' FAROOQ ALI CHANNA , J.---The appellant through this first appeal has called in question the judgment and decree dated 15-1-2007 and 18-1-2007 respectively, whereby the learned District Judge Karachi South had decreed the Suit No.47 of 2004 filed by the respondent against the appellant under Order XXXVII of Civil Procedure Code for recovery of Rs.25,80,000 with the prayers as under:--
(1) To pass a Judgment and Decree in favour of plaintiff and against the defendant for a sum of Rs.25,80,000.
(2) To grant the mark up" on the Principal sum of Rs.25,80,000 18% per annum since the date i.e. 10- 7-2003.
(3) To grant cost of the suit.
(4) Grant any other relief which this honourable Court may deem fit and proper.
2. The facts in brief are that in the month of January, 2003 at the request of appellant, the respondent being his friend, provided a friendly financial assistance/loan of Rs.25,80,000, enabling him to overcome enormous financial problems occurred in his business. The appellant as security for return of loan issued Nine (9) post-dated cross cheques detailed as under:-- {{TABLE}} S.NoCHEQUE NO.DATED AMOUNT 1 3046234 30-2-2003Rs.45,000 2 3176001 5-3-2003Rs. 4,00,000 3 3176002 10-4-2003Rs. 4,00,000 4 3176027 12-4-2003Rs.90,000 5 3176028 12-4-2003Rs. 2,00,000 6 3176029 1-5-2003Rs. 2,45,000 7 3176003 10-5-2003Rs. 4,00,000 8 3176004 10-6-2003Rs. 4,00,000 9 3176005 10-7-2003Rs. 4,00,000 TOTAL Rs.25,80,000 {{TABLE}}
3. The above-referred cheques on presentation were dishonoured by concerned bank with endorsement that "company stamp is required". The respondent thereafter approached the appellant for discharge of his entire liability to pay debt but in vain, consequently the respondent finding no alternate served legal notice dated 19-4-2004 upon the appellant, who in spite of service 'failed to clear the liabilities, hence the respondent filed the suit for recovery as stated hereinabove.
4. Summonses were issued against the appellant through all modes of service provided under the law, publication of summons was also made in daily "NAWAI-WAQT" Karachi dated 15-9-2004.
However, the Appellant failed to appear before the trial Court and did not file application for Leave to defend the suit in terms of Order XXXVII, Rule 2, Civil Procedure Code, hence ex parte judgment and Decree dated 19-4-2004 and 30-10-2004 respectively were passed against the appellant After one year, the appellant moved an application under section 12(2) read with Order IX, Rule 13 and Order XXXVII, Rule 4 Civil Procedure Code, which after notice to respondent was allowed and ex parte Judgment and Decree were set aside, in consequence thereof the appellant filed application under Order XXXVII, Rule 2, C.P.0 which was allowed, conditional leave was granted to the appellant to appear and defend the suit on furnishing Bank Guarantee for a sum of Rs.25,80,000 (Rupees Twenty Five Lacs and Eighty thousand) which condition the appellant failed to fulfil hence, again the suit was decreed vide judgment and Decree impugned in this appeal.
5. Mr. Anwar Ahmed, learned counsel for the appellant during arguments has contended that the impugned judgment and Decree are arbitrary, ab initio and bad in law, he further insisted that trial Court while declining the request of appellant for furnishing solvent surety instead of security of Bank Guarantee, did not consider the merits of the case, the appellant prima facie had a good case for grant of leave to appear and defend the suit unconditionally or at least on furnishing solvent surety and not Bank Guarantee. The learned counsel has further contended that the claim of respondent for financial assistance/loan to appellant in the sum of Rs.25,80,000 was false, the factual position was that the appellant borrowed a sum of Rs.15,00,000 (Fifteen Lacs) on interest basis from the respondent and for discharge of liability delivered 9 post-dated cheques to the respondent. However there was some miscalculation of amount payable against interest over the Principal amount of Rs.15,00,000. To resolve the above mentioned controversy a meeting was held wherein the respondent had undertaken before the members of meeting named in application for Leave to defend, for return of 9 post-dated cheques, but the respondent later on failed to honour his undertaking and filed the suit malafidely. Learned Counsel has further contended that against financial facility/loan of Rs.15,00,000 the appellant has already paid much more amount to the respondent detailed in Para No. 4 of Leave to defend application, as such the appellant was entitled to place his defence before trial Court by grant of unconditional Leave to defend the suit.
6. Conversely Mr. Aziz-ur-Rehman, learned counsel for the respondent while controverting the submissions of learned counsel for appellant has argued that the order of trial Court granting the conditional leave subject to furnishing security of Bank Guarantee equivalent to claimed amount was properly passed after considering the facts and circumstances of the case and grounds taken by the appellant in Leave to defend application. Learned counsel has further contended that trial Court had given many opportunities to the appellant for fulfilment of condition of furnishing security within the period provided, however the appellant failed to fulfil condition as such the suit was decreed in terms of Order XXXVII Rule 2(2) Civil Procedure Code and that appeal is liable to be dismissed.
7. The scope of appellate Court in appeal filed against the Judgment and Decree passed in summary suit for recovery of amount under Order XXXVII, Civil Procedure Code is to examine the Proprietary and legal aspects of the order passed on application of defendant under Order XXXVII, Rule 2, Civil Procedure Code for grant of Leave to appear and defend the suit. If the order appears to be perverse, arbitrary based upon unwarranted reasons, the same is liable to be set aside, consequently the Judgment and Decree based upon the said order is also liable to be set aside and matter to be decided afresh after affording opportunity of appearance and defending the suit to the defendant. However if the said order appears to be justified based upon cogent reasons, and does not suffer from infirmity, illegality or irregularity, the trial Court is statutorily bound by sub-rule
(2) of Rule 2 of Order XXXVII, Civil Procedure Code to decree the suit deeming the averment of plaint, to be admitted. I am fortified by decision of the Honourable Supreme Court of dismissing a petition reported as Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim (1999 SCM R SC 2832) by relying upon observations passed in another case reported as Ali Khan and Co. . v.
Allied Bank of Pakistan Limited (PLD 1995 SC 362) the relevant portion reads as under:-- "10. The ratio decidendi of the above referred cases seems to be that if a defendant fails to appear or fails to obtain Leave to defend in response to a summons served in Form No.4 provided in Appendix-B to the C.P.C. Or fails to fulfil the condition on which leave was granted or where the Court refuses to grant leave, the Court is to pass a decree. It may be observed that in sub-rule (2) of Rule. 2, C.P.C, it has been provided that if a defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree, but no such consequences are provided for in Rule 3 of the above Order in a case where the Court refuses to grant leave or the defendant fails to fulfil the condition on which leave was granted. In our view, 'notwithstanding the above omission in Rule 3, the effect of refusal of the Court to grant leave or failure on the part of the defendant to comply with the condition of the leave, will be the same i.e. Defendant shall not be entitled to defend the suit on any ground and the Court would pass a decree in favour of the plaintiff. However, this does not necessarily mean that the Court is not required to apply its mind to the facts and the documents before it. Every Court is required to apply its mind before passing order or judgment notwithstanding the factum that no person has appeared before it to appose such an order or that the person who wanted to oppose was not allowed to oppose because he failed to fulfil the requirements of law."
8. It may be observed that instant suit was decreed by trial Court by first judgment and decree passed on 19-4-2004 and 30-10-2004 respectively, the Execution Application No. 37 of 2004 was also filed after one year, on appearance of appellant both judgment and decree were set aside.
The above order alone was sufficient ground justifying the order of trial Court imposing the condition of furnishing security of Bank Guarantee equivalent to the suit amount while granting Leave to defend the suit. Beside above, the record shows that the appellant has not disputed the issuance of 9 post-dated cheques against financial facility/loan to the respondent which on presentation were dishonoured, however the appellant in Para No. 4 of Leave to defend application has expressed that issuance of said post-dated cheques in favour of respondent/Loanee were with miscalculation of amount payable against interest over the Principal amount. In view of the facts and circumstances stated above, the order of trial Court conditionally granting leave to defend the Proceedings does not suffer from any illegality or material defect.
9. The record further reflects that after conditional grant of Leave to defend the suit, vide order dated 10-10-2006, the appellant failed to fulfill the condition of furnishing the security within 15 days and made an application for extension of time which was allowed. However, the appellant again failed to fulfil the condition and made another application under section 151 Civil Procedure Code for his exemption from furnishing Bank Guarantee and permission to defend the suit on execution ' of his Personal Bond, the above application was without merit, suffering from cogent reasons therefore was dismissed and the suit was decreed, this shows that the appellant was aware of factum of institution of suit and made various application therein, which were decided accordingly therefore, it was obligatory upon him to make necessary arrangement for defence of suit, but the appellant seemed not to be vigilant as such his case is hit by maxim "LAW WOULD HELP VIGILANT AND NOT THE INDOLENT".
10. For the reasons discussed and dicta referred hereinabove, I am afraid that no case warranting interference of this Court is made out nor I find any substance in this appeal, the same is, therefore, dismissed with no order as to cost.