1. ' Appellant has filed this civil appeal under section 96, C.P.C. Against the judgment dated 3rd July, 2003 and decree, dated 8th July; 2003 passed by learned District Judge, Karachi South in Suit No,21 of 2002, which was filed by respondent Javed Akhtar under Order 37, rule 2, C.P.C. For recovery of amount of Rs,7,55,000.
2. ' Heard Mr. Zaheer Minhas for appellant and Mr. S. Ali Ahmed Tariq for respondent also perused the R&P of this case.
3. The certified copy of the decree filed by the appellant indicates that it was signed by learned trial Judge on 8th July, 2003, appellant applied for its certified copy on 21st July, 2003, whereas fees was estimated on 31st July, 2003 for the same which was deposited on the same date, and the copy was ready on 1st August, 2003, while stamp was supplied on 2nd August, 2003, on which date the certified copy was supplied to the appellant, who presented memo. Of this appeal in this Court on 16th August, 2003; thus, computing the time which lapsed in between making of the application and estimation of the cost/fees, the memo. Of appeal was presented within the prescribed time limit.
4. The facts giving rise to the filing of the present appeal are that plaintiff/respondent, in his suit under Order 37, rule 2, C.P.C., bearing No,21 of 2002, asserted that defendant/appellant being his old friend and having cordial family relations, approached the plaintiff/appellant on 1st December, 2000 with a request to advance him a friendly loan of Rs,7,55,000, with a promise to return the same within 6/7 months from the receipt thereof; as he had pleaded some personal problem, therefore, the plaintiff/respondent advanced the said friendly loan, amount on the same date; on 7th December, 2003 a Cheque bearing No,CAL-44053 dated 7th December, 2000 for the said amount, drawn at the Oman International Bank SAOG, I. I. Chundrigar Road, Branch Karachi was issued by the appellant from his account and the plaintiff/respondent received the same, having been assured that the cheque would be encashed on presentation thereof before the said bank branch, in the last week of the month of July, 2001, but when on 24th July, 2001 the said cheque was presented by him before the said bank branch, payment was not received against the same; hence the defendant/appellant was approached by him for payment of the amount against the said cheque, but he declined and refused to pay the same, despite issuance of legal notice to him; hence the suit was filed under Order 37, rule 2, C.P.C. By the plaintiff/respondent. The defendant/appellant, in his application under Order 37, rule 3, C.P.C. Pleaded that he was carrying on the business of spare parts of automobile and was having friendly business relations with the plaintiffs/respondent and used to take spare parts of the vehicles from the plaintiff, on the agreement that the amount against such supply of the spare parts was to be paid after three months and to ensure such payments, defendants/appellant used to issue cheques in favour of the plaintiff and whenever any such payment was made to the plaintiff in cash, the plaintiff used to return back the cheque so issued by the defendant; the cheque involved in the suit was also issued by the defendant as guarantee for payment against receipt of the spare parts for the automobiles, but then he made the payment in cash against the amount shown in the said cheque, and requested the plaintiff to return back the disputed cheque, he raised a pretext that it got misplaced; because the defendant had cordial business relations with him for many past years and the cheque itself was crossed one, he did not insist for the return of the cheque; thereafter also, the defendant continued to have the business relations with the plaintiff of the same nature till 9th February, 2003, when he was informed by a friend that a summons was got published by the plaintiff pertaining to the suit in hand; on inquiry from his banker, he was informed that plaintiff/respondent had presented the disputed cheque for encashment, but because it was bearing the date of issue of more than past six months, therefore, the payment was declined against the same, the same being "the stale cheque".
5. ' The learned trial Judge granted the application under Order 37, rule 3, C.P.C. Conditionally with a direction to the defendant/appellant to furnish a guarantee in the sum of Rs,7,55,000, who could not furnish the same, and filed revision application before this Court against such conditional order, which was still pending decision, when the learned trial Judge observed that because the defendant/appellant failed to comply with the said order of furnishing of the bank guarantee, therefore, he directed to proceed with the suit exparte then vide impugned judgment, dated 3rd July, 2003 he decreed the suit (followed by the decree dated 8th July, 2003).
6. ' Learned counsel for appellant has placed on record a certificate issued by the Oman International Bank SAOG, Karachi Office dated April 16, 2004, wherein it is certified that the disputed cheque was presented before it on 24th July, 2001 and because the said cheque stood expired, having been presented after a period of six months from the date of its issue, the bank officers returned back the same with the reason "stale cheque".
7. Learned counsel for appellant has cited Habib Bank Ltd. v. Jamilur Rehman 1994 MLD 271 herein a learned Single Judge of this Court heard the case of a similar nature, on the point of presentation of the cheque before the concerned bank, after the expiry of six months from the date of its issue, and held that wherever the cheque/draft is not presented within six months of its issue the same would become out of date or stale and the suit based on such a cheque cannot be decreed.
8. ' Learned counsel for plaintiff/respondent has cited Messrs Karachi Bonded Stores Ltd. v. Trustees of the Port of Karachi 1999 MLD 3214 wherein his Lordship Honourable Mr. Justice Hamid Ali Mirza (as his Lordship then was), was pleased to observe to the effect, where the suit for recovery of money under Order 37, rule 3 is based on the cheque but was dishonoured a presumption would be that said cheque was executed for consideration shown therein, and that no plausible defence having been taken in the counter-affidavit filed by the defendant of the said case, leave to defend the suit was held having been rightly refused, in such circumstances; with utmost respects and regards, the facts and circumstances of the said case do not appear to be identical to the one in hand, for the simple reason that the question as to whether or not cheque was not encashed for the reasons of its being "stale" does not appear to have been extensively dealt with in the said reported case; so also, learned counsel for plaintiff/respondent has cited Retd. Colonel Ashfaq Ahmed and others v. Shaikh Muhammad Waseem 1999 SCMR 2832 wherein Honourable Supreme Court of Pakistan was pleased to hold that the borrower did not dispute execution of the cheque but expressed that said cheque was not intended to be encashed/honoured and, therefore, initial conditional order granting leave to defend the suit and to furnish bank guarantee passed by the trial Court did not suffer from any material defect and that where the defendant failed to fulfil such conditional order, granting leave to defend the suit, the trial Court was justified in passing the decree against the defendant; in the said reported case also, the question as to whether the disputed cheque was dishonoured as a "stale cheque" does not appear to have been dealt with by Honourable Supreme Court and therefore, its facts and circumstances do not appear to be identical to those of the case in hand.
9. ' In United Bank Limited Mianwali v. Muhammad Khan and another PLD 1988 Lah. 424, learned Lahore High Court was pleased to record following observations at page 427:-- "The main contention of the learned counsel for the appellant is that even if the pronote produced by them was not admissible in evidence the suit could not be thrown out by the learned trial Court.
10. The pronote bears the requisite revenue stamps but the same are not cancelled in accordance with law. The learned counsel for the appellant does not dispute that the said pronote is not admissible in evidence. However, he contends that sufficient evidence was available on record to prove the case of the appellant even if the said pronote was altogether excluded from the evidence. It may be pointed out that the learned trial Court recorded all the evidence on all the issues reproduced above. It is on the basis of the said evidence that he argues that the appellant succeeds in proving his case. Before entering into the question of fact relating to the proof of the case the point arises whether with the exclusion of the pronote the suit ought to be thrown out or could proceed on the basis of the other evidence on record. Sub-rule (1) of rule 2 of Order XXXVII of the Civil Procedure Code, 1908 is as follows:--
(1) All suits upon bills of exchange, Hundies or promissory notes, may, in case the plaintiff desires to proceed hereunder, be instituted by presenting a plaint in the form prescribed; but the summons shall be in Form No,4 in Appendix B or in such other form as may be from time to time prescribed.'
11. ' Its first three words "all suits upon" are very important. The said words mean that a suit based on a pronote can be filed under Order XXXVII, C.P.C. And can be dealt with thereunder. However, the said rule does not say that it should be on a pronote which is valid according to law or which has been executed according to law or which is inadmissible in evidence according to law. Similarly it does not say that the suit cannot proceed on any other evidence apart from the concerned pronote. This would mean that a suit on the basis of a pronote can be filed under the said order and can be tried under the 'provisions thereof irrespective of the fact whether the pronote is admissible in evidence or not. However, if the suit is based only on the pronote and not on any other evidence and the pronote is found to be inadmissible the suit will obviously fail even if witnesses to prove the said pronote have been produced. However, if in a case where apart from a pronote which is inadmissible in evidence there is independent or sufficient evidence to prove the loan or debt the Court cannot throw out a case altogether. The Court has to exclude the pronote from the evidence because of its inadmissibility and has then to weigh the evidence to find whether it can independently suffice to prove the case or not. A perusal of the evidence will show that there was sufficient evidence on record, apart from the pronote to prove the case of the appellant. Therefore, the learned trial Court could not dismiss the suit simply because the pronote was not admissible in evidence. Honourable the Supreme Court has in a very recent ruling entitled Sh. Abdul Majid v. Syed Akhtar Hussain Zaidi PLD 1988 SC 124 laid down that where a suit was not triable by resort to the procedure prescribed in Order XXXVII, its trial could proceed as an ordinary suit. In view of this law as well the suit of the appellant could not be dismissed. As such the finding of the learned trial Court on Issue No,1 is illegal and is reversed. The issue, as a consequence, is decided in favour of the appellant.
12. ' There is no decision of the learned trial Court on Issues Nos.2 and 3 relating to the merits of the case. However, as already stated above, whole of the evidence of the parties has already been recorded and is before us. In evidence of the parties has already been recorded and is before us. In these circumstances it will be in the interest of justice that we decide Issues Nos.2 and 3 ourselves instead of remanding the same and burdening the parties with unnecessary expending apart from facing the consequential delay. The learned counsel for the parties agrees that the issues may be disposed of now on the basis of the evidence on record. Respondent No,1 while appearing as D.W.1 denied his signatures on all the documents. Therefore, it is to be seen whether respondent No,1 obtained any loan and executed the requisite documents or not. The appellant produced Mr. Aftab Ahmed Khan, their Manager, as P.W.1 and Abdul Rahim Khan Sumbal, P.W.2 an officer of their Bank, to prove the statement of accounts of Exh.P.2, application for loan Exh.P.3, receipt form Exh.P.4, acknowledgement of loan Exh.P.5 and guarantee Form Exh.P.6. In fact, their statements are sufficient to prove the said documents. However, it may be added that on the application for loan Exh.P.3 apart from signatures of respondents Nos.1 and 2 a duly attested photograph of respondent No,1 is pasted. D.W.1 conceded that it was his photograph, but he still avoided to admit the execution. Again, respondent No,2 while appearing as D.W.3 supported the case of the appellant and stated that the said documents were executed by respondent No,1. Similarly he has stated that he asked respondent No,1 to return the loan to the appellant and he promised to do so if the interest was waived, but later did not pay back anything. He does not seriously deny his signatures on guarantee form Exh.P.6. Therefore, the documents Exhs.P.2 to P.6 read with the evidence of P.Ws.1 and 2 as also D.Ws.1 and 3, but independent of the pronote, prove that respondent No,1 obtained the loan in dispute and respondent No,2 guaranteed the payment back of the same. Accordingly, Issues Nos.2 and 3 are decided in favour of the appellant.
13. ' The suit as a result has to be decreed. However, it may be stated that the suit was filed on the basis of a. Pronote which in itself was inadmissible in evidence and the parties were, therefore, dragged into a long litigation due to a legal defect in the same which was due to the negligence of the appellant Bank. In these circumstances the Bank can neither be allowed the costs of the suit nor can it be allowed interest for the period up to the passing of the decree. He, however, is being allowed interest from the date of the passing of the decree because the same is mandatory under section 34-B, C.P.C. Accordingly, the impugned judgment and decree of the learned trial Court are set aside. A decree of recovery of the learned trial Court interest at the rate of 2% above the Bank rate from the date of this decree till realization, is passed in favour of the appellant and against the respondents. The parties shall bear their own costs throughout."
14. Following the precedent as laid down in the above quoted case reported in 1994 MLD 271, the disputed cheque having been presented after six months of its issue became "stale", and the suit based on such out of date stale cheque could not have been decreed by learned trial Court; consequently, this civil appeal is hereby allowed, impugned judgment and decree are hereby set aside; the suit is remanded to the lower Court with a direction that the same be treated to have been filed under the ordinary provisions of Civil Procedure Code and be tried and decided accordingly.
15. ' Vide a short order dated 17-1-2005 the above appeal was allowed and above are the reasons for the same.