1. ' ZAHID HAMID, J.---By this judgment the instant appeal shall stand disposed of.
2. ' The factual background as reflected from the memo of appeal is that the parties were having business dealings with each other when during course of such business the respondents were given Cheques bearing Nos.0009135 dated 25-2-2001 and 0009138 dated 10-3-2002 against invoices raised by the appellant. These cheques were dishonoured and as such the appellant filed a Suit bearing No,45 of 2003 under Order XXXVII of C.P.C. Against the respondents in the Court of learned District Judge, Karachi East. It is contended that after presentation of the suit the appellant showed original cheques to the Court which were returned after examination, with the direction that the certified copies of the same be filed. It is pleaded that the respondents filed application for leave to defend which was granted on 20-2-2004 subject to the condition of furnishing surety within ten days. However, the surety was not furnished, and the respondents applied for enlargement of time which was granted; but they failed to furnish the surety once again. However instead of straightaway passing the decree the learned District Judge, ordered ex parte proceedings and called upon the appellant to file affidavit in ex parte proof. The respondents sought permission to cross-examine the appellant which too was granted in spite of the fact that leave had been refused. On 2-8-2004 the appellant was cross-examined by the respondents, despite the objections raised in this behalf by he appellanet's counsel to the procedure adopted by the learned court in violation of subsection (2) of Order XXXVII, Rule 2, C.P.C. Finally on 23-9-2004 the learned Vth Additional District Judge, Karachi East dismissed the suit as being not maintainable.
3. ' The appellant has assailed the impugned judgment, taking exception to the; (1) non-production of original cheques, and (2) lack of authority of the Managing Partner of the appellant namely Mr. Hasan Shafi. The appellant maintained that since the original cheques were shown to the Court during the trial, and he was directed to file certified copies thereof, as such it was wrongly concluded that the appellant did not have the original cheques. These original cheques with return slips of the bank have been filed with the memo of the appeal as annexures D to D/3. Adverting to the second ground on which the suit was dismissed, i,e, lack of authority, it was contended that the learned Additional District Judge failed to appreciate that the appellant was not a company but a partnership concern and as such there was no need to produce a resolution or Articles of Association to establish locus standi of Mr. Hasan Shafi to institute the suit. Finally it was emphasized that the procedure adopted by the learned Additional District Judge Karachi East in disposing of the suit was violative of the Summary Chapter.
4. ' The learned lower court in the impugned judgment has observed that the notice of the suit was ordered and after service an application under Order XXXVII, Rule 3, C.P.C. For leave to defend was filed which was allowed subject to furnishing surety; but the same was not furnished, consequently the defendant in the suit was declared ex parte and the plaintiff/appellant herein was directed to file affidavit in ex parte proof. The learned counsel for the defendant cross-examined the appellant's witness. At the arguments stage the plaintiffs locus standi was challenged for want of power of attorney, resolution or articles of association. Maintainability of the suit for non- submission of original cheques was also assailed. It was argued before the learned lower court that since leave to defend had been declined the defendants could not raise' any objection as to the maintainability. Considering the merits the learned Additional District Judge Karachi East observed that the appellant's representative namely Hasan Shafi who appeared in the capacity of Managing Partner and attorney of the proprietor admitted in his cross-examination that he had not filed any registered documents of firm, nor documents suggesting that other partners of the firm had authorized him to prosecute the suit. It was therefore, concluded that in absence of such documents Mr. Hasan Shafi was not a properly authorized person to file the suit. Finally it was observed in the impugned judgment that original cheques were not filed nor shown at the time of filing affidavit-in ex parte proof and as such for these reasons the learned Additional District Judge Karachi East dismissed the suit as being not maintainable.
5. ' I have heard the learned counsel for the parties and perused the record. The learned counsel for the respondent invited my attention to the title of the plaint wherein the appellant has been described as; M.Muhammad Shafi and Co, a partnership concern having its office at Plot No,50, Sector No,7tA, Korangi Industrial Area, Karachi. It was contended, the plaintiff had given leather articles to the defendants and raised Invoices Nos.910 dated 1-2-2001 for an amount of Rs,5,55,478 and 915 dated 3-2-2001 for the amount of Rs,13,02,516 and 0916 dated 3-2-2001 of Rs,5,66,352.
6. Against such deliveries the defendants, it was alleged issued two cheques amounting to Rs,5,55,478 and Rs,4,00,000 and the same were dishonoured due to insufficiency of funds. Finally the defendants paid a cash amount of Rs 4,00,000 against the outstanding amount of Rs,902516 and for satisfaction of the balance the defendants once again issued a Cheque No,0009138 which too was dishonoured. The copy of the said cheque, it was pleaded was annexed and marked "C" and further it was stated that another Cheque No,0009135 for the amount of Rs,566352 was issued on 25-2-2001 against the third invoice; but the same was also dishonoured. Copy of the said cheque along with its slip was stated to be annexed and marked "D". The plaintiff/appellant herein contended that various reminders were sent to the defendants including a legal notice.
7. Responding thereto only an amount of Rs,2,50,000 was paid against first dishonoured cheque.
8. Copy of the account status was stated to be annexed and marked "E". Under the circumstances the plaintiff prayed for recovery of Rs,818868 with interest.
9. ' Looking at the R & P it would be found that afier ex parte proceedings were ordered one Hasan Shafi appeared purportedly as lawful attorney filed his affidavit-in-ex parte proof reiterating the above facts. He was allowed to be cross-examined. In his cross-examination he deposed that he had not filed any registration documents of the partnership firm or any documents to suggest that other partners of the firm had authorized him to contest the matter or appear before this Court on behalf of the firm. He admitted that the transaction in question had taken place between him and Messrs A. Rehman Enterprises and that he did not know about the status of A. Rehman enterprises if it was a sole proprietorship concern firm or otherwise. He also admitted that his claim was based on Cheque bearing No,9135 dated 25-2-2001 amounting to Rs,566352 and Cheque No,9138 dated 10-3-2002 amounting to Rs,502516 and that out of the said total sum he had received Rs,2,50,000 from A. Rehman Enterprises, the defendant No,1 . He also admitted that defendants had not issued any cheque to him for the rest of the amount of claim of Rs,818868.
10. ' On record photocopies of both the cheques in question bearing Nos.9135 and 9138 for amount of Rs,566352 and Rs,502516 are available. They have been issued as it would appear to the payee M.
11. Muhammad Shafi by some Director on behalf of Shakz International Leathers (Pvt.) Ltd. Both of the them were drawn on Standard Chartered Bank Clifton Branch Karachi and were referred back under cheque return memo to the drawer on 13-8-2001.
12. ' A legal notice dated nil by Ahmed and Qazi Associates, Advocates and Legal Consultants was addressed to the defendant No,l followed by a reminder dated 2-9-2009. Another letter dated 1-10- 2001 was addressed to Chairman Pakistan Tanners Association emphasizing that Messrs A.
13. Rehman Enterprises received the cheques from Shakz International Leathers (Pvt.) Ltd., seeking clearance of the cheque amount of Rs,1468868; but the respondents were not positively responding. This letter has been signed by Hassan Shafi, as Director. Some other letters on behalf of M. Muhammad Shafi and Co. And A. Rehman Enterprises have also been placed on record which are available in R & P. Yet another letter dated 14-11-2002 was addressed to Mian Ahsan Elahi, Arbitration Committee of Pakistan Tanners Association whereby the addressee was informed that despite his assurances the outstanding amount had not been paid by Messrs A. Rehman Enterprises and/or their sister concern. This was also signed by Hasan Shafi. Furthermore, there is another letter dated 29-11-2002 on record written by A. Rehman Enterprises and addressed to Mian Ahsan Elahi, Chairman Tanners Association, promising him with reference to letter dated 23-11- 2002 that the matter would be resolved amicably as the author was sitting in Etekaf. Another letter dated 14-5-2002 of Messrs A. Rehman Enterprises showing concern and promising to the Chairman Tanners Association that the amount of Rs,818868 due to M. Muhammad Shafi and Co. Would be cleared in September, 2002 is also annexed. All these documents, it appears were filed with affidavit-in-ex parte proof as exhibits and the same as such were admitted on record.
14. ' It is apparent that the suit was filed against A. Rehman Enterprises, Messrs Habib-ur-Rehman, Kamran Habib and Zeshan Habib. It was admitted in cross-examination that the said defendants had not drawn any cheque in favour of the plaintiff. The photocopies of the cheques on record have been issued by some Director of Shaiks International Leathers (Pvt.) Ltd., a separate legal entity. M. Muhammad Shafi and Co., sent a Legal notice dated nil addressed to A. Rehman Enterprises bearing the title, "dishonored cheques". It was alleged in such notice that the Cheque bearing No,0306762 dated 22-2-2001 drawn on. Prudential Commercial Bank Ltd., was referred back and dishonored on 13-8-2001. The plaintiff/appellant did not implead Shakz International Leathers (Pvt.) Ltd., which admittedly had drawn the cheques in dispute.
15. ' The defendant Messrs A. Rehman Enterprises and three others filed an application for leave to defend and raised following objections therein. (i) The plaintiff had no locus standi and in absence of any authority, power or resolution the suit could not be maintained; (ii) there was no privity of contract between the defendants Nos.2 to 4 and the defendant No,1 which was a sole proprietorship concern and owned by Mrs. Kausar Habib, (who died on 3-6-2000) (iii) they had no concern with the defendants Nos.2 to 4, after the demise of defendant No,1 and they did not inherit any property, share or assets of defendant No,1 relating to her business and that, her assets were mortgaged with the banks and at the time of her death millions of rupees were outstanding against her and the defendant No,2 as her husband and defendants Nos.3 and 4 as her sons were willing to pay off and discharge her all liabilities as a gesture of good will though they were not legally liable to discharge her liabilities and the defendants Nos.2 to 4 paid lacs of rupees to the plaintiff on their own and the dispute was referred to Pakistan Tanners Association. (iv) They never denied to pay off defendant Nos. l's liability; which proliferated due to 11th September, event in New York and as such millions of rupees of defendant No,2 were stuck up and for this reason the defendants were in deep crises. It was further stated in the application for leave to defendant that the export of leather garment to USA was decreasing annually by 38% and various amounts of defendants Nos.2 to 4 got stuck up and that the defendants Nos.2 to 4 were not partners nor they had any concern with defendant No,1 and since they did not inherit any thing from the deceased they were under no obligation to help the plaintiff recover the amount and the amount in cash was illegally received by the plaintiff from the defendants and that even if it were assumed that the defendant No,1 was under any obligation as alleged the suit could not be filed against them for it was not fair to pressurize the defendants Nos.2 to 4. It was finally pleaded that if at all the plaintiff was ready to receive the balance amount in easy instalments the defendants would be willing to pay the same on humanitarian grounds only. Under the circumstances leave to defend was sought without any condition attached to it. In support of such application the defendants Messrs Habib- ur-Rehman, Kamran Habib and Zeeshan Habib filed their respective personal affidavits on 22-9- 2003.
16. ' I have heard the learned counsel for the parties and minutely perused the record.
17. ' The learned counsel for the appellant on the other hand has referred to Messrs M.A. Majeed Khan v. Karachi Water and Sewerage Board and others PLD 2002 Kar.315 wherein it was held that the filing of the suit by or against partnership firm was permitted under the provisions of Order XXX, Rule 1, C.P.C.; but the proprietary concern could not sue in its own name under Order XXX, Rule 10 C.P.C. He also relied on Messrs Ahan Saz Contractors v. Pak Commercial Limited 1999 M LD 1781 wherein it was observed that when a suit in the name of proprietorship concern was filed it was not merely a technical flaw; but a legal defect and for such legal defect suit was liable to be dismissed.
18. ' The learned counsel for the appellant has also relied on Messrs Chowdhury Allah Bux Moula Bux v.
19. Messrs Aijaz Moula Bux and another PLD 1973 Kar.468 to stress upon that bar imposed by section 69 of the Partnership Act was not applicable to a dissolved firm and suit for action by a dissolved firm even though unregistered was not hit by subsections (1) and (2) of section 69 of the Partnership Act. He also relied upon Gulab v. Coast Lines and others 1994 CLC 2284 wherein it was held that the registered firm could be sued or sue through one of its partners.
20. ' He also relied on Messrs Combined Enterprises v. Water and Power Development Authority, Lahore PLD 1988 SC 39 to usher that it was sufficient compliance of the law if one of the partners signed and verified the pleadings and it was not the requirement of law for a partner to have a authority from another partner before instituting an action by way of filing of suit, to emphasize that the firm is not a juristic person but a compendious name for all partners who are the partners of the firm and the effect of using the name of the firm is to bring it to the notice of partners before the court and a decree in favour of or against the firm has the same effect as a decree in favour of or against all partners.
21. ' The learned counsel for the appellant has further relied on Abdullah v. Shaukat 2001 SCM R 60 to assert that the failure to furnish surety tantamount to admission of the claim under Order XXXVII, Rule 3, C.P.C. He also relied on Fayyazul Hasan v. Messrs National Feed (Pvt.) Ltd. 2001 M LD 1630 wherein it was held that upon failure to furnish surety within the stipulated period the defendant shall forfeit the right to defend the suit under Order XXXVII, C.P.C.
22. ' In PLD 1988 SC 39, it was held; clause (2) of Rule 1 Order XXX, C .P.0 . Provides : -- "That it will be sufficient if the pleading or other document is signed, verified or certified by any one such partners and rule 2 of the said order provides that where a suit is instituted in the name of the firm, an obligation is cast on the plaintiffs or their Advocate that on demand in writing by or on behalf of any defendant, forthwith declared in writing, the names and places of residence of all persons constituting the firm, on whose behalf the suit is instituted. In case of failure to do so, the court is empowered to stay all the proceedings in the suit upon such terms as it may consider fit, where, however, the required information is furnished the suit shall proceed in the same manner, and same consequences in all respects shall follow, as if all the partners had been named as plaintiffs in the suit. There is also a provision that all the proceedings shall nevertheless continue in the name of firm. This provision is against the ordinary rule that when several persons wish to obtain decree against a person, all such persons, must be made a party to the suit. Similarly, when a person makes a promise to more than one person, the right to enforce the promise rests with them, all under the provisions of section 45 of the Contract Act so that all of them are necessary parties to a suit to enforce the promise. Here it would be necessary to mention that there was no corresponding provision in the old Code of 1882, which, in terms, provided that in a suit by or against a firm all the partners of the firm were necessary parties. Accordingly, Order XXX, C.P.C. Is an exception to the ordinary rule of joinder of persons having a joint cause of action and also an exception to the provisions of section 45 of the Contract Act in so far as the initiation of proceedings by or against a firm is concerned. Under the law a firm is not a juristic person but is a compendious name for all the persons who are the partners of the firm, and the effect of suing in the name of the firm is to bring all the partners before the court which is a convenient method for showing the persons who constitute the firm at the time of the accrual of cause of action, and a decree in favour of or against a firm, has the same effect as a decree in favour or against all the partners."
23. ' The learned counsel for the respondents placed reliance on Asif Nadeem v. Messrs Bexshim Corporation and others 2001 CLC 653 to emphasize that his lordship Mr. Justice Sabihuddin Ahmed, (as he then was) expressed his view that while granting leave to defend the court was required to examine all the questions which could arise by way of defence as deducible on the plea raised by the defendant.
24. ' The learned counsel also referred to Javed Masood Khan v. Zahid Hussain and others 2001 CLC 676 effect of non-registration of a partnership firm to stress upon, that the suit could not be filed without the appellant having procured registration as it was claiming to be a partnership concern.
25. Here it may be mentioned that the photocopy of a certificate of incorporation issued on 24-5-2001 by Registrar of Firm was placed on record to show that the partnership was created on 30-6-1983.
26. ' It appears from the copy of the legal notice addressed on behalf of the appellants/respondents through their counsel Mr. Nadeem Ahmed, that the parties had business dealings and against delivery of leather garments payments were being paid by way of cheques, of which some would invariably bounce and the respondents were called upon to pay Rs,818868 with interest @ 24% per annum. Another letter dated 2-9-2002 addressed by the appellants to the Arbitration Committee of Pakistan Tanners Association, shows that the amount in question was due from both the respondents Messrs A. Rehman Enterprises or their sister concern. The pointation to sister concern was made in this letter most probably as the cheques of Shiaks International Leather (Pvt.) Ltd., were given by A. Rehman Enterprises. In fact even A. Rehman Enterprises admitted under their letter dated 14-5-2002 that an amount of Rs,818868 of Messrs M. Shafi and Company was outstanding.
27. This letter was placed on record as annexure-F to the affidavitin-evidence-in-ex parte proof on which the learned court below allowed the appellant to be cross-examined on 2-8-2004. However, this letter containing admission of the liability though based on the cheque of the sister concern of the respondents was not assailed. Thus the liability as to outstanding amount of Rs,818868 in favour of the appellant stood clearly established when the respondents did not question the said annexure F. All these annexures were filed with the affidavit-in-evidence of the appellant and they were referred to as exhibits. This being the position the appellant could not be deprived from recovering the claimed amount on technicalities or trickeries of cross-examination in the peculiar facts and circumstances of the case. The respondents in their application seeking leave to defend were apologetic and half-heartedly denied the claim at the same time they admitted having paid some amount in cash and showed their readiness to discharge the entire liability in easy instalments as at the relevant time they experienced business slump and due to 9-11 event they came under enormous pressure. It was claimed by the respondents that they had not inherited the assets after the demise of Mrs. Kusar Habib, wife of the respondent No, 1 . The respondents availed the opportunity to cross-examine the plaintiffs, yet they did not volunteer for their own cross- examination when the proceedings with the acquiescence of the parties and supplemented by the directions of the learned court was converted into normal civil proceedings not tailored for under the summary chapter. The leave to defend was allowed subject to furnishing surety. This chance was extended twice but the respondents failed to comply. Even if the original cheques were not placed on record before the learned trial court their photocopies coupled with un-equivocal admission of the liability of the amount of Rs,818868 by the respondents in their own letter which too was not disputed in the cross-examination totally established the case.
28. 'Under section 69 of the Partnership Act, 1932, no suit to enforce a right arising from a contract, could be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in register of firm as partners in the firm.
29. It is an established position in law that a partner may file proceedings in the name of the firm, as the plaintiff in the suit did. However, it is for the defendant to point out to the court any legal infirmity in.The proceedings and if the objection is not raised as to the non-registration of the firm and its locus standi to sue, the objection may well remain unnoticed by the court, escape its attention and may be deemed to have been waived.
30. ' No plea was raised by the respondents in their application for leave to defend that the suit was barred under section 69 of the Partnership Act as claimed later. Thus notice as to such objection which was not raised, coupled with benefit to meet it was not allowed to the appellant. Element of surprise was therefore introduced in the proceedings and variation was created during the cross- examination of the appellant against all norms. The course of procedure under summary chapter was converted into one applicable to an ordinary Civil Suit and the appellant was not afforded proper opportunity to lead evidence in the sense it ought to have been provided. The respondents were twice granted time to furnish surety but they failed to comply. On the whole the procedure adopted was highly prejudicial to the interests of the appellant. Instead of suit being decreed on C failure of the respondents to furnish surety which was a condition precedent to put forth any defence the respondents were allowed to cross-examine the appellant whereas the respondents themselves did not volunteer to subject themselves to the test of cross-examination on the affidavits filed by them in support of application for leave to defend. At the time the appellant filed their affidavit in evidence in ex parte proof on the directions of the learned court below it did not know that their Managing Partner would be subjected to cross-examination. In the circumstances as already discussed neither the plea that the suit was barred under section 69 of the Partnership Act was raised nor such issue was pressed into service by the respondents. The appellant have filed copy of Certificate of Incorporation of their Firm in the proceedings in appeal. Accordingly the appellant's claim cannot be defeated on this ground in the facts and circumstances of the case.
31. ' The defendants it appears much belatedly raised an objection to the maintainability of the suit on the basis of non production of original cheques. It is true that due to the handicap which is inherent in defence under the summary chapter until leave were obtained to defend, the defendant may not be heard for adjudicating his pleas in defence. However, the matter can be viewed, from another angle i,e, a suit based on a dishonoured cheque is to be decided independently of a right arising from a contract as referred to in section 69 of the Partnership Act. Accordingly it is basically the bill which gives right to sue to the holder when it is dishonoured. The court seized with the matter under summary chapter is not obliged to advert to the subterranean contract between the parties giving rise to a right to sue particularly when leave is refused or not availed rule 2 of Order XXXVII, being advantageous for reference is reproduced below:--
2. Institution of summary suits upon bills of exchange, etc. (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.
(2) In any case in which the plaint and summons are in such forms, respectively, the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend; and, 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.
(a) For the principal sum due on the instrument and for interest calculated in accordance with the provisions of section 79 or section 80, as the case may be of the Negotiable Instruments Act, 1881, up to the date of the institution of the suit, or for the sum mentioned in the summons, whichever is less, and for interest up to the date of the decree at the same rate or at such other rate as the court thinks fit;
(b) for such subsequent interest, if any, as the court may order under section 34 of this Code and
(c) for such sums for costs as may be prescribed: 'Provided that, if the plaintiff claims more than such fixed sum for costs, the costs shall be ascertained in the ordinary way.
(3) A decree passed under this rule may be executed forthwith.
32. ' The word "proved" under law of evidence i,e, Qanun-e-Shahadat Order, 1984 means:-- "A fact is said to be proved when after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". And "A fact is said to be disproved when after considering the matter before it, the court either believes that it does not exist, or its non existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist."
33. ' From the above definition of the terms "proved" and "disproved" it would appear that in the given circumstances one should not assume that the requisite evidence in relation to any fact is to be provided conclusively in a physical form. Obviously, the words so probable and the word that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists would mean something falling within the scope of positive probability far short than being conclusive. The degree of clarity of a fact is to bear proximity with probability or likelihood of its existence and that is all. It would therefore follow that the liability to make the payment of Rs,818868 was clearly admitted by respondents in their own letter dated 14-5-2002 which was not assailed in cross-examination. This letter in extenso is reproduced below;-- "A Rehman Enterprises Member Habib Group of Industries Pakistan Manufacturers, Exporters, Importers and Representatives Tannery: 320-321 Sector 7-A, Korangi Ind Area, Karachi Factory: 336 Sector 7-A, Korangi Ind Area, Karachi.
34. ' Dated May, 14, 2002 To ' Pakistan Tanners Association Korangi Industrial Areas, Karachi.
35. 'Dear Sir, This is in reference with your letter dated My, 7, 2002 for the . outstanding of Messrs M. Shafi and Co. Of Rs,818,868.
36. ' As already informed we are having good business relationship with M. Muhammad Shafi and Co.
37. And we have a record of doing business worth millions of rupees. This amount is stuck up due to September 11 position. I was personally there and spent about one month time. The party has promised to pay off in the current season which will start in September.
38. ' We confirm that the above-mentioned payment will be cleared at one go in September, 2002.
39. ' Inconvenience is highly regretted. Regards Sd/- Kamran Habib (Respondent No,3 in the instant appeal)"
40. ' In my view the appellant cannot be denied relief when liability to make payment is squarely admitted only for the reason that the drawer of the cheque in question was the sister concern of the defendants in the suit. The equitable doctrine of estoppel would come in aid to the appellant.
41. ' The respondents in the afore-mentioned letter had promised to make the payment of Rs,818868 by September, 2002 and in their application dated 20-9-2003 seeking leave to defend they were beseeching for easy installments to pay that amount. Almost a decade has passed ever since and as such the plea of installments cannot be considered now. Further the respondents have already taken advantage of a long period without coming forward to make the payment.
42. ' For all these reasons, the judgment and decree is set aside and the Suit bearing No,45 of 2003 of the appellant is decreed only to the extent of the principal amount of Rs,8,18,868 with cost throughout. Appeal is allowed accordingly.