant portion of which is reproduced below for the sake of facility:‑‑ "The words of section 3 of the Limitation Act are mandatory in nature in that every suit instituted after the period of limitation shall, subject to the provision of sections 4 to 25 of that Act, be dismissed although limitation has not been set up as a defence. If from the statement in the plaint the suit appears to be barred by limitation, the plaint shall have to be rejected also under Order VII, rule 11, Civil Procedure Code. The law, therefore, does not leave the matter of limitation to the pleadings of the parties. It imposes a duty in this regard upon the Court itself. There is a chain of authority, and a detailed discussion of the same is not necessary, to lay down that limitation being a matter of statute and the provisions being mandatory, it cannot be waived and even if waived can be taken up by the party waiving it and by the Courts themselves. In Sitharama v. Krishnaswami ILR 38 Mad. 374, where the defendants had pleaded the bar of limitation but the trial Court had held that they having admitted their liability for the amount in resisting the plaintiffs application in a previous suit, were estopped on general principles of law and equity from pleading that the suit was barred by limitation it was ruled that the defendants were not estopped and it was observed that "the bar of limitation cannot be waived, and suits and other proceedings must be dismissed if brought after the prescribed period of limitation" and that "the Judge cannot, on equitable grounds, enlarge the time allowed by the law, postpone its operation, or introduce exceptions not recognized by it'. The same Court in a subsequent case, Ramamurthy v. Gopayya ILR 40 Mad. 701, reiterated that the parties cannot estop themselves from pleading the provisions of the statute of limitation the Lahore High Court also took a similar view in Kundo Mal v. Firm Daulat Ram AIR 1940 Lah. 75, and held that there is abundant authority in support of the proposition that objections regarding limitation cannot be waived and that even if they are waived they can be taken up again by the parties waiving them or by the Courts themselves."

11. There is also force in the contention of learned counsel for the appellants, that the issue of limitation being a mixed question of law and facts could not be resolved without giving an opportunity to the parties to produce their respective evidence in respect of the same. We would have dealt with other aspects of the case but the same may prejudice either of the party during trial.

12. Having regard to the above mentioned factors and circumstances of the case, we are persuaded to allow this appeal and the impugned orders are accordingly set aside. Resultantly the matter is remanded to learned District Judge (ad hoc) Quetta for adjudication in accordance with law after providing opportunity of hearing to the parties, with no orders as to costs. Q.M.H./M.A.K./131/Q Case remanded.