Shahid Karim, J:- This is an appeal under section 96 of the Civil Procedure Code,1908 against the judgment and decree passed by the Additional District Judge, Sahiwal dated 14.06.2006 whereby the appellant's suit was dismissed.
2. The relevant facts are that the appellant filed a suit against the respondent under Order XXXVII CPC on the basis of a promissory note. The appellant alleged that the respondent had borrowed 81500 Saudi Riyals from the appellant and in lieu thereof executed a promissory note dated 30.10.2001. The case set up in the plaint is that the respondent/defendant is a resident of Sahiwal and is engaged in the business of leather products for which he was residing in Saudi Arabia. The respondent/defendant had taken monies on different occasions from the appellant for his business requirements. In the month of October, 2001 when the respondent had come to Sahiwal, it was agreed between the parties that in consideration of the amount which had been taken by the respondent/defendant, the respondent/defendant shall execute a pronote to the tune of 81500 Saudi Riyals and the respondent also agreed that the amount borrowed from the appellant shall be returned on the demand of the appellant. It was further asserted in the plaint that the plaintiff suffered in his business financially and was on the verge of insolvency. Therefore, he was compelled to require the respondent for the payment of the amount which had been loaned to him. In short, the respondent refused to repay the amounts or to honour the pronote executed by him and thus, the appellant was constrained to file a suit under Order XXXVII CPC on the basis of the pronote.
3. In the written statement the respondent/defendant did not deny that there were business dealings between the parties. He admitted to the taking of cheque of Rs.500,000/- from the appellant. He also admitted that surreptitiously appellant had got procured signatures of the respondent on the blank pronote. Further the defence set up by the respondent is that the amount which had been taken from the appellant was returned with interest and there was nothing due from the respondent to the appellant/plaintiff.
4. From the pleadings of the parties following issues were framed by the Additional District Judge:- "1. Whether the suit is barred by time?OPD
2. Whether this court lacks territorial jurisdiction to adjudicate upon the matter?OPD
3. Whether the pronote is not properly stamped?OPD
4. Whether the plaintiff is entitled to the recovery of 81500 Saudi Riyal on the basis of pronote which is equivolent to Rs.13,86,00/- OPP
5. Relief."
5. Issue No.4 is pivotal to the decision of the controversy in hand and the findings returned by the Additional District Judge with regard to the issue No.4 is reproduced as under: "As per Article 17(2) the Qanun-e-Shahadat Order in the financial transactions two male witnesses are necessary. PW2 Khalid Parvaiz has categorically stated that in his presence no Saudi Riyal was handed over to the defendant. According to PW1 a pronote regarding 81000/- Saudi Riyal was written but Ex.P1 indicates that it was a pronote of 81500 Saudi Riyal. The deed writer is not produced by either of the parties. The statement of PW1 is inconsistent with the averments of the pronote Ex.P1. So no reliance can be placed on the statement of PW1. Similarly, the statement of PW3 in the rebuttal is also highly unreliable. The issue No.4, in view of the findings above, is decided against the plaintiff."
6. The plaintiff produced Muhammad Azhar-ul Islam and Khalid Pervaiz as PW-1 and PW-2, respectively, who appeared as marginal witnesses to the pronote Ex.P1 and the receipt for the payment of money which is Ex.P2. The respondent/defendant appeared as DW-1.
7. It is submitted by the learned counsel for the appellant that the pronote was properly exhibited in evidence and in terms of section 118 of the Negotiable Instrument Act, 1881 there is a presumption attached to all negotiable instruments as to consideration, as to date and as to time of acceptance. According to the learned counsel, this presumption has gone unrebutted and the findings of the Additional District Judge are erroneous. He further submits that only one witness was produced by the respondent/defendant and that too himself and no other witness was produced to rebut the presumption which was raised under section 118 of the Act, 1881. He further submits that the previous transactions between the parties are admitted by the respondent/defendant which was not taken into account by the Court below as also that the signatures on the pronote were admitted by the respondent/defendant.
8. The learned counsel for the respondent/defendant has, on the other hand, submitted that the plaint does not disclose or mention the date of the payment of money as also of the pronote. The learned counsel referred to the cross-examination of PW-1 to assert that PW-1 did not say if the payment was made in his presence. He submits that the said witnesses were also witnesses to the receipt for the payment of money. Yet they have not acknowledged the payment of money in their presence.
9. I have heard the learned counsel for the parties.
10. Before I proceed to decide the instant appeal, there are certain essentials of a promissory note which have been settled by the superior Courts. These are that in order for a document to be a promissory note it is necessary that there should be-- i) an unconditional undertaking to pay, ii) the sum should be a sum of money and should be certain. iii) the payment should be to or to the order of a person who is certain, or to the bearer, of the instrument. iv) and the maker should sign it.
If these four conditions are present a document becomes a promissory note by virtue of section 4 of the Act, 1881 (see 2011 CLC 837 and PLD 2007 Lahore 114 in this regard). Secondly as brought forth above, section 118 of the Act, 1881 obliges certain presumptions to be raised in respect of negotiable instruments. These presumptions, inter alia are that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. It is also to be presumed that every negotiable instrument bearing a date was made or drawn on such date. Under section 118, there is an initial presumption that the negotiable instrument is made, drawn, accepted and indorsed for consideration yet this presumption is rebuttable. It is settled law that the onus is on the person denying the consideration to allege and prove the same. Where the execution of the promissory note and its receipt is specifically proved by the plaintiff then the burden would shift on the defendant to prove want of consideration. On the touchstone of these basic principles governing the negotiable instrument, I shall have to see as to whether there was a presumption in favour of the appellant/plaintiff as also whether the presumption was competently rebutted by the respondent/defendant.
11. Issue No.4 is the foundational issue and must be dealt with ahead of the others. It is common ground between the parties that there was some kind of business relations in which the parties indulged. The parties, however, disagree on the contours of that business relation. Also it is not denied that the defendant executed a pronote albeit it was blank when it was executed by the respondent/defendant. It has not been specifically denied by the respondent/defendant that he did not execute or sign the promissory note dated 30.10.2001 and will thus be deemed to have admitted his signatures on the pronote which is the subject matter of the instant appeal. It is also an admitted fact that the respondent/defendant did return a certain amount of money which he had borrowed from the appellant/plaintiff although the consideration regarding the pronote in question has not been admitted. That should make little difference since as stated above there is a presumption attached to a negotiable instrument under section 118 of the Act, 1881 and once that presumption is established and the pronote is validly executed, the onus shifts to the respondent/defendant to rebut that presumption. The Additional District Judge has relied upon Article 17(2) of the Qanun-e-Shahadat Order, 1984 in support of the proposition that in financial transactions, two male witnesses are necessary. It is not understandable as to why the Additional District Judge invoked Article 17(2) of the Qanun-e-Shahadat Order, 1984 since firstly the pronote was witnessed by two witnesses and these two witnesses were in fact produced in evidence by the appellant/plaintiff. More importantly however, a promissory note is not required to be attested by witnesses. This issue, however, has not been raised by the respondent/defendant in the written statement nor has any objection been taken with regard to the attestation by two witnesses as also that the promissory note was within the mischief of Article 17(2) of the Qanun-e-Shahadat Order, 1984. It was, therefore, not relevant for the resolution of the controversy and the Additional District Judge committed an error in relying upon Article 17(2) of the Qanun-e-Shahadat Order, 1984 and without elaborating upon it to decide the issue against the appellant/plaintiff. The Additional District Judge has in fact placed the entire burden to prove the case on the appellant/plaintiff and has not considered the applicability of section 118 of the Act, 1881. He did not consider and take into consideration the fact that there was a presumption attached to the pronote which had been validly exhibited and that the signatures had not been denied by the respondent/defendant. There was thus presumption as to consideration etc attached to the pronote. The Additional District Judge has pointed to certain contradictions to have crept in the statements of PW-1 and PW-2, however, no consideration has been given to the fact that it was upon the respondent/defendant to have brought forth reliable and positive evidence to rebut the presumption which was attached to the pronote.
12. PW-1 admits his signatures on the pronote and the receipt pronote. He also says in his evidence that the said pronote was signed by the other witness as well.
Although the said witness does not say that the money was exchanged in his presence but the case of the plaintiff in any case is that the amount had already been given to the respondent/defendant and was not given on the day of the execution of pronote. In cross- examination a question was specifically put to him that the defendant's signatures had been procured on a blank pronote. Likewise PW2 admitted the signatures on the pronote and testified as to the fact of execution of the pronote. He too, was put a suggestion that the defendant had signed the pronote which was blank at the time of putting his signatures.
13. The respondent/defendant appearing as DW-1 admitted that he had put his signatures on some pronote but that pronote on which his signatures had been affixed was blank and was not filled in.
The respondent/defendant had put forth a defence that he had in fact borrowed Rs.500,000/- from the appellant and had returned that money. However, no evidence was forthcoming with regard to this fact.
14. A judgment of the learned Division Bench of this Court reported as Abdul Rauf v. Farooq Ahmed and another (PLD 2007 Lahore 114) has a complete answer to the erroneousness of the findings of the trial court. It was observed by the Hon'ble Division Bench as follows:
3. We have heard the learned counsel for the parties. As far as, the proof of the pro note and the receipt attached thereto, as also the agreement, are concerned, these documents have been duly proved by the marginal witnesses P.W.1 and P.W.2; having admitted his signature and thumb- impression on the pro note, etc., in the written statement, the burden of proof, has shifted upon the appellant, to establish that he had signed and thumb-marked on the blank papers and also that the amount of Rs.4,30,000, has been paid to the respondents in lieu of the pro note.
4.........
5. As regards the argument about the lack of attestation of the pro note by two witnesses, resulting into the non-compliance of the provisions of Article 17(2) (a) of the Qanun-eShahadat, 1984, it may be held that the application of the sub-clause ibid is subject to clause (2) of the Article, which clearly ordains "unless otherwise provided" "in any Special Law." Now the questions which arise for consideration are (i) whether the Negotiable Instruments Act, 1881 (the Act) is a Special Law (2) and whether the Act provides for the non-attestation of a promissory note by the witnesses.
6. In order to answer the first question, it may be held that the Order 1984, came into force on 26- 10-1984; it is the General Law pertaining to the evidence, through which the Evidence Act of 1872 was repealed and replaced. The expression appearing "any Special Law" in the Article undoubtedly means the Special Law dealing with the Special subject, which were existing at the time of the enforcement of the Order. As at that time, the Negotiable Instruments Act 1881, was duly in force and therefore, for all intents and purposes, it is the Special Law, within the meaning of the said Article."
15. It is evident that the respondent/defendant did not discharge a burden which was shifted to him to establish that he had signed and thumb marked on blank papers and that the amount of the pronote had been paid to the appellant in lieu of the pronote. Issue No.4 is thus decided against the respondent/defendant and in favour of the appellant/plaintiff.
16. Issues No.1, 2 and 3 were decided against the respondent/defendant and have not been assailed in this appeal and thus there is no requirement for findings to be returned on these issues.
17. In view of the findings above, the instant appeal is accepted and the suit of the appellant/plaintiff is decreed as prayed for.