' SHAHID JAMIL KHAN, J.--- This appeal is filed against judgment and decree dated 26.03.1994 passed by Civil Judge Lahore, decreeing the suit for damages of Rs.5,000,000/- (Rupees five Million) against the appellants.
2. Facts of the case are that a suit for recovery of Rs.80,000,000/- (Rupees Eighty Million) as damages along with declaration and injunction, was filed by respondents Nos.1 to 6 ("plaintiffs").
Declaration and damages were claimed against the appellants ("defendants" -Nos.1 to 5) whereas, injunction was prayed against respondents Nos.8 and 9. ("lending institutions"), for restraining them to take any legal action against the plaintiffs/respondents.
' As per contents of plaint; an agreement was executed between respondents Nos.1 to 5 and appellants, through sale deed dated 22.02.1988. Shares/interest of the respondents/plaintiffs in M/s Chanab Steel Castings (Pvt.) Limited (respondent No.7 "the Company"), were transferred to appellants/defendants through M/s Ilyas Foundry (owned by the appellants). As a consequence, respondents/plaintiffs tendered their resignations, being directors of the Company; transferred all assets and liabilities on the book value to the appellants, who agreed to be liable/responsible for current liability only. The respondents/plaintiffs paid off the financial obligation as agreed, yet a notice dated 11.03.1989 was served upon them by the appellants/defendants through Mr. M. Nazir Sheikh Advocate; falsely and incorrectly alleging that respondents failed to liquidate the liabilities of Muslim Commercial Bank Limited ("MCB"); No Objection Certificate for change of directorship (to be obtained from the lending institutions) was not furnished and it was also alleged that the respondents/plaintiffs had intended to commit fraud upon the appellants to deprive them from their amounts. The appellants/ defendants denied obligations under the agreement and declared that they had no concern with the Company.
' As averred in the plaint; the respondents/plaintiffs paid off financial obligation towards MCB; permission for change of directorship was obtained from the lending institutions and that after change of the directorship they were not liable to pay any financial obligation of the Company. The notice was allegedly circulated amongst the financial institutions and others, which caused personal as well as business loss; Rs.80,000,000/- (Rupees eighty million) as token damages were claimed against the appellants.
3. The suit was resisted by all the appellants/defendants except defendant No.6 (the Company) which was disowned by the appellants as well as respondents. Written statements were filed by the lending institutions (defendants Nos.7 and 8) respectively. The appellants/ defendants moved an application under Section 34 of the Arbitration Act, 1940 for stay of proceedings which was dismissed for non-prosecution on 06.03.1990 and the application for restoration met the same fate.
Application under Order VII, Rule 11, C.P.C. Was also dismissed with an observation that maintainability of the suit would be examined after recording evidence. After various opportunities, to file written statement, the appellants were proceeded ex parte. Applications for setting aside ex pane order and for producing defence in the proceedings were, also dismissed. Keeping in view the plaint and written statements filed by the lending institutions, following issues were framed:-
1. "Whether the plaintiffs have not come with clean hands? OPD.
2. Whether this court has no jurisdiction to adjudication upon the matter? OPD.
3. Whether the suit is not maintainable? OPD.
4. Whether the plaintiffs are entitled to decree as prayed for? OPP.
5. Relief."
4. Rashid Aslam, one of the plaintiffs/respondents, appeared in the witness box as PW-1. He deposed about the agreement, stating that the loan liability was paid off by the plaintiffs/respondents and current liabilities were to be paid by the defendants/appellants. Instead of complying the terms of the agreement, defendants/appellants issued a notice with false accusations which caused damage to reputation of the plaintiffs/respondents and injured their reputation; due to the circulation of notice, all financial institutions and traders had closed their working relationship with the plaintiffs/respondents. Certain documents were also exhibited in his examination-in-chief. PW-1 was cross-examined by the counsel of the lending institutions to establish that the plaintiffs/ respondents were also liable to pay the outstanding financial liabilities.
' One Malik Zarar Ahmad appeared as PW-2; stated that he visited steel factory of the plaintiffs/respondents where Jamil Chohan (one of the defendants/appellants) was sitting, who stated that plaintiffs/ respondents were fraud people and defendants/appellants had been defrauded; it was deposed that due to the statement of Jamil Chohan, he stopped his business with the plaintiffs/respondents.
5. After discussing the evidence; trial court declined to pass decree for injunction against the lending institutions (defendants Nos.7 and 8), however, passed a decree for damages of Rs.50,00,000/- (Rupees Five Million) against the appellants (defendants Nos.1 to 5) which costs.
Issue No.4 was decided in favour of the respondents/ plaintiffs; Issues Nos.1 to 3 were found proved against the lending institutions (defendants Nos.7 and 8) for not producing any evidence.
6. The appeal was argued by the learned counsel for appellant No.3; whereas appellant No.1 (present in person) has adopted the arguments of the learned counsel. None is present on behalf of the respondents who have already been proceeded ex parte.
' Learned counsel for the appellant No.3 has pressed this appeal only to the extent of prayer that impugned judgment and decree is not sustainable for lack of evidence. Rest of the prayers are neither pressed nor argued. It is submitted; respondents/plaintiffs could not prove the contents of plaint through evidence, therefore, the suit merits dismissal; paragraph No.3 of the plaint is referred to contend that respondents/plaintiffs could not discharge financial obligations to the satisfaction of lending institutions; written statement filed by the lending institutions is also relied upon for this argument. Further submits that filing of the suit was tainted with mala fide; he explains that the intention behind filing the suit was to restrain the lending institutions (defendants Nos.7 and 8) from taking any legal action against the respondents/ plaintiffs on the basis of personal guarantees submitted by them. Argues that statement of PW-2 alone could not be relied upon for awarding damages, ignoring that accusations leveled by him were never asserted in the plaint and that PW-1 had not uttered a single word regarding the accusations. Further argues that to prove issuance and service of notice, the Advocate was never produced in the witness box, therefore issuance or service of the notice upon the respondents/plaintiffs was also not proved.
' Also argues that no proof of circulation of the notice amongst financial institutions was produced.
Concludes that neither injury caused to the reputation/business could be proved nor quantum of damages was determined through speaking order.
7. Heard, record perused.
8. Perusal of record shows that issues Nos.1 to 3 were decided in cursory manner by writing simply that no evidence was produced. It evident from record that PW-1 was cross-examined by the learned counsel for the lending institutions (respondent Nos.7 and 8) and documents were exhibited to prove the outstanding financial liability against the plaintiffs/respondents but the same has not been discussed the impugned judgment. Preliminary objections were taken by the lending institutions regardin maintainability of the suit and mala fide intention of the plaintiffs. It was specifically asserted in the written statements that the suit was filed after issuance of notice for recovery on the basis of personal guarantees of plaintiffs/respondents against the loan. It is also noticed that the issue raised in the plaint, regarding change of directorship in the Company and their liabilities, fell exclusively within jurisdiction of Deputy Registrar Joint Stock Companies, which had already been invoked by the appellants. In presence of the effective contest on maintainability by the lending institutions (respondents Nos.7 and 8), such evasive findings have rendered the judgment/decree as defective. Though lending institutions have not challenged the impugned judgment, yet argument of learned counsel that suit was filed with mala fide intention to thwart recovery of loan, is found supported from record.
9 Though defendants were proceeded ex parte and trial court had jurisdiction to pass decree without recording evidence under Order IX Rule 6 of C.P.C., yet it was not absolved from duty to apply judicious mind on the basis of available record. The Apex Court examined this aspect of jurisdiction in Rehmat All v. Additional District Judge, Multan and others (1999 SCM R 900); to highlight legislative intent, some excerpts from earlier judgments were reproduced, which are quoted here for ease of reference:- "12. The words "the Court may proceed ex parte and pass decree without recording evidence" in rule 6(1)(a) as instead by Law Reforms Ordinance, 1972 came up for interpretation before this Court in the case of Shamroz Khan and another v. Muhammad Amin and others (PLD 1978 SC 89) and Mr. Justice Dorab Patel observed as under:-- "The words 'and pass decree without recording evidence' were inserted by the Law Reforms Ordinance, 1972 and we would observe here that before this Amendment the consistent practice of the Courts was to record evidence before decreeing a suit under this rule. This practice of recording evidence could lead to delays and as submitted by Mr. Lnayat Elahi the object of the amendment was to empower the Courts to decide a case without recording evidence. But does this mean that the question Was left to the discretion of the Courts or does it mean as submitted that it was incumbent on Courts to decree a suit without recording evidence? If Mr. Lnayat Elahi's submission is correct, Courts would be compelled to decree patently time-barred suits or suits which were patently dishonest or which contained absurd and exaggerated claims. Such an intention cannot lightly be attributed to the Legislature now would we be justified in doing so because the amended rule now reads: '---- the Court may proceed ex parte and pass decree without recording evidence---- This means that the Court may proceed ex parte and that it may pass a decree without recording evidence. The word 'may' here imports discretion and means may, not shall, therefore, when a Court strikes off the defence of a defendant, it has further to decide, in the exercise of its discretion, whether it should decree the claim against the defendant after recording evidence or without recording evidence, and like all discretion vested in the Courts, this discretion must be exercised judicially'. " (emphasis supplied)
' In another judgment; Provincial Government through Collector, Kohat and another v. Shabbir Hussain (PLD 2005 SC 337) while holding that courts should not shut their eyes from factual and legal aspects involved in a matter, in the course of passing ex-parte decree; it was observed that a court cannot decree a suit for declaration to export HEROIN out of Pakistan, merely for the reason that no one came forward to oppose it.
10. The contention of learned counsel, that the statement of PW-2 was made basis for awarding the impugned damages, is confirmed from the findings of trial court recorded at page 10 of the impugned judgment. It is correct that the accusations leveled by PW-2 were neither asserted in the plaint nor any issue was framed for its determination. It is settled law that evidence cannot be led beyond the pleadings, reliance is placed on Messrs Essa Engineering Company (Pvt.) Ltd. And another v. Pakistan Telecommunication Company Limited and another (2014 SCMR 922). The Hon'ble Court held; "pleadings of the parties are the bench mark of their respective claims on which issues are drawn and evidence is led which is restricted to the issues struck between the parties alone and not beyond them. If any evidence beyond the purview of issues does come on record, no party on such evidence set up altogether a new, case and press the same for getting relief merely on the basis of an out of context evidence."
11. Contents of the plaint show that the damages were claimed for issuance of notice by Advocate containing false allegations and its circulation amongst the financial institutions. Neither any proof regarding circulation of the alleged notice was produced, in evidence, nor any proof was given regarding injury caused to the business. Since the Advocate who allegedly issued the notice was not produced in witness box, therefore, very issuance of notice is also not proved.
' So far falsehood of the allegations in the impugned notice are concerned, the same were also not proved through evidence, rather the assertion regarding liability towards the financial institutions in light of the objections by lending institutions (respondents Nos.7 and 8) cast reasonable doubt whether the allegations, if at all, leveled in the notice allegedly issued by the Advocate, were false?
12. For what has been discussed above, we are of the view that plaintiffs/respondents could not prove their case on the face of record and through the evidence led, therefore, findings on issue No.4 are reversed and same is decided against the plaintiffs/respondents. The suit merits dismissal. Order accordingly.
' The appeal is allowed.