' SYED HAMID ALI SHAH J.---Shaukat Naeem Ahmad remained involved in fraudulent activities, in the course of his employment with the appellant, as Manager of Satayana Road Branch. The appellant-Bank lodged an F.I.R No,615 on 30-9-2007, wherein it was inter alia reported that Call Deposit Receipts (CDRs) Nos.1316901 to 1316910 and 1316913 to 1316917, were missing from the bank record. Bank filed a suit in respect of these CDRs and sought cancellation of these CDRs, which is pending in the Civil Court.
2. Respondent on the other hand filed a suit for recovery of Rs,75,00,000 with interest, on the basis of these CDRs, under the provisions of Order XXXVII C.P.C. Learned Court refused to grant the appellant, leave to defend the suit and observed that defence, as set up by the appellant, in the application for leave to defend the suit, is fake and without any material to support. Learned Court deemed the assertions of the plaint as admitted and decreed the suit as prayed for, vide judgment and decree dated 8-3-2008, hence this appeal.
3. Learned counsel for the appellant has contended that learned trial Court while passing the impugned judgment and decree, has ignored that the appellant has already filed a suit for the cancellation of CDRs and the suit was not liable to be decreed unless genuineness of these documents is proved. Learned Court has passed the decree on the basis of photocopies without receiving the original CDRs on the record. The case of the appellant was that the respondent in league with the Branch Manager, illegally removed from the record, the CDRs, the same are missing and were not validly issued. Learned counsel added that allegations of fraud need determination through evidence and in this regard the appellant made a case for grant of leave. It was contended that CDR is not a promissory note, nor a negotiable instrument, therefore, the suit of the plaintiff/respondent under Order XXXVII, C.P.C., was not competent. He added that learned Court has failed to comprehend that suit of the respondent was liable to be stayed under section 10 of C.P.C. Or in the alternative both the suits were to be heard and consolidated. Learned counsel in support of this contention has relied upon the case of "M.L. Traders through Proprietor and others v. Judge Banking Court-IV, Lahore and 2 others" 2007 CLD 634. Case of "Muhammad Aziz ur Rehman v. Liaqat Ali" 2007 CLD 1605 was referred to contend that burden of proof of non-payment of consideration in respect of negotiable instrument, the execution whereof is admitted, lies on it's executant. He went on to argue that controversy cannot be resolved on the basis of the pleadings of the parties and the pleadings are not a substitute of evidence and found support from the law laid down in the case of "Sh. Hakim All v. Punjab Small Industries" 2007 CLD 1637. He has also contended that a CDR is issued to an account holder and the respondent was not maintaining any account with the appellant-Bank. He summed up his argument with the contention that a cheque or negotiable instrument obtained through fraud has no value and suit based on such negotiable instrument has only fate i,e, dismissal of suit and in support of this contention referred to the case of "Malik Muhammad Faisal v. State Life Insurance Corporation" 2007 CLD 943.
4. Mr. Muhammad Ali Qureshi, learned counsel for the respondent, stood behind the impugned judgment and decree and supported the same with full vehemence. He has contended that question of validity of the CDRs, was examined by inquiry officer Paved Sharif, Customer Service Manager) who after thorough scrutiny found the issuance of CDRs, in the normal course of banking and opined that same were genuinely issued. Learned counsel emphasized that once issuance of the CDRs is held by the bank a valid transaction, it cannot be claimed as fake and fraudulent, subsequently. The appellant is estopped by his own conduct to contest the genuineness of these CDRs, He added that principles of approbate and reprobate will apply to the case in hand. Learned counsel has referred to the provisions of Section 4 of the Negotiable Instruments Act and submitted that Call Deposit Receipt is a negotiable instrument and the suit in the summary jurisdiction has rightly been filed. Learned counsel then submitted that since the CDRs were validly issued and the defence of the appellant for grant of leave was found fake, therefore, the Court has rightly decreed the suit. Learned Court while passing the impugned judgment and decree discussed all the aspects of the controvery. The decree was passed after proper appraisal of documents on file and genuineness of claim of the plaintiff was thoroughly examined. Learned counsel has concluded his arguments by the contention that both suits were not liable to be consolidated as the nature, procedure and jurisdiction of Courts, in both the suits is distinct.
5. Heard, learned counsel for the parties and record perused.
6. Respondent has claimed an amount of Rs,75,00,000 on the basis of fifteen (15) Call Deposit Receipts of the value of Rs,500,000 each. The receipts are signed by the Manager of the Branch with another Officer. The dates of issuance as endorsed in these receipts, are 25-9-2007 and 27-9- 2007. Respondent presented these receipts but the encashment thereof was refused, which led the respondent to file the suit, subject matter of this appeal. Case of respondent is that the receipts were issued in the course of normal banking business, by the manager of the bank. The respondent/plaintiff cannot be held liable for a fraud, which the employee has committed. It is vicarious liability of bank to repay the amount of Call Deposit Receipts. More so, when on scrutiny by another official of bank, these CDRs were found genuine and transaction was found valid. The appellant-Bank on the other hand has taken the stance that the respondent and ex-Manager of the branch were in league and as a result of fraud the receipts were stolen and delivered to the respondent. The issuance of CDRs was invalid and the delivery thereof is without any lawful consideration. Learned trial. Court found the stance of the appellant as fake and declined the grant of leave to defend the suit. The application of the appellant for leave to defend the suit, was rightly declined in the above background, will be first question, we would like to answer.
7. The question of grant of leave to defend the suit, was considered by the Court and there is plethora of case-law on the subject. The issue was examined, in following cases, as under:--
(i) In the case of Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 the apex Court has held that a Judge while deciding application for leave to defend, is not to try the action, he is to see that there is bona fide allegation of triable issues.
(ii) In the case of "National Bank of Pakistan v. Messrs Flegzender and Company and 2 others" PLD 1987 Lahore 290, it was held that the defendant has only to disclose a plausible defence which may give rise to a triable issue and he has not to establish that defence disclosed by him is one which was likely to succeed at the end of the trial.
(iii) In the case of "Messrs Bhera Food Grain Corporation and 9 others v. Muslim Commercial Bank"
1987 CLC 1843, the defendant sought leave on the ground that the documents appended have been forged by the bank with ulterior motive and the cheques were never issued. It was held that the defendants having raised substantial questions of law and facts were entitled to defend the suit unconditionally.
(iv) In the case of "Messrs Chaudhri Textile Mills and others v. United Bank Limited" 1987 CLC 1957, it was observed that defence put up by the defendant is enough to perceive that grounds raised form plausible defence to displace rebuttable presumption, attached to bank documents.
(v) In the case of "Messrs United Bank Limited v. Messrs Okara Trading Company and others" 1998 MLD 921, a partner notified the factum of dissolution of the firm and subsequently the bank continued to deal with other partners of firm, leave was granted to outgoing partner.
(vi) In the case of "Messrs Bashir Engineering Industries and 3 others v. The Muslim Commercial Bank Ltd. And another" 1988 CLC 941, goods were not shipped and amount was released on the basis of fake and fraudulent documents, pertaining to Letter of Credit. It was held that substantial question of law was raised. The Court observed that when some questions of law and facts, which need to be tried or investigated into; are raised, entitle the applicant for leave to defend the suit.
(vii) In the case of "Habib Bank Limited v. Mussarat Ali Khan" PLD 1987 Karachi 86, grievance was pertaining to the fraud committed by the officer of the bank. It was observed by the Court that instances of the fraud committed in the bank accounts by the bank officials are compelling circumstances for which the Government has established special tribunals, for the cases of bank fraud. It was further observed that sanctity of account maintained by the bank is impaired and the Court should act liberally in the matters of grant of leave.
(viii) In the case of "Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas)" Ltd. And another" PLD 1996 SC 749, the apex Court enunciated that whether the facts disclosed by the defendant in affidavit make out onus to prove the document, which is the basis of the suit. Leave is refused when the Court finds that defence disclosed by the defendant in affidavit in support of application for leave to defend is illusory or lacking bona fides or intended to delay the proceedings or is based on allegations of vague and general in nature relating to misrepresentation, fraud and coercion without supporting material.
(ix) In the case of "Zohair Akhtar v. Jawad Adil" 2006 YLR 1510, it was held that defence may be weak in nature but it cannot be said to be vague or illusory, when without recording of requisite evidence on factual issue raised by defendant, the matter could not be adjudged.
(x) "Messrs Ark Industrial Management Ltd. v. Messrs Habib bank Limited" PLD 1991 SC 976, Honourable apex Court enunciated in this case that Court can grant leave upon affidavits in support of application which discloses such facts as would make it incumbent on the holder to prove the consideration or such other facts, as the Court may deem sufficient to support the application.
8. The above survey of law brings us to conclude that while granting leave to defend the suit, the Court is to see that triable issues have been raised and defence put up by the defendant is fair, bona fide and reasonable. While examining so the Court is not to see that the defence put up will succeed at the end of the trial. The Court should act liberally (which does not mean generously) in the matter of granting leave to defend the suit. The facts or the plausible defence, has to be disclosed upon affidavit and appraisal of whole evidence or correctness of averment in affidavit, are not required to be examined with minute details, when the application for leave to defend is under consideration. Leave is refused or it is granted subject to condition when the Court finds the defence is illusory or sham, liability and execution of the negotiable instrument is admitted. When allegation of fraud, forgery or fabrication of negotiable instrument is pleaded, it makes a plausible defence, the applicant/defendant in such circumstances is granted leave to defend the suit. As authority for this proposition, reference can be made to the cases of "M. Sarwar Ghani v. Muslim Commercial Bank Limited" 1989 ALD 34 and "Abdul Malik K. Lakha through legal heirs v. Abdul Karim K. Kara" PLD 2004 Karachi 399.
9. Viewing the case of the appellant from the above angle, we find that the appellant has stated in his application that the respondent was party to fraud and stolen CDRs were subsequently filled and completed. There was no consideration or payment with regard to these receipts. Lodging of F.I.R and filing of suit in the Court of competent jurisdiction further Csupport the contention. The allegation of fraud is not merely a bald allegation and the allegation of fraud cannot be determined summarily because it needs recording of evidence. The matter Dwhere the controversy needs it's resolution, through evidence, Egrant of leave to defend the suit, is the right course. We are, therefore, clear in our mind that the case in hands is a fit case, for the grant of leave to defend the suit and learned Court has refused the same erroneously. We, therefore, grant leave to F defend the suit, subject to furnishing of bank guarantee of an amount equal to the suit amount.
10. We will now revert to the second contention of the appellant that Call Deposit Receipts are not negotiable instrument and suit under Order XXXVII is not competent. The contents of the CDR, are reproduced here under for ready reference:-- Allied Bank Call Deposit Receipt CDR No.1316901 ABL Satiana Road Faisalabad (0245)Date 25-9-200 ' Received from Khalid Rupees Five lac only.
' As a deposit at call bearing no interest subject to general rules of the Bank with respect to such deposits. Rs,-500000 Officer Manager.
' When payment is required, this Receipt must be returned to the Bank duly discharged by the Depositor under the words "Received Payment."
11. It is evident from perusal of the above receipt that it is an unconditional promise, signed by the maker (Branch Manager and an Officer) contains a promise to pay a certain sum of money and the same is payable on demand/ presentment to payee only. The sum is mentioned, the maker and the payee are certain. The instrument is, therefore, a promissory note, as envisaged in section 4 of the Negotiable Instrument Act, 1881.
CDR can be issued to a person who may not be an account-holder of the Bank. A reference to Clause 35, Part IV of ABL Book of Instruction will be advantageous, wherein it is contained that Call Deposit Receipts are issued against cash or through Transfer Order (B.53-3), Clause B.53-4 provides that where the depositor is not maintaining his personal account, then payment may be made on counter, after proper verification. These instructions defy the stance of the appellant that CDR is issued only to the account holder of the bank. Call Deposit Receipt is a Negotiable Instrument within the contemplation of section 13 of the Negotiable Instrument Act, 1881, and it can be issued and delivered to a person even if he is not maintaining bank account with issuing bank.
Learned trial Court has correctly held the CDRs, as Promissory Notes and assumed jurisdiction rightly. The findings the Court in this regard are affirmed. The finding of learned trial Court whereby consolidation of suits as well as the stay of proceedings in the subsequent suit, is not open to exception. For, the nature, procedure and jurisdiction of Court, in both the suits is distinct.
12. For the foregoing, the impugned judgment and decree is set aside, the appellant is granted leave to defend the suit. Resultantly, the suit of the plaintiff/appellant is deemed to be pending before the trial Court. Learned trial Court will examine and determine the question of validity of the Call Deposit Receipts and the truthfulness of the allegations that CDRs in question were procured through fraud by the respondents, in collusion with the former bank manager.
' Learned Court will decide the matter after receiving the written statement on the record and after recording evidence of the parties through proper trial.
13. The respondent has emphasized that other victims of the fraud of ex-Manager of the branch, have been accommodated, while the respondent is being deprived of his hard earned income on flimsy grounds. Feeling anxiety of the respondent, we direct the trial Court to decide the matter as expeditiously as possible but not later than three months. Learned Court will not grant unnecessary adjournments to either party.
14. Partly accepted.