' RAUF AHMAD SHEIKH, J..--- The appellant has challenged the judgment and decree dated 19-2- 2004 passed by learned Additional District Judge, Burewala, District Vehari, whereby the suit for recovery of a sum of Rs,300,000/- under Order XXXVII, C.P.C. On the basis of promissory note filed by the plaintiff/respondent was decreed in his favour by dismissing the petition for leave to defend moved by the defendant/appellant.
2 The facts, in brief, are that the respondent filed a suit for recovery of the disputed amount on the basis of pro note dated 27-6-2002 under Order XXXVII, C.P.C. It was stated that the parties had good relations as the appellant was contractor of the Ice Factory owned by the respondent and for this reason the respondent had full confidence in him. It was stated that on 27-6-2002 the appellant borrowed a sum Of Rs,300,000/-, which he lent in presence of the witnesses due to mutual trust and the appellant on receipt of the same executed the pro note along with the receipt and made the promise to return the loan by 27-6-2003. It was alleged that on 27-6-2003 the respondent made a demand for return of the money as the period fixed for the re-payment had elapsed and the appellant promised to return the same within 2/4 days but on demand having been made, refused to return the money so a legal notice was given requiring him to fulfil the promise and make the payment but he flatly refused.
3. The defendant/appellant submitted an application for leave to defend with the contention that he was an employee of the plaintiff/ respondent, who had shown him as contractor in order to evade the tax. He had obtained Nissan Sunny Car and also loan under Unemployment Scheme in the name of the defendant/appellant but did not make any payment to him. It is stated that in October, 2001 the parties started joint business of cotton but before settlement of accounts, the plaintiff/ respondent obtained the disputed pro note and six cheques of Rs,50,000/- each as guarantee although no consideration had passed from him to the appellant. He stated that he had put the signatures on the pro note and the cheques because he had 'been his personal servant but had not received the sum of Rs,300,000/- mentioned in the pro note.
4. This application was resisted by the respondent/plaintiff. The learned Additional District Judge, Burewala, after hearing the arguments dismissed the petition for leave to defend and consequently proceeded on to pass the impugned judgment and decree.
5. Learned counsel for the appellant has contended that he had submitted the affidavit in support of the contents of the petition for leave to defend whereby, inter alias it was categorically contended that the disputed promissory note was without consideration. It is urged that no doubt a presumption exists to the effect that the negotiable instrument was drawn for consideration but the same can be rebutted by the maker upon whom the onus to prove would shift. In support of the contentions raised, reliance is placed on Muhammad Azizur Rehman v. Liaquat All (2007 SCM R 1820) and Altaf Sarwar v. Shamas Din (2005 YLR 2614). It is urged that the defendant/appellant was deprived of his right to prove that the disputed promissory note was without consideration and as such gross miscarriage of justice has been caused. It is also urged that the observation of the learned trial court to the effect that the affidavit was not attested by the Oath Commissioner is also result of misreading of the affidavit because it is duly attested by the Oath Commissioner.
6. Learned counsel for the respondent has vehemently controverted these contentions. It is urged that the execution of the promissory note is admitted, which contains an unconditional undertaking to the effect that the disputed amount would be returned in cash to the respondent. It is urged that the signatures on the pro note or receipts are not denied by the maker i,e, appellant so he is precluded from claiming that it was without consideration.
7. The maker of the promissory note furnishes an unconditional undertaking to pay on demand or at a fixed or determinable future time the amount mentioned in it. Under section 118(a) of the Negotiable Instruments Act (No,XXV1 of 1881), a presumption is attached to the negotiable instrument that it was for consideration. However, the words used 'until the contrary is proved' vividly reveal that this presumption is rebutable and the maker of the instrument, even if he admits the execution and his signatures on it, can lawfully prove that the same was without consideration.
No doubt the onus to prove this would lie on him i,e, maker. In the present case, the appellant/defendant had categorically contended that the promissory note and the cheques were obtained as guarantee due to mutual trust and the same were without consideration.
' The contents of the petition were verified through an affidavit duly attested by Mian Muhammad Saeed, Advocate and Oath Commissioner, Burewala, District Vehari. No counter-affidavit in this regard was filed along with the reply. In these circumstances, the learned trial court should have not declined to grant the leave to defend as cogent reasons for allowing the same did exist for the reasons elaborated above. Whenever the court is satisfied that plausible defence has been put forth by the defendant then the grant of leave to defend under Order XXXVII, Rule 3, C.P.C. Is necessary and expedient for the ends of justice. By disallowing the petition for leave to defend and consequently on passing the impugned judgment and decree, the learned trial court has committed material illegality causing gross miscarriage of justice.
8. For the reasons supra, the appeal is accepted and the impugned judgment and decree are hereby set aside. Consequently, the petition for leave to defend moved by the appellant is accepted subject to his furnishing bank guarantee in the sum of Rs,300,000/- within one month from today. The suit is remanded to the learned trial court for its decision afresh in accordance with law. The record of the learned trial court be returned immediately along with the copy of this judgment for compliance.