' IKRAMULLAH KHAN, J.---The learned counsel for the appellants has questioned the impugned judgment herein, on the ground of alleged illegality, occasioned by the learned Court, while not applying correct law to the proceeding to set aside the impugned judgment.
2. The learned counsel contended that, once an order in regard to leave to defend was granted, could not be recalled, on account of subsequent default in appearance and the learned Court below was not vested with jurisdiction to proceed against the petitioners in terms of the provisions contained in Rule 2 of Order XXVII, C.P.C., 1908; therefore, the impugned judgment, whereby an ex parte decree was passed against the appellants, is against the law and facts on record, may be set aside.
3. As against that, the learned counsel for respondent not only supported the impugned judgment, but in categorical terms excluded the application of Rule 13 Order IX of C.P.C., 1908 for setting aside an ex parte decree and contended that once a decree passed under the provisions contained in Rule 2 of order XXXVII C.P.C., 1908; could only be assailed in appeal within the prescribed period as provided there under the provisions contained in Limitation Act, 1908, while not doing so, the appellants were precluded by rules therefrom filing an application for setting aside the decree passed ex parte against them on subsequent date, when the case was called on and petitioners remained absent.
4. I have heard both the learned counsel for the parties and anxiously gone through the record
5. The record reveals, that appellants were granted leave to defend the suit on 14-1-2013, with condition to furnish indemnity bond in sum of Rs, 46,94,000 with two guarantors in the like amount, but the appellants made default in their appearance at the subsequent date, whereby the learned Court below not only recalled his previous order of leave to defend but also passed an ex parte decree dated 2-1-2013, thereunder the provisions contained in Rule 2 of Order XXXVII, C.P.C., 1908.
6. The appellants, submitted an application against the impugned ex parte judgment dated 1-2- 2013, under the provisions contained in Rule 4 of Order XXXVII, C.P.C., 1908 read with Rule 13 of Order IX, C.P.C., 1908, to set aside the impugned decree dated 1-2-2013, on the ground well mentioned therein. The said application was dismissed by the learned Court whereby it was held that once an order in regard to leave to defend was recalled and in pursuance of the provisions of Rule 2, Order XXXVII, an ex parte decree has passed could not be set aside on any ordinary application as required thereunder to set aside an ordinary ex parte decree.
7. To combat with the present situation arising out of the impugned judgment, the legal proposition would be that whether, (i) a Court, in exercise of its jurisdiction under Order XXXVII, C.P.C., 1908 could pass an ex parte decree in purview of Rule 2 of Order XXXVII on any subsequent default committed by the defendant in the suit, thereafter grant of leave to defend and appear and whether Rule 4 of Order XXXVII would be applied in such a case to set aside an ex parte decree or the defendants against whom an ex parte decree has been passed, was to prefer an appeal.
8. Prior to dilate upon the issues mentioned hereinabove, I would like to give reference of the judgments rendered thereby the apex Court in cases of "Haji Ali Khan and Company, Abbottabad v.
Messrs Allied Bank of Pakistan, Limited Abbottabad" (PLD 1995 SC 362) and "National Bank of Pakistan v. Tradewell (Pakistan) Corporation and 2 others" (1991 CLC 1243).
' The anxious perusal of the judgments cited hereinabove has solved out some of the proposition, framed hereinbefore in this judgment.
9. The Hon'ble apex Court in judgment ibid has held that, in case, either a defendant failed to appear or not applied thereto for leave to defend or leave to defend was granted but with some condition and was -not fulfilled, in either situation the Court could proceed thereunder Rule 2 of Order XXXVII, C.P.C., 1908 against the defendant to pass an ex parte decree against him.
10. But whether on mere subsequent absence of defendant, for a single occasion the Court would also revert to the provisions contained in Rule 2 of Order XXXVII, C.P.C., 1908, is another legal proposition involved herein to be legally answered. In this regard, it would be not out of context, to give reference here to the provisions contained in Rule 2 of Order XXXVII, C.P.C., 1908, which is:- "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 here under, 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 principle 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 order under section 34 of this Code; and
(c) For such sums for costs 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".
11. The provision of Rule 2, reproduced hereinabove, are itself clear and unambiguous, that the Court may pass an adverse decree, when the defendant fails to appear or defend his suit.
12. The appearance of a person in suit filed there under the provisions of Order VII, C.P.C., 1908, in pursuance of the summons in form 4 in appendix-B to C.P.C., 1908, not only the first appearance of the defendant in such suit would be in pursuance of the summons issued to the defendant on the prescribed form but each and every subsequent appearance in the suit shall be amounted as an appearance in pursuance of the summons issued to him, in form 4 of appendix _ annexed thereto the C.P.C., 1908, and in case of any subsequent default of defendant in appearance or to defend the suit, the allegation in the plaint shall be deemed to be admitted and the plaint shall be entitled to a decree.
13. The 3rd proposition would be, that whether the provisions contained in. Rule 113 of Order IX, C.P.C., 1908, would be applied thereto, to set aside a decree passed in purview of Rule 2 of Order XXXVII, C.P.C., 1908. The answer to this proposition is very simple which is not at all. The decree passed in suit instituted thereunder the provisions contained in Rule 2 of Order XXXVII C.P.C., 1908, on any grounds mentioned therein, could not be treated as a decree passed ex parte in ordinary suit in pursuance of Rule 6 of Order IX, C.P.C., 1908, and could not be set aside in the same manner, mode and on the grounds envisaged thereunder the general provisions contained in Rule 13 of Order IX, C.P.C., 1908.
14. To set aside a decree passed thereunder, the provisions contained in Rule 2 of Order XXXVII, C.P.C., 1908 could only be set aside thereunder the provisions contained in Rule 4 of Order XXXVII, C.P.C., 1908, to fortify my this finding I would like to refer here as under the judgment of Hon'ble Sindh High Court, Karachi rendered therein case of "National Bank of Pakistan v. Tradewell (Pakistan) Corporatian and 2 others" (1991 CLC 1243):--- "This Rule permits the defendant to apply for setting aside an ex parte decree. The power of the Court under this Rule to set aside ex parte decree is not confined to those cases where the defendant does not appear in answer to the summons but the power extends to any ex parte decree passed in a summary suit under Rule 2. The Rule is, however, subject to the condition that there must be some special circumstance to support any such request made by the defendant, otherwise the Court will not be justified to set aside the decree which had been passed. The merits of the defence can be considered to be a special circumstance with in the meaning of the Rule.
"Order XXXVII, Rule 4 applies to a suit as has resulted into a decree under the summary procedure and it enables the Court to set aside "the decree" which means the decree made under O.XXXVII, R.2 (2). Rule 2 contemplates two circumstances under which a decree can be made-one, where the defendant fails to obtain leave to defend; and second, where having obtained such leave he does not appear and defend the suit in pursuance of the leave. On satisfaction of either of these conditions, the consequence provided by Rule 2(2) must follow and result into a decree. The words "after decree the Court may" in RA must mean after such decree as is made under R.2. The word "decree" is applicable to a decree obtained in either eventuality and in the absence of any thing else either kind of decree can be set aside by the Court if conditions laid down in the Rule are satisfied".
' This view has also been held by Hon'ble Karachi High Court in case of "Habib Bank Limited v.
Mussarat Ali Khan" (PLD 1987 Karachi 86)
15. Adverting to the facts of the present case, it may be observed that the learned Court below had granted leave to defend the suit on condition of furnishing indemnity bonds, whereas the appellants applied thereto the Court for permission to send the bonds to the. Court of their home District for verification of bonds as the guarantor hailed therefrom District Hangu and the case was fixed for hearing on the said application, when the appellants made default therein their appearance. The default of the appellant on the date fixed for hearing on miscellaneous application could not be treated as an default within the meaning of Rule 2 of Order XXXVII, C.P.C., 1908 and the Court could not adopt such a harsh and hard step to proceed against the appellants thereunder the provision contained in Rule 2 of Order XXXVII, C.P.C., 1908 as the appellants were greatly prejudiced by having been deprived of its valuable right to defend the suit.
16. Insofar the objection of the learned counsel for respondents that the application to set aside the ex parte decree was hopelessly time barred as the said application was preferred there before the Court beyond 30-days is misconceived.
17. No period of limitation has been provided there under any provisions of the Limitation Act, 1908, therefor an application under Rule 4 of the Order (XXVII C.P.C., 1908, and as such the residuary provisions contained in Article 181 of the Limitation Act, 1908, would be applied to such cases, whereas the period of limitation is 3-years thereafter gaining knowledge. Reliance may be placed in this regard on case of "Tahir. A. Khan v. Messrs United Air Travels Limited" (2004 YLR 416) and "Mst Tahira Taj v. Hakeem Shah" (2011 CLC 950).
18. The appellants in a very deliberate manner have mentioned the special circumstances in their application, whose contents were duly verified on affidavit sworn by the appellant but the respondents failed to rebut or refute the averments made therein through counter affidavit as the reply submitted by the respondent do not bear any solemn affirmation or affidavit.
19. Keeping in view the reasons given herein above, and the golden principle of law that cases shall be decided on merits and a person, shall not be condemned unheard. But, as no appeal is provided there under the provisions contained in section 104 or Order XLIII of C.P.C., 1908, against an order rejecting an application preferred there under Rule 4 of Order XXXVII, C.P.C., 1908, therefore, in exercise of inherent jurisdiction, vested in this Court under the provisions of section 151, C.P.C., 1908, I convert this appeal into revision and accordingly accepted, whereas the impugned judgments dated 1-2-2013 and 19-7-2013, both are accordingly set aside and the case is remanded back to the learned trial Court and deem to be pending there at the stage, when the ex parte decree had not been passed against the petitioners/appellants.