' IJAZ UL AHSAN, J.---The appellant is aggrieved of an order dated 2-5-2008, passed by a learned Additional District Judge, Lahore. Through the impugned order a suit, filed by the appellant against the respondents under the provisions of Order XXXVII, C.P.C., was dismissed as not maintainable.
2. The brief facts necessitating the filing of this appeal are that the appellant is a foundation having the character of a public trust. It was established under a registered deed. The appellant had opened and was maintaining two accounts with the respondent Bank at its Gulberg Branch. On 1- 8-2006 a cheque for a sum of Rs,25,000 was issued by it. On presentment it was dishonoured on the ground that the accounts of the appellant had been blocked. Subsequent cheques issued by the appellant and presented for encashment were dishonoured citing the same reason. The pretext for dishonouring the cheques was a controversy between an organ of the appellant i,e, its Court of Founders. It appears that on account of the said controversy a former president who was also an authorized signatory for operation of the accounts of the appellant circulated minutes of a meeting of the Court and Founders and wrote letters directing the banks not to change the names of authorized signatories and not to honour cheques unless such cheques were signed by the authorized signatories.
3. On the basis of the aforesaid dispute the respondent Bank blocked the accounts till such time that the controversy was resolved. It appears that the respondent Bank also filed an inter pleader suit while the appellant filed a number of suits seeking reliefs of various nature involving various parties including some members of the Court of Founders as well as the respondent Bank. The said suits are stated to be at various stages of pendency and some of the same are said to have been dismissed.
4. It was in the above background that suit under Order XXXVII, C.P.C. Was filed by the appellant with the following prayer:- "In view of the above, it is prayed that the judgment and decree to be issued in favour of the plaintiff foundation and against all the defendants for an amount of Rs,298,364,994. A similar amount be decreed to be paid until the actual realization of the decretal amount... ... ".
5. On being served the respondents filed an application for leave to appear and defend the suit.
They raised various preliminary objections as well as legal and factual defences with the prayer that unconditional leave to appear and defend the suit may be granted so that they may put up their defence before the Court.
6. The record indicates that while hearing arguments on the application under Order XXXVII Rule 2(3), C.P.C., the learned trial Court heard preliminary arguments on the question of maintainability of the suit. Vide impugned order dated 2-5-2008, the trial Court came to the conclusion that suit was not maintainable under Order XXXVII, C.P.C. And proceeded to dismiss the same. Hence this Appeal.
7. The learned counsel for the appellant submits that it is an error of law apparent on the face of record to hold that the suit was not based on negotiable instruments. He submits that the respondent Bank had dishonoured nine cheques and withheld payments due thereunder for a long period without any lawful justification or excuse. He therefore submits that there was no question that the suit was not based on the instruments mentioned in Order XXXVII, Rule 2(2) of C.P.C. The learned counsel further submits that the learned trial Court had not recorded any reason for its conclusion that the suit was not based on negotiable instruments. He maintains that there was no ground whatsoever to hold that a suit for recovery of amounts payable under dishonored cheques along with liquidating damages was not maintainable under the provisions of Order XXXVII, C.P.C.
8. The learned counsel for the respondents on the other hand submits that the suit was not maintainable in its present form. He points out that under the garb of a suit under Order, XXXVII of C.P.C., the appellant was in fact claiming damages which could not be claimed in a suit under the summary procedure especially so where the quantum of damages was neither calculated nor ascertained. He further submits that the relationship between the respondents and the appellant was based on the terms and conditions applicable to the operation of the accounts as incorporated in the Account Opening Form. These authorize the Bank to block. These terms and conditions were duly accepted by the appellant at the time of opening of the accounts in question.
He therefore argues that ex facie it is a dispute arising out of a contractual relationship, which cannot constitute the subject-matter of a suit under Order XXXVII of C .P.0 .
9. We have heard the learned counsel for the parties and gone through the record. The main question that requires determination by this Court is whether, in the facts and circumstances narrated above, a suit under Order XXXVII of C.P.C. Was maintainable, Further, whether the learned trial Court was justified in coming to the conclusion that the suit filed by the appellants was not based upon negotiable instruments.
10. In order to appreciate the controversy between the, parties and the question raised in this appeal it would be useful to reproduce the provisions of Order XXXVII Rule 2(2) and (3) of the Civil Procedure Code.
Rule-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 many 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---- ' Rule-1.--(1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application;
(2) Leave to defend may be given unconditionally or, giving security, framing and recording issues or otherwise as the Court thinks fit.
(3) The provisions of section 5 of subject to such terms as to payment into Court The Limitation Act, 1908 (IX of 1908), shall apply to applications under sub-rule (1).
11. It is common ground between the parties that the appellant maintains certain accounts with the respondent Bank. It had drawn cheques on the said accounts, which were dishonoured. According to the section 6 of the Negotiable Instruments Act, "a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand." The cheques drawn by the appellant on its accounts with the respondents were admittedly negotiable instruments and were dishonoured. The appellant's position is that the cheques were wrongly dishonoured, which fact was agitated through the suit and constituted the cause of action for the suit. The Suit filed by the appellant was based upon such dishonored cheques and was therefore covered by the provisions of the Order XXXVII, Rule 2 of C.P.C.
12. The learned trial Court based its impugned order on the premise that the presence of relationship of creditor and debtor and recovery of a loan are the main characteristics, which must co-exist before a suit under Order XXXVII can be maintained. The learned trial Court came to the conclusion that in the suit filed by the appellant, the relationship of the parties was that of account holder and bank and certain amounts had not been paid against certain cheques. Therefore, the claim was not covered by the aforesaid pre-requisites i,e, presence of relationship of creditor and debtor and recovery of loan. Consequently the suit was not maintainable. We are afraid, the reasoning adopted by the learned trial Court is not supported by the language of Order XXXVII, C.P.C. Reproduced above. Further, the ingredients mentioned by the learned trial Court do not find any mention in Order XXXVII, C.P.C. We are therefore unable to subscribe to the view and reasoning adopted by the learned trial Court and cannot uphold the same.
13. Adverting to the arguments of the learned counsel for the respondents that the appellant had claimed damages which related to a tort liability which could not form the subject-matter of a suit under Order XXXVII of C.P.C., it may be observed that such fact would not effect the jurisdiction of the Court. It has been held that Order XXXVII, C.P.C. Merely provides a procedure to be followed by the suits covered by Rule 2 and does not touch jurisdiction of the Court. In the case titled "Sh. Abdul Majid v. Syed Akhtar Hussain Zaidi" (PLD 1988 SC 124), it was held:-- "... ... Where the procedure under Order XXXVII was being claimed by a plaintiff and was not available, the trial Court could proceed with the case as an ordinary suit. The High Court has not indicated any jurisdictional or procedural bar to it while determining that the decision of this Court in Siraj Din's case was obiter. In Muhammad Abdullah Sufi v. Messrs Muhammad Bux and Son and others PLD 1957 (W.P.) Karachi 445 the view taken was that where a suit was not triable by resort to the procedure prescribed in Order XXXVII, its trial could proceed as an ordinary suit."
' Reference in this regard may also usefully be made 2006 SCMR 631, PLD 1995 SC 362 and 1984 SCMR 568."
14. It is settled law that where summary procedure is not attracted, the suit can be proceeded with as an ordinary suit and the jurisdiction of the Court in this regard is not barred.
' In "United Bank Ltd., Mianwali v. Muhammad Khan and another" (PLD 1988 Lahore 424), it was held:-- . if in a case where apart from a pro note 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 pro note 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 pro note to prove the case of the appellant. Therefore, the learned trial Court could not dismiss the suit simply because the pro note was not admissible in evidence. Hon'ble the Supreme Court has in a very recent ruling titled 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 "Syed Nazir Hussain Rizvi v. Zahoor Ahmad and another" (PLD 2005 SC 787), it was held:-- ........The plaintiff can always fall back upon the original debt if relief cannot be granted on the basis of a negotiable instrument under Order XXXVII. Even otherwise, once leave to defend is granted the procedure in ordinary suits has to be followed as contemplated by Order XXXVII Rule 7."
Likewise, in "Sh. Muhammad Arshad v. Sh. Muhammad Asghar" (PLD 2007 Lahore 111), this Court held:-- "Order XXXVII relates to the procedure and not the jurisdiction. The amendments introduced by the High Court only identified the Courts where resort can be had to Order XXXVII for the purpose of trial of a suit of a particular category."
Reference may also be made 2009 SCMR 1101, PLD 2007 Lahore 111 and 2007 MLD 1215.
15. It, therefore, follows from the above that even if, for the sake of argument, it was to be concluded that a suit was not triable by resort to the summary procedure prescribed under Order XXXVII of C.P.C., its trial could nevertheless proceed as an ordinary,suit. Likewise, in 2006 YLR 537 and PLD 2005 SC 787, it was held that where a cheque was found to have become stale or negotiable instrument was found to be inadmissible but there was other evidence to sustain the cause of action, the suit could not be dismissed and should have been proceeded under the ordinary procedure. We, therefore, hold that the order dated 1-5-2008 passed by the learned subordinate court, whereby he has dismissed the suit tiled by the appellant is not sustainable and is liable to be set aside.
16. We may, however, clarify that in discussing the aforesaid case law, we do not intend to record a finding or comment on the questions,. Whether or not, the summary procedure is attracted, there is any defect in the cheques presented by the appellants, or whether a case for grant of leave to defend the suit is made out. Our observations are only meant to highlight the fact that the reasons given by the learned trial Court for dismissing the suit of the appellant namely absence of relationship of debtor and creditor and existence of a loan, are neither sustainable nor in line with dicta of the Superior Courts. We have consciously refrained from recording any finding on the defences raised by the respondents in their application for leave to appear and defend the suit which will be decided by the learned trial Court on their own merits, after hearing the parties and through independent application of mind.
17. For the reasons recorded above, we accept this appeal and set aside the impugned order dated 2-5-2008 passed by the learned trial Court. The case is remanded to the learned trial Court where the suit as well as the application for leave to appear and defend the suit filed by the respondent will be deemed to be pending. The learned trial Court shall hear the parties, decide the pending application for leave to appear and defend the suit and proceed in accordance with law. There shall be no order as to costs.