1. This is a suit for recovery of Rs. 5,050,000 under Order (XXVII Civil Procedure Code. The facts necessary for the disposal of the suit are that the defendant was appointed as Special Technical and Sale Advisor on January 12, 1998. The plaintiff during the course of employment of the defendant has from time to time provided a sum of Rs. 5,450,000 to him. The defendant supplied accessories comprising 817 Mobile Antennae, 120 Base Antennae and 65 power Supplied to Punjab Police at his risk and cost, which were rejected by Punjab Police. The defendant undertook to sell the said accessories to prospective buyers at this own risk and to pay the proceeds of sale to the plaintiff against the aforesaid debit of Rs. 5,050,60. It is further stated in the plaint that after receiving the aforesaid amount the defendant remained absent form his duties from April 1, 1998.
2. The defendant on June 13, 1998 executed a Provision Note in favour plaintiff acknowledging his liabilities in the sum of Rs. 5,050,000 and also executed an acknowledgment on stamp paper and undertook to repay his liabilities on or before August, 12, 1998. The services of the defendant was terminated on June 17, 1998. The plaintiff lodged F.I.R. against, the defendant and the defendant filed civil suits against the plaintiff.
3. The summons under summary chapter were served upon the defendant, who vide C.M.A. No. 6629 of 2001 applied for leave to defend the suit unconditionally. After hearing, vide order dated 30-3- 2004 conditional leave to defend the suit subject to furnishing surety was allowed to the defendant.
4. The defendant instead of furnishing surety filed C.M.A. No. 2537 of 2004 seeking review of order dated 30-3-2004. The review application was disposed of vide order dated 17-5-2004 as not pressed and two weeks time was allowed to the defendant to furnish security. In spite of extension of time surety was not furnished and the matter was fixed for arguments/final disposal.
5. Mr. Yasin Azad, learned counsel for the plaintiff has submitted that the suit is based on negotiable instrument and the same is not disputed by the defendant. He further submits that the defendant has confirmed his liabilities by executing acknowledgment of debt and undertaking of repayment, which is also an undisputed document. He also refers to Section 118 of Negotiable Instruments Act and has submitted that presumption is in favour that all the negotiable instruments were made or drawn for consideration. His further contention is that since the defendant has failed to obtain leave to defend the suit the contents of the plaint shall be deemed to be admitted and the plaintiff is entitled to a decree without further proceedings.
6. The learned counsel for the plaintiff relied upon the following reported cases:--
(1) Naeem Iqbal v. Mst. Zarina 1996 SCMR page 1530.
(2) Haji Muhammad Siddique v. Rana Muhammad Sarwar PLD 2005 SC page 3223.
7. The learned counsel for the defendant. Choudhary Abdul Rasheed has submitted that the suit has been filed on the basis of a document which is not a promissory note as the same is written on a paper having no adhesive stamps and is hit by Section 11 of Stamp Act. He further submits that in view of Section 35 of the Stamp Act the document not properly stamped is inadmissible in evidence and the judgment and decree under Order XXXVII, C.P.C. cannot be passed. He further submits that the alleged Promissory Note at the best can be treated as Bond and the suit has to be proceeded as a long cause suit. He relied upon the following reported cases:--
(1) Muhammad Akram v Khuda Bux 2000 CLC page 759.
(2) Farid Akhtar Hadi v. Muhammad Latif Qazi 1988 CLC page 2397.
8. In rebuttal Mr. Yasin Azad, learned counsel for the plaintiff has submitted that since the defendant fails to obtain leave to defend the suit, the contention raised by him cannot be considered. He further submits that affixing of adhesive stamp is not mandatory requirement of law and the Promissory Note was properly written on a proper stamp paper and is admissible in evidence. He relied upon the following reported cases:--
(1) Muhammad Sharif v. Muhammad Hashim Paracha and another PLD 1987 Karachi page 76.
(2) Habib Bank Limited v. Chaudhry Cloth House 1991 CLC page 164.
(3) P. Moorthy v. A.R. Kothandaraman AIR 1978 Madras page 412.
(4) Somdatta v. Abdul Rashid AIR 1968 Rajasthan page 45.
9. I have heard the learned counsel for the parties and perused the record.
10. No-doubt the defendant has failed to obtain leave to defend the suit. However, the Court is required to apply its mind to the facts and documents before passing any order or judgment notwithstanding the factum that no person has appeared before it to oppose such an order or that the person, who wanted to oppose, was not allowed to oppose because he failed to fulfil requirement of law. The contention of Mr. Yasin Azad, Advocate is that the contention raised by the defendant cannot be considered has no force.
11. The learned counsel for the defendant has challenged the Promissory Note on the ground that it has not been written on a paper containing adhesive stamp and referred to Section 11 of the Stamp Act in support of his contention. Section 11 of Stamp Act provides use of adhesive stamps, the same reads as under:-- "11. Use of adhesive stamps.--The following instruments may be stamped with adhesive stamps, namely:--
(a) instruments chargeable with the duty of one anna [or half an anna], except parts of bills of exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange and promissory notes drawn or made out- of (Pakistan);
(c) entry as an Advocate, wakil or attorney on the roll of a High Court;
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other body corporate."
12. From bare reading of the above provisions, it is clear that the provisions are directory and permissive in nature and are not mandatory. The Promissory Note can be written on a paper having adhesive stamps and can also be written on a stamp paper and only because Promissory Note was not written on a paper having adhesive stamp does not lose its utility as Promissory Note.
13. In the reported case of Muhammad Sharif v. Muhammad Hashim Paracha PLD 1987 Karachi page 76 the learned Single Bench of this Court has held as under: "Mr. Kanwar Mukhtar Ahmad, the learned counsel for the defendant, has specifically referred. to Section 11 and contended that according to this provision of law promissory note executed or made out of Pakistan can be stamped with adhesive stamp, but other promissory notes made in Pakistan cannot be stamped with adhesive stamp. The provision of Section 11 is directory and permissive as the words used are that the following instruments 'may' be stamped with adhesive stamp. It does not prohibit nor impose restriction that promissory notes of any other value cannot be stamped with adhesive stamp. This reasoning finds support from rule 13 read with Article 49 as amended by the Sindh Finance Ordinance VI of 1982 which permit fixation of adhesive stamp on promissory note even in cases where amount exceeds Rs. 2,50,000."
14. In another reported case of Habib Bank Limited v. Chaudhry Cloth House 1991 CLC page 164 the learned Single Bench of this Court has held as under: "The expression used in rule 13 of the Rules is 'may'. The rule is merely a permissive one, permitting the use of adhesive stamp on promissory notes payable on demand when the amount in any other case is rupees ten. The rule does not lay down that such promissory note shall be stamped with adhesive stamp of the requisite value.
15. The result is that a provisionary note in any other case can be written on a paper having an impressed stamp or it can be stamped with special adhesive stamps of the requisite value. In my view promissory note can be stamped either with special adhesive stamp or adhesive stamps or engraved on a stamp paper of proper value."
16. The judgment reported in case of Muhammad Akram v. Khuda 2000 CLC page 759 dealt with a situation where document affixed with adhesive stamps were not properly cancelled and was rendered inadmissible in evidence and is not applicable to the present case.
17. The other reported case of Farid Akhtar Hadi v. Muhammad Lati, Qazi 1988 CLC page 2397 was dealt with a case of grant of leave on the ground that the document on the basis of which the suit was instituted was not a promissory note, but was a bond, and as such, the suit was no maintainable and leave to defend was granted, which was challenged in this revision.
18. The Indian views expressed in the above mentioned reported case are that in view of word 'may' used in Section 11 and Rule 14 the Promissory note of any value can always be written on impressed stamp paper and call be stamped with adhesive stamps.
19. In view of the above reported judgment, it is clear that it is no necessary that the Promissory Note must be affixed with adhesive stamp and a Promissory Note written on a stamp paper is as good as written on paper containing adhesive stamps.
20. As far as Section 35 of the Stamp Act is concerned, the same shall only be pressed into service when an instrument not duly stamped in produced in evidence. In this case since I have already held that the promissory note is properly stamped. Section 35 is not applicable.
21. Since the suit has been filed under summary chapter of the Civil Procedure Code, the Order XXXVII sub-rule (2) of rule 2 provides the where the defendant fails to appear or obtain leave to defend or fulfill the conditions on which the leave was granted, the contents of the plaint shall deemed to be admitted and the plaintiff shall be entitled to a decree. The plaintiff while producing the promissory note and acknowledgment of del and undertaking of repayment has proved that the promissory note we executed against consideration. The presumption is also in favour of the negotiable instrument that the same was made and drawn again consideration. There is no rebuttal to the above facts, as the defendant, spite of getting opportunity to defend the case, has failed to file any defence.
22. In the reported case of Haji Ali Khan and Company v. Allied Bank of Pakistan Limited PLD 1995 Supreme Court page 362 the Honourable Supreme Court has held as under: It may also be noticed that sub-rule (2) of Rule 2 of the above Order envisages that if a suit is filed in terms of sub-rule (1), the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend. It further contemplates that in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree in terms of sub-clauses (a), (b) and (c) provided in aforesaid sub-rule (2). Whereas, sub- rule (3) thereof lays down that a decree passed under the above rule may be executed forthwith."
23. In the same judgment the Honourable Supreme Court after considering number of reported cases has held as under: The ratio decidendi of the above-referred cases seems to be that if a defendant fails, to appear or fails to obtain leave to defend in response to a summons served in Form No. 4 provided in Appendix B to the C.P.C. or fails to fulfil the condition on which leave was granted or where the Court refuses to grant leave, the Court is to pass a decree. It may further be observed that in sub- rule (2) of rule 2, C.P.C., it has been provided that if a defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree, but no such consequences are provided for in Rule 3 of the above Order in a case where the Court refuses to grant leave or the defendant fails to fulfil the condition on which leave was granted. In our view, notwithstanding the above omission in Rule 3, the effect of refusal of the Court to grant leave to failure on the part of the defendant to comply with the condition of the leave, will be the same i.e. the defendant shall not be entitled to defend the suit on any ground and the Court would pass a decree in favour of the plaintiff."
24. In view of the above, the plaintiff has proved that the defendant has executed a promissory note and has failed to repay the amount mentioned in the promissory note. I have, therefore, no option but to decree the suit of the plaintiff in the sum of Rs. 5,050,000 with interest at the rate of 6% from the date of the suit till realization of the amount. The defendant is also liable to pay the costs of the suit to the plaintiff. The office is directed to prepare the decree in the above terms.