2026 PLP 760 (CLC)

MUZAMIL AKHTAR SHABIR, J.

Through this Civil Revision, Allah Ditta (the petitioner-defendant) has called in question order dated 30.07.2024 passed by learned Addl. District Judge, Layyah ( the trial court ), whereby in a suit for recovery of Rs. 15,00,00,000/-, on the basis of promissory note ( pronote ) filed against the petitioner by Muhammad Ramzan, the respondent-plaintiff, who is real brother of the petitioner, condition of depositing surety bond equal to the claimed amount has been imposed upon the petitioner for grant of leave to defend.

2. Learned counsel for the petitioner states that petitioner is a poor man and his application for grant of leave to defend merited to be unconditionally allowed for the reason that he had expressly and categorically denied claim of the respondent.

3. On the other hand, learned counsel for respondent has defended the impugned order by relying upon his contentions in the plaint to the effect that both brothers had jointly entered into business, for which purpose, the respondent had transferred his property valuing crores of rupees to the petitioner amantan , for recovery of which the petitioner has issued a pronote in favour of the respondent.

4. Heard. Record perused.

5. The respondent on the basis of pronote, stated to be executed by the petitioner in his favour, has filed suit under Order XXXVII Code of Civil Procedure, 1908, ( C.P.C. ) for recovery of Rs. 15,00,00,000/- by claiming that for the purpose of joint business of both the brothers, the respondent had transferred property worth crores of Rupees to the petitioner against which the aforementioned pronote had been executed by the petitioner in his favour. The petitioner through his application for leave to defend has denied having received afore referred property and claimed that the relationship between the brothers was strained and they did not have any joint business, the story of transfer of property by the respondent was concocted, previous civil litigation was pending between the parties and the claim of the respondent is based on fabricated documents. It is also claimed that respondent has yet to establish any document through which property was transferred to the petitioner for running of business, hence, learned Addl. District Judge, Layyah, was not justified to direct the petitioner to submit surety bond equal to the amount claimed in the suit on the basis of pronote. The counsel for the respondent has defended the aforementioned order by claiming that the said order was justified as petitioner was holding crores of Rupees belonging to the respondent without any just cause.

6. For clarity the impugned order dated 30.07.2024 is reproduced below: Today the case was fixed for arguments on application for leave to defend the suit. At this stage, learned counsel for the respondent/plaintiff submits that although contents of petition for leave to defend the suit are based on concoction and ridiculous, however, he has no objection on the acceptance of aforesaid application subject to payment of cost.

2. Through the instant petition, it is averred by the petitioner/defendant that neither he obtained any amount from the respondent/plaintiff mentioned in the plaint or executed the pronote and receipt nor the said documents bore his signatures and thumb impressions and thus, the impugned pronote and receipt are against the law and facts, result of fraud, forgery and impersonation, therefore, permission is sought to defend the suit.

3. As discussed above, learned counsel for the respondent/plaintiff has no objection on the acceptance of application for leave to defend the suit.

4. The contents of petition for leave to defend are supported by an affidavit. Moreover, this fact is also evident from the petition that the petitioner has categorically refuted the stance of the respondent/plaintiff. This situation leads this Court to the impression that the matter in controversy can only be resolved after recording of evidence. The petition is also well within time. As valuable rights of the petitioner are involved in the suit and if such permission is not granted to him, he would have to suffer a lot, therefore, in the interest of justice, application for leave to defend is allowed subject to his furnishing surety bond in the sum of Rs. 15,00,00,000/- with one surety in the like amount to the satisfaction of this Court.

5. To come up for furnishing surety bond by the defendant in compliance of even-dated order and written statement on 05.09.2024.

7. The perusal of the afore-referred order shows that on one hand, on the basis of denial of the petitioner to have executed the afore-mentioned pronote, the court reached the conclusion that the matter in controversy can only be resolved after recording of evidence as valuable rights of the petitioner are involved in the suit and if such permission is not granted to him, he would have to suffer a lot and on the other hand, the court while allowing the application for leave to defend imposed condition of furnishing surety bond in the sum of Rs. 15,00,00,000/- with one surety in the like amount to the satisfaction of the court. The said condition apparently appears to have been imposed on the ground that respondent had appeared in the Court and stated that he had no objection to grant of leave to defend subject to payment of costs. From the tenor of the impugned order, the phrase subject to payment of costs in the statement of the respondent was probably treated by the court as subject to furnishing of security/surety bond .

8. While granting leave to defend in a suit under summary jurisdiction, although the concession of the plaintiff can be taken into consideration by the trial court, yet while relying upon the same, the court has also to take into consideration that whether the leave should be granted conditionally or unconditionally and the same is to be done by application of independent judicious mind without being influenced by the concession of the plaintiff requiring the court to impose a condition of either depositing the amount or furnishing security for the same in any shape such as submitting surety bond, bank guarantee, etc.

9. The question of grant of leave to defend with or without condition came up for consideration before the Supreme Court in case reported as Zubair Ahmad and another v. Shahid Mirza and 2 others (2004 SCMR 1747), wherein it has been held that although the order of grant or refusal of leave to defend is discretionary yet the discretion upon which leave to defend can be granted conditionally or unconditionally is to be exercised on the basis of sound judicial reasoning. The operative portion of said order is reproduced below: In law and common sense, the discretion is discerning between wrong and right and power to act at discretion is bound by the rule of reasons which must be guided by law and must not be used in an arbitrary; vague and fanciful manner, rather it should be honest, legal and in the spirit of statute. In judicial matters, the exercise of discretion must be based on good and substantial reason. The Supreme Court further held that the defence taken by the applicant/defendant for grant of unconditional leave to defend should be of good standard, which should be considered plausible for grant of unconditional leave to defend. It is clear from the above mentioned verdict that there should be application of mind for decision of the application for grant of leave to defend by keeping in view the standard and plausibility of defence of the applicant-defendant and such an order could not be passed in an arbitrary manner resulting in imposition of a condition merely at the asking of the plaintiff of the case.

10. In a similar situation this Court in Mian Ejaz Amir v. Haji Muhammad Ibrahim (2003 CLD 534 = 2023 CLC 880) considering the case of condition imposed while granting leave to defend held as under :-

16. The impugned order clearly depicts that the while granting the leave to defend the suit, the condition has been imposed, merely on the basis of unilateral statement of respondent, without even considering any dispute raised in the leave application. It is also apparent that exercise of discretion by learned trial Court, conferred under the Code, is based on some misunderstanding of above discussed principles that govern such exercise of discretion.

17. For what has been discussed above, this petition is allowed and the impugned order, passed by learned Additional District Judge, Rahim Yar Khan, to the extent of imposing the condition is set-aside and the matter is remanded with the direction to decide the same afresh, after hearing both the parties, preferably within one month from the date of receipt of certified copy of this judgment.

11. The principles for grant of conditional or unconditional leave to defend came up for consideration in Naseem Khan v. Sardar Bahadur Khan (PLD 2019 Peshawar 141), wherein while considering the provisions of Rule 3 of Order XXXVII of the C.P.C, following principles have been mentioned:- The Court under the rule ibid has the discretion to grant leave to defend conditionally or unconditionally which depends upon the facts and circumstances of each case. The very purpose of the rule ibid is to empower the Court to strike a balance between two situations i.e. where triable issues are raised/disclosed by the defendant, then unconditional leave to defend is to be granted or where defence is taken by the defendant with the sole object to gain time, then Court might insist upon some condition. By now it is also well established that grant of leave is not a matter of course or of right, rather the defendant has to show/disclose a plausible defence, which may give rise to a triable issue and if he succeeds then leave to defend is to be granted unconditionally; plausible defence which gives rise to triable issue must be cogent, fair, bona fide, reasonable and disclosed upon an affidavit. Apart from the above, Court at the time of determining the factum of plausible defence, has to consider substantial question of law, jurisdiction of Court, complex question of limitation, instrument not properly stamped or not attested by two witnesses or the same is issued without consideration or element of fraud requiring inquiry. However, if plausible defence is not made out, then leave may be refused and suit be decreed. It is worth mentioning that in proceedings under Order XXXVII, C.P.C., the conduct of the defendant is very much relevant in granting or refusing leave to appear and defend the suit.

12. In the present case, the trial court has considered the defence of the petitioner/defendant that neither he obtained any amount from the respondent/plaintiff mentioned in the plaint or executed the pronote and receipt nor the said documents bore his signatures and thumb impressions and thus, the impugned pronote and receipt are against the law and facts, result of fraud, forgery and impersonation, besides the matter is between two real brothers, who have previous litigation pending between them and are not on healthy terms with each other and plea of fraud had also been raised and whether any property had been transferred to the petitioner by the respondent resulting in issuance of pronote is also in issue and on the basis of those facts it was observed by the trial court that the petitioner had raised a plea, whereby he had categorically refuted the claim of the respondent, which for its determination requires grant of leave to defend. It means that the defence plea raised by the petitioner was treated as plausible. However, while doing so the court has imposed a condition for deposit of surety bond equal to the amount claimed without considering the circumstances of the case and plausibility of defence raised by the petitioner. The order to the extent of imposition the afore-mentioned condition does not appear to be based on sound reasoning and judicious application of mind and appears to have been passed merely on the basis of request of the respondent, hence, does not appear to be passed on the basis of proper exercise of jurisdiction by the trial court and for the said jurisdictional defect, the same is not sustainable to that extent.

13. In view of the above, by allowing this petition, the impugned order dated 30.07.2024 is set-aside with the observation that unconditional leave to defend shall be granted to the petitioner, however, as learned counsel for respondent states that matter may be delayed by granting unconditional leave to defend, therefore, in view of the judgment titled as Syed Saeed Muhammad Shah and another v. The State (1993 SCMR 550), this Court deems it appropriate to issue a direction to the concerned trial court to expeditiously conclude the trial of the case without granting unnecessary adjournments to either of the parties and while doing so prejudice is not caused to rights of any of the parties by keeping in view both the time tested principles of law that justice delayed is justice denied and justice hurried is justice buried so balance is to be struck between the afore-mentioned two principles. MQ/A-9/L Revision allowed.