' By the present revision application under section 115 of the Code of Civil Procedure, the applicant Nazim seeks to impugn an order of the learned VIII Additional District Judge, Karachi, dated 12th May, 1979 in Suit No, 170/76 filed by respondent Habib Bank Ltd. Against him (the applicant) and co- respondent Mohammad Zafar Khan. By the said order leave was granted to the applicant to defend the suit on furnishing security in the sum of Rs, 30,000.
2. I have heard Mr. Aziz Khan for the applicant and Mr. Ibrahim Pishori for the respondent Habib Bank Ltd. Co-respondent Muhammad Zafar Khan had not been served and by an order on 8th August, 1979 the revision application was dismissed against him as the applicant did not seek any relief against the co-respondent. For the sake of convenience the respondent Habib Bank Ltd. Is referred to hereinbelow as the plaintiff, applicant Nazim as the defendant and respondent Mohammad Zafar Khan as the co-defendant.
3. The brief facts of the case are that the plaintiff filed a suit under Order XXXVII, rules 1 and 2, C.P.C.
Against the defendant and co-defendant for recovery of sum of Rs, 29,407.10. The defendant and the co-defendant had a current account No, C D-5037 with the plaintiff-Bank and in June, 1973 they approached the plaintiff-Bank for a loan of Rs, 20,000. Both the defendants executed a demand promissory note on 7th June, 1973 as collateral security. The co-defendant had by way of further security executed hypothecation agreement in respect of a car bearing No, K. A. G.
95. Such agreement acknowledged that the plaintiff had purchased the said car and let it out to the co-defendant under a Hire-Purchase Agreement. As further security the co-defendant also caused an endorsement to be made in the registration book relating to the said car to the effect that the vehicle described in the said book was held by the person registered as the owner under hypothecation agreement. The plaint further averred that in spite of the hypothecation the co- defendant had disposed of the same car and instead deposited another registration book of another car bearing No, K. A. G.
4708. Again on 21st December, 1973 the defendant and the co-defendant conceded the liability and executed a letter promising to pay or adjust the total dues against them by monthly instalments of Rs, 1,000. On being unable to obtain the amount advanced to the defendant and co- defendant the suit was filed by the plaintiff in November, 1976. While the co-defendant could not be served the defendant/applicant filed an application under rule 3 of Order XXXVII seeking unconditional leave to defend the suit. In the affidavit in support of the application it was stated by the defendant that he had retired from original firm in which he was a partner so that the defendant had been absolved of liability. The defendant however deposed in the affidavit that on his request the joint account held in the plaintiff-Bank was allowed to be operated by the Bank as the account of the codefendant? Alone and is the Account Opening Form his signatures were cancelled by the Bank and an endorsement was made that the account was to be operated singly by co-defendant. On such premises the defendant applicant contended that he had been absolved of the liability by the plaintiff bank. No counter-affidavit was filed by the plaintiff-Bank to deny or dispute such assertion of the defendant.
4. The impugned order is mostly concerned with the question whether the application for grant of leave to defend the suit was within time and on that point the trial Court held that the same had been made within time. In regard to the merits of the case relating to grant of leave to defend the suit all that the learned Additional District Judge has stated Is a single sentence reading as follows :- "There is word against word and oath against oath."
' It may be stated that while the defendant bad made an affidavit in support of the application for grant of leave to defend the suit no counter-affidavit had been filed and therefore the impugned order when it states that the case was one of oath against oath is factually incorrect.
5. Mr. Aziz Khan, the learned Advocate for the applicant/defendant has contended before me that this was a fit and proper case in which leave to defend should be granted unconditionally. It seems that the defendant had not been able to furnish security and successive requests were made by him before this Court to extend the time for furnishing security but the fact of the matter is that the security has not been furnished yet. The applicant/defendant has however given an undertaking that in case unconditional leave is granted, pending the disposal of the main suit he would not part with possession of his office located in room No, 143 of Hotel Metropole Bldg., at Karachi and his residential accommodation on plot 203 in Gold Street, Garden East, Karachi.
6. Mr.- Aziz Khan has contended that this suit was not based on a promissory note because while the promissory note stated that the amount stated in his promissory note was payable on demand the plaintiff-Bank had allowed the benefit of instalments. Additionally Mr. Aziz Khan has contended that the plaintiff bank accepted a hypothecation of the co-defendants' car. It is also contended that the plaintiff-Bank by allowing the co-defendant to operate the account singly and cancelling his name on the account opening form bad absolved him of the liability. The earned Advocate for the applicant/defendant has invited my attention to an order of my learned brother S. A. Nusrat, J.
In suit No, 630/78 on the original side of this High Court to raise a plea that Order 37 could come into operation only when the plaint discloses "an open and shut case" roar the plaintiff to prove and the defendant to defend, with reference to the instrument relied upon in the plaint and no more. He has contended that if the suit is based on documents other than pronote Order 37 would of apply.
In that suit S. A. Nusrat, J, had allowed the case to proceed s a regular cause and not as a summary suit. Mr. Aziz Khan has also referred to an order of Ghulam Rasool Shaikh, J. Suit No, 113/71.
In a case the learned Judge was considering the scope of Order XXXVII. He learned Judge has in the judgment stated as follows :- "In order to entitle the plaintiff to elect to file such a suit, it is a condition precedent that the claim must be based on the aforesaid documents alone and no other claim can be included in such a suit. If this condition is not fulfilled, no option is available to the plaintiff much less the summary procedure prescribed by the rule can be adopted but the suit must be filed under the ordinary procedure."
4r. Aziz Khan has however not prayed for the relief that suit should ordered to be tried as a regular suit and not a summary suit. He has only prayed that he may be allowed to defend the suit unconditionally though on giving an undertaking by the defendant as stated above. r. Aziz Khan has however referred to the Supreme Court judgment in the case of Fine Textile Mills Ltd., Karachi v.
Haji Omer (1),Continental Syndicate of Trade v. The International Express Co. Ltd. (2). To set up a case that the normal rule is to permit leave to defend unconditionally (1) PLD 1963 S c 163 (2) PLD 1959 Kar, in cases where the defendant discloses some plausible defence or the defence shows that there is some substantial question of law and fact which needs to be tried. Mr. Aziz Khan has particularly relied on the following passage appearing in the Supreme Court Judgment which is quoted below:- "In a suit of this nature where the defendant discloses upon his affidavits facts which may constitute a plausible defence or even show that there is some substantial question of fact or law which needs to be tried or investigated into, then he is entitled to leave to defend. What is more is that even if the defence set up by vague or unsatisfactory or there be a doubt as to its genuineness, leave should not be refused altogether but the defendant should be put on terms either to furnish security or to deposit the amount claimed in Court."
' Mr. Aziz Khan has also invited my attention to a case from Indian jurisdiction reported in AIR 1958 SC 321. In this case the test laid down by the Supreme Court of India is to the effect if a triable issue emerges out of the case set up by the defendant leave may be granted unconditionally. On the other hand Mr. Ibrahim Pishori has urged before me that the defendant has neither denied the execution of the Pronote nor denied the receipt of consideration. He has stated that in fact the defendant and co-defendant had a joint account until December, 1973 and therefore the liabilities as standing on the day when the plaintiff-Bank allowed the co-defendant to operate the account singly would continue to remain the liability of the defendant. In regard to the letter of instalment Mr. Ibrahim Pishori has submitted that this was just a matter of convenience in repayment and the acceptance by the plaintiff bank of such condition touching repayment did not absolve the defendant from his liability.
7. The question that deserves consideration is whether there is a plausible defence underlying the case of the defendant and whether there is a substantial issue of fact or law involved in the case. If the defendant has a plausible case based on averments of fact or law contained in his defence he would be entitled to unconditional leave to defend the suit. In the present case the two judgments of S. A, Nusrat, J. And Ghulam Rasool Shaikh, J. Delivered on the original side of this Court would seem to lay down a principle that a suit under Order XXXVII lies only when the case of plaintiff stands on a document mentioned in Order XXXVII of the Code of Civil Procedure. In the present case there is also a document o hypothecation of Car executed by the co-defendant in favour of the plaintiff, as also a letter of instalments whereby the basic character of the promissory note requiring payment on demand has been varied and the co-defendant was allowed to operate account singly in spite of out-standings. In such circumstances it would be proper if the order of the trial Court is varied to the extent that leave is granted to applicant defendant to defend the suit on the undertaking that he shall not dispose of his residence and office until the disposal of the suit and satisfaction of the decree that may be passed against him. With such modification in the order of the trial Court this revision application stands disposed of. There shall be no order as to costs.