' MUHAMMAD KHALID MEHMOOD KHAN, J.---The respondent filed a suit for recovery of Rs,93,887, along with mark up at the rate of Rs,20% P.A under Order XXXVII Code of Civil Procedure. Claim of respondent is that defendant is an agriculturist and he availed an agricultural loan for harvesting the crop of sugarcane. The loan was for the purchase of Seed, Pesticides and Fertilizer. The total amount availed by the 'petitioner is Rs,1,57,452 and the said amount is secured through Demand promissory note dated 20-3-1998. Subsequently the appellant returned a sum of Rs,63,556 and as such balance amount of Rs,93,887 is recoverable from the appellant which he refused to pay, hence, the suit under special jurisdiction.
2. The appellant, appeared and raised number of objections, specifically the objection, that the loan amount was under an agreement and respondent/company has assured the appellant, that the Seed, Pesticides and Fertilizer provided by the company, is of a superior quality, and as such, the yield of sugarcane, will be maximum. On the said assurance of respondent the appellant agreed to purchase Seed, Pesticides and Fertilizer. The Seed, Pesticides and Fertilizer provided by the respondent proved of a third class quality and as such the appellant instead of getting better yield failed to even generate minimum yield of crop. He also denied the execution of promissory note. The appellant claim is that he never availed any cash loan from the respondent and under an agreement the respondent provided certain items, but those were of inferior quality and due to the said act of the respondent he suffered heavy loss. The learned trial Court vide order dated 2-3-2001 allowed appellant to defend the suit subject to furnishing the surety bond equal to suit amount. The appellant fulfilled the conditions imposed by the learned trial Court and ultimately on 3-4-2001 the learned trial Court framed the following issues:- "ISSUES.
(1) Whether the plaintiff has got no locus stands and cause of action to bring the suit? OPD
(2) Whether the plaintiff is estopped by his words and conduct to bring this suit? OPD
(3) Whether the suit is not maintainable in its present form? OPD
(4) Whether the suit is false, frivolous and vexatious, if so, whether the defendant is entitled to special costs under section 35-A, C.P.C.? OPD
(5) Whether the defendant received the suit amount from the plaintiff and executed pro note dated 20-3-1998 in favour of plaintiff? OPP
(6) Whether the pronote has been obtained in a deceitful manner and the same is a forged document? OPD
(7) Whether the plaintiff is entitled to Rs,93,887 along with mark-up?OPP
(8) Relief.
3. Both the parties adduced their respective evidence and finally the learned trial Court decreed the suit on 12-11-2001 along with mark-up at prevailing Bank rate, but it was not mentioned from which date the mark-up will be payable, hence, the present appeal.
4. Learned counsel for appellant submits that suit under Order XXXVII, Rule, C.P.C. Was not maintainable. Learned trial Court has wrongly assumed the jurisdiction and as such the decree passed by the learned trial Court is not sustainable in the eye of law on this ground alone, subject to above said legal ground, the learned counsel for the appellant further submits that decree impugned suffers from misreading and non-reading of record. He submits that it has been proved on record, that no money was ever advanced, to the petitioner, and as such the promissory note is without consideration. He admits that matter between the parties has to be settled in terms of Exh.P4, the agreement. He further submits that no document has been placed on record showing that the commodities i.e. Seed, Pesticides and Fertilizer were ever handed over to the appellant on the day of execution of promissory note or after its execution. He further submits that Exh.P2 (the alleged loan application) shows that it was executed before the execution of promissory note. He further submits that no statement of account has been placed on record nor any receipt shows that respondent ever availed any loan facility/agricultural loan from the respondent and what was the actual amount for providing the Seed, Pesticide and Fertilizer and how these were handed over to the appellant.
5. Learned counsel for the respondent submits that it is proved on record that appellant has availed the loan in the shape of Commodities as is evident from Exh.P6 the supply order and as such the appellant is bound to return the said amount. He further submits that suit was maintainable as the appellant executed promissory against valuable consideration. , Learned counsel for the respondent submits that petitioner has failed to supply the sugarcane crop and it is the respondent who suffered loss and not the appellant.
6. Before , adverting the objections of parties on merit, it is to be Seen whether present suit was triable under Order XXXVII, C.P.C. Or not? For clarity the provision of Order XXXVII, C.P.C. Is reproduced as under:--- "(1) Application of Order:-- This order shall apply only to the High Court and to the District Courts, and to any other Civil Court specially notified in this behalf by the High Court.
(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; and
(b) for such subsequent interest, if any, as the Court may 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."
7. Perusal of above said provision of law will show that the jurisdiction of the Court under this special provision of law is based on bill of exchange, hundies or promissory note. Admittedly in this case the suit of the plaintiff is based on promissory note allegedly executed by the petitioner. The promissory note is defined in Negotiable Instruments Act, 1881 (XXVI of 1881): --
(4) "Promissory note".--- A "promissory note" is an instrument in writing (not being bank-note or a currency note containing an unconditional undertaking signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
(13) Negotiable Instrument,--- (1) A "Negotiable instrument" means a promissory note, bill of exchange or cheque payable either to order or to bearer.
'Explanation.---(i) A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.
' Explanation.---(ii) A promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.
'Explanation.---(iii) Where a promissory note, bill of exchange or cheque, either originally or by endorsement, is expressed to be payable to the order of a specified person, and not to him or his order it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly or it may be made payable in the alternative to one or two, or one or some of several payees."
This shows that promissory note is against consideration and the executor unconditionally promised to pay the amount of promissory note on demand. The presumption of law is that promissory note is always against consideration unless proved otherwise. The respondent's claim in the suit is that, the petitioner applied for agricultural loan, for the purchase of Seed, Pesticides and Fertilizer for harvesting the sugarcane crop. The respondent's claim is that they are running the Sugar Mills and they have announced Sugarcane loan as incentive for sugarcane groweRs, The contents of plaint shows that respondent himself admitted that out of amount of promissory note Exh.P-3 the appellant has already paid a sum of Rs,63,556, meaning thereby the demand promissory note stands converted into subsequent agreement under which a part payment was paid and adjusted hence, promissory note lost its credibility and enforceability under special law, for example if some one issue a cheque in discharge of his financial obligation of Rs,100 the drawee receives Rs,20 out of Rs,100 before presenting the cheque for encashment to the Bank. The drawee of the said cheque goes to the Bank and request them to please give him Rs,80 as he has already received Rs,20 from its drawer. The bank will not pay the said instrument. Likewise is the case on demand of promissory note, if partial payment of loan has been made the demand promissory note will not be payable for the lesser amount unless the Demand Promissory Note of lesser amount is issued but on the basis of original promissory note suit can be filed definitely but before the Civil Court under its ordinary jurisdiction and not under special jurisdiction of Order XXXVII, C.P.C., so, in my view without commenting, the evidence on other issues, that may prejudice the case of the parties, I allow this appeal on the question of jurisdiction and set aside the impugned judgment and decree and direct the learned Addl. District Judge to return the plaint under Order VII, rule 10, C.P.C. To the appellant for filing the same before competent court of law. There is no order as to costs. The appeal is allowed.