AHMAD NADEEM ARSHAD, J. Through this Regular First Appeal, appellants have called into question the validity and propriety of judgment & decree dated 25.04.2015 whereby suit of respondent No.1 for recovery of Rs.95,00,000/- under Order XXXVII Rule 1 & 2 of the Code of Civil Procedure, 1908 (CPC), was decreed.
2. Pithily, necessary facts forming background of proceedings in hand are that respondent No.1/plaintiff (hereinafter referred to as respondent No.1) instituted a suit for recovery of Rs.95,00,000/- against the appellants and respondents No.2 to 8 under Order XXXVII Rule 1 & 2 CPC by contending that there were cordial relations between respondent No.1 and deceased Ghulam Mustafa and on latter's desire he contracted marriage with Samina Batool alias Samiya Batool (allegedly adopted daughter of deceased Ghulam Mustafa). He further asserted that deceased Ghulam Mustafa, who was a businessman, borrowed an amount of Rs.95,00,000/- from him for business with the promise to give monthly profit of Rs.2,00,000/- which was given by him on 14.02.2010 in presence of witnesses and in lieu thereof deceased Ghulam Mustafa issued a cheque No.XC322939 of his account No.5715 at National Savings Center Muzafargarh; that Ghulam Mustafa passed away on 10.07.2010 due to heart failure; that said Ghulam Mustafa belonged to Jafaria sect, hence, his estate devolved upon defendants No.1 to 03 who promised to return the amount borrowed by deceased after selling his estate but despite repeated demands they adopted delaying tactics and finally refused to pay the amount. Hence, the respondent No.1 was constrained to institute the suit.
3. On the other hand, appellants/defendants No.1 to 03 (hereinafter referred to as appellants) hotly contested the suit by filing written statement in contrast whereby they raised certain legal as well as factual objections. On legal side, they contended that respondent No.1 has no cause of action and approached the Court with unclean hands and filed a false & frivolous suit just to harass and blackmail the appellants which is liable to be dismissed with special costs u/s 35-A of CPC. Further added that the instrument on the basis of which suit has been filed is not a cheque, hence, the Court has no jurisdiction to try the matter. On factual side, appellants denied the averments of plaint by pleading that neither any amount was borrowed by deceased Ghulam Mustafa from the respondent No.1 nor he issued the alleged cheque to the respondent No.1. Further asserted that the suit has been filed on the basis of a withdrawal slip which is not a negotiable instrument rather the same is meant to withdraw profit from the National Saving Center.
4. Learned Trial Court framed following issues out of the divergent pleadings of the parties: ISSUES
1. Whether the plaintiff has no cause of action to file the suit? OPD
2. Whether this court has no jurisdiction to entertain the suit, because, disputed documents is not cheque? OPD
3. Whether the plaintiff did no approach the court with clean hands, hence he is not entitled for any relief? OPD
4. Whether Ghulam Mustafa, predecessor in interest of the defendants belonged to shia sect and defendant No.3 did no inherit the legacy of Ghulam Mustafa, hence, she is not bound to fulfill the obligation of said Ghulam Mustafa? OP defendant No.3
5. Whether the defendants are entitled of special costs under section 35-A CPC? OPD
6. Whether the disputed cheque is forged fictitious, collusive and illegal? OPD
7. Whether the plaintiff is entitled to the relief as prayed for? OPP
8. Relief.
5. After framing of issues, trial Court invited the parties to adduce their respective evidence, recorded their evidence pro & contra, provided opportunity of hearing and then decreed the suit of respondent No.1 via judgment & decree dated 25.04.2015 (hereinafter referred as impugned judgment & decree).
6. Learned counsel appearing on behalf of appellants inter-alia contends that impugned judgment & decree is against the facts & law as well as result of mis-reading/non-reading of the evidence available on record; that respondent No.1 miserably failed to prove his suit but learned Trial Court decreed the suit; that deceased Ghulam Mustafa was not a businessman rather he was a class-IV employee; that the suit was not maintainable as the withdrawal slip is not a negotiable instrument, hence, the Court had no jurisdiction to try the matter.
7. Contrarily, learned counsel for the respondent No.1 opposed the appeal with vehemence and prayed for its dismissal by adding that there is nothing wrong with the impugned judgment & decree and same has been passed by the Court after due appreciation of the evidence available on record.
8. I have heard learned counsel for the parties at length and perused the record with their able assistance.
9. Appellants questioned the maintainability of the suit on the ground that it does not disclose any cause of action and also raised objection with regard to jurisdiction of the Court. Learned Trial Court, keeping in view the objections of the appellants, framed issues No.1 & 2 as follows:
1. Whether the plaintiff has no cause of action to file the suit? OPD
2. Whether this court has no jurisdiction to entertain the suit, because, disputed documents is not cheque? OPD The main grievance of the appellants was that respondent No.1 instituted suit for recovery under Order XXXVII Rule 1, & 2 C.P.C. as summary suit on the basis of alleged cheque allegedly issued by Ghulam Mustafa deceased by treating it a negotiable instrument and produced said alleged cheque as Exh.P.1 which is not a cheque rather "withdrawal slip" issued by National Saving Center and claimed that this slip does not fall within the definition of cheque as defined in Negotiable Instruments Act, 1881 (hereinafter referred to as the Act, 1881).
Section 06 of the Act, 1881 defines a cheque as under: "Cheque", a "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
In appendix-I forms of negotiable instruments, the form of cheque is given as under: No ... Date. ....
To AB, etc. (Bank)
Pay to EF, .... bearer Or ..... order Rupees.....only, value received Rs .... CD (Drawer)
From perusal of definition and the form supra, it appears that cheque is in the nature of an order from the accountholder to the bank directing it to pay the specified amount out of his account.
Whereas, Rule 04 of the "National Saving Deposit Accounts Rules, 1974", (hereinafter referred to as Rules) defines the issuance of withdrawal slip book as under:
4. "The depositor will be assigned an account number and will be given a slip in Form DA-2 acknowledging the amount deposited. The depositor will also be issued a Withdrawal Slip Book containing 10 slips (D.A-4) and a passbook simultaneously or if the first deposit has been made wholly through a cheque on the clearance of a cheque."
Rule 7 prescribes the procedure for withdrawal of amount in the following terms:
7. "The customer can withdraw money by submitting the signed withdrawal or acknowledgment slip (Form D.A-4) personally or through agent or through banking clearing house or any other channel authorized by CDNS for the purpose......."
From perusal of withdrawal slip (Exh.P.1), it appears that line one is with regard to the name, line two is with regard to sum and it does not contain any direction to the Saving Center to pay an amount specific in the line No.2 to a person holding said withdrawal slip. Keeping in view Rules and withdrawal slip, it can be safely drawn that it is for the account holder to withdraw amount either personally or through agent or through banking clearing house or any other channel but nowhere in the said withdrawal slip it was mentioned that through this slip the Saving Center is directed to pay the specified amount to anyone else. The sole purpose of issuing withdrawal slip by the National Saving Center is to withdraw the amount deposited by the accountholder and the profit/interest deposited by the Saving Center.
10. Negotiable instrument defined in section 13 of the Act, 1881 which reads as under:
13. "Negotiable instrument".(l) A negotiable instrument means a promissory note, bill of exchange or cheque payable either, to order or to bearer.
Explanation (I). --- A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting, transfer or indicating an intention that it shall not be transferable.
Explanation (II). A promissory note, bill of exchange or cheque is payable to bearer which, is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.
Explanation (III), A promissory note, bill of exchange or cheque, either originally or by endorsement, is expressed, to be payable to the order of a specified person, and not to him or his order it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees.
Under the definition, a negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer, and a promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person and does not contain words prohibiting, transfer or indicating an intention that it shall not be transferrable. Whenever a question arises as to whether or not a document in an original language is negotiable instrument, the point will have to be decided not by looking to the definition of negotiable instrument, but independently of its provisions. The Court will find out how such instrument has been treated in the past and if it appears that according to usage or custom such instruments have been treated as negotiable instruments then they will be treated as such. From perusal of the Rules, Act, 1881 and withdrawal slip in juxtaposition it appears that said withdrawal slip does not amount to negotiable instrument.
11. Under Order XXXVII, Rule 2 C.P.C. all suits upon bill of exchange, Hundis, or promisor notes, may, in case the plaintiff desires to proceed hereunder be instituted by presenting a plaint in the forum prescribed. The question arises that whether the document relied upon by plaintiff is negotiable instrument in the shape of bill of exchange, Hundi or promissory note and is triable by the same provision of law or not. For the said purpose, the contents of the deed is material to be taken into consideration. If the contents of the deed fall in the definition of section 13 of the Act, 1881, then the plaintiff has option to file the suit in the ordinary Court of civil jurisdiction or in the special Court exercising the powers vested in them under Order XXXVII C.P.C. As discussed above, the withdrawal slip does not fall within the definition of negotiable instrument, therefore, respondent No.1's suit is not maintainable.
12. Admittedly, suit was not instituted against Ghulam Mustafa by whom the withdrawal slip was allegedly attributed to be issued/drawn as he had been died at that time and suit was instituted against his legal representatives after his death. It is a settled principle of law that where the claim in the suit was based on bill of exchange, hundi, promissory note or instrument drawn by the bank as required under Order XXXVII Rule 2 (1) CPC, the same was condition precedent for bringing a suit under summary chapter against a person who was drawer of instrument mentioned in Order XXXVII, Rule 2 (1) CPC. Suit under the summary chapter could only be filed against the drawer of an instrument and not against any other person. The maker/drawer of withdrawal slip, Ghulam Mustafa (deceased) had died before the institution of the suit. For a moment, if the withdrawal slip is presumed to be a cheque, the said cheque thus ceased to have any effect as a negotiable instrument on the death of its maker. The legal representatives of the deceased did not sign the withdrawal slip (Exh.P.1), therefore, they were not liable for the payment of said cheque. They are only liable if they signed their name and expressly limits their liability to the extent of the assets received by them as such. In this regard, the provisions of sections 29 & 29-A of the Act, 1881 have direct relevance which are reproduced as under:
29. Liability of legal representative signing---A legal representative of a deceased person who signs his name to a promissory note, bill of exchange or cheque is liable personally thereon Unless he expressly limits his liability to the extent of the assets received by him as such.
29A. Signature essential to liability.---No person is liable as maker, drawer, endorser or acceptor of a promissory note, bill of exchange or cheque who has not signed it as such: Provided that where a person signs any such instrument in a trade or assumed name he is liable thereon as if he had signed it in his own name.
This Court while deciding a question whether under order XXXVII Rule 2 C.P.C a suit for recovery on the basis of cheque can be filed against the legal heirs of the person who had issued the cheque concluded this crucial question in a case titled as "MUHAMMAD ABAID ULLAH V. ATTIQUE-UR- RAHMAN AND 08 OTHERS" (2015 CLD 307 = 2015 CLC 641) in the following terms: "The aforementioned provisions make it clear that a party who is not a drawer or maker of a cheque/bill of exchange is not liable thereon and accordingly cannot be sued under Order XXXVII, Rule 2, C.P.C. Under Section 29-A of the Negotiable Instruments Act 1881, in order for a legal representative of a deceased person to become liable under the cheque issued by his predecessor, it is necessary that he signs the said cheque for assuming the liability thereunder.
However, this is not the case here as respondents did no such thing. The respondents, therefore, were not liable to the petitioner under the said cheque issued by their predecessor."
Similar view was also expressed by this Court in "BUSHRA BIBI & OTHERS V. ADDITIONAL DISTRICT JUDGE & OTHERS (2022 CLD 900), as under: "There remains no doubt that defendants/petitioners who are neither makers, drawers or endorsers nor acceptors of cheque and even presentation for encashment and dishonoring of the alleged cheque during lifetime of Muhammad Yousaf/predecessor-in-interest of defendants/petitioner cannot legally authorize plaintiff/respondent No.2 to institute suit under Order XXXVII, Rule 2 C.P.C. against present petitioners/defendants/successors-in-interest of the deceased Muhammad Yousaf, hence, suit was not maintainable before trial court."
13. Another crucial fact is that whether said withdrawal slip was presented before the National Saving Center for its encashment? Perusal of plaint it appears that respondent No.1 did not mention that he presented said withdrawal slip before National Saving Center Muzaffargarh. During cross- examination, P.W.1/respondent No.1 admitted that he did not present Exh.P.1 for encashment. Exact deposition is as under: {{URDU TEXT}} He further deposed as under: {{URDU TEXT}} As such, the withdrawal slip was never dishonored. For filing of a suit under Order XXXVII CPC on the basis of a cheque, it is necessary for the plaintiff to present the cheque to the bank for its dishonor in order to accrue cause of action to him against the drawer of the cheque. If a cheque is not presented to the bank for its payment, the procedure provided for in order XXXVII CPC shall not be available to a person holding the cheque and the suit so instituted shall not be maintainable. The reason is not hard to fathom as in the absence of presentment of the cheque before the bank, it shall remain at best a piece of evidence corroborating the original loan transaction but did not provide any cause of action. Section 30 of the Act, 1881, defines the liability of drawer in the following terms: "30. Liability of drawer. --- (1) (a) The drawer of a bill of exchange by drawing it, engages that on due presentment it shall be accepted and paid according to its tenor, and that it be dishonoured, he will compensate the holder or any endorser who is compelled to pay it, and
(b) the drawer of a cheque by drawing it, engages that in the case of dishonour by the drawee he will compensate the holder; Provided that due notice of dishonour of the bill or cheque has been given to or received by the drawer as hereinafter provided.
(2) The drawee of a bill of exchange is not liable thereon until acceptance in the manner provided by this Act."
This Court in a case titled "KHALIFA AZHAR MUMTAZ V. GHULAM AKBAR (2014 CLD 995), observed as under: "Admittedly, the cheque was never presented in the bank for payment. When the cheque was never presented for payment, in the light of section 72 read with section 84 of Negotiable Instrument Act (XXVI) of 1881, therefore, there is no refusal by the drawer or the bank for payment of cheque, therefore, no cause of action accrued to the plaintiff for filing of suit under Order XXXVII of the C.P.C."
Further held that: "It clearly reveals that cheque is only payable on demand and cause of action arose only when such demand is not honored. When there is no demand and there is no question of dishonor of demand, therefore, on this view of the matter also the suit was not maintainable."
This Court while explaining the said situation in a case titled as "ZAHOOR AHMAD V. MASTER MUSHTAQ AHMAD" (2016 CLC 937) held as under: "The various provisions of the Negotiable Instruments Act dealing with presentment clearly bring out the facts that unless a cheque is presented for payment, the drawer of the cheque will be absolved from liability. In other words, the presentment of a cheque is a condition precedent in order for a payee to charge the drawer/maker of a cheque. It is thus evident that for filing of a suit under Order XXXVII, C.P.C. based on a cheque, it is necessary to present that said cheque to the bank. Admittedly, the 16 cheques allegedly given by the appellant-defendant were not presented for payment. The suits under Order XXXVII, C.P.C., therefore, were not maintainable before the Additional District Judge. It may again be emphasized that the tenor of the plaint showed that the respondent-plaintiff had relied solely upon the cheques to agitate his cause of action against the appellant-defendant."
14. Another fact is also very important that respondent No.1 interpolated the withdrawal slip by inserting date on it as 14.05.2011. That fact was also admitted by respondent No.1 himself during cross-examination while recording his statement as P.W.1. The exact deposition is as under: {{URDU TEXT}} The respondent No.1, during cross-examination, further deposed that the said withdrawal slip was given to him at the time of advancement of the loan. The exact deposition of P.W.1 is as under: {{URDU TEXT}} If the withdrawal slip was given to respondent No.1 on the date of advancement of loan then why deceased did not incorporate the date on the said withdrawal slip.
From the perusal of plaint, it is evident that drawer Ghulam Mustafa s/o Muhammad Ramzan died on 10.07.2010. It seems that after the death of Ghulam Mustafa deceased, respondent No.1 got the withdrawal slip with the help of the relatives who were living with deceased and were not entitled for any share from his legacy according to rule of succession set-forth by Jaferia sect and then manipulated it by inserting a date after the death of drawer and used it for instituting the suit.
16. In view of above discussion, I have reached to irresistible conclusion that findings of the learned Trial Court upon issues No.1 & 2 are not sustainable and liable to be reversed being against the facts & law. The suit filed by respondent No.1 under summary procedure of Order XXXVII Rule 1 & 2 C.P.C. against the appellants/defendants/successors in interest of the deceased Ghulam Mustafa was not maintainable before the Trial Court. Moreover, it has also been held that the withdrawal slip is not a negotiable instrument as defined in the Act, 1881. Hence, the same are accordingly reversed. Therefore, there is no need to discuss the other merits of the case as this Court has concluded that the suit of respondent No.1 was not maintainable.
17. For the foregoing reasons, this appeal is allowed. Consequently, impugned judgment & decree of learned Trial Court dated 25.04.2015 is set aside. Record of learned Trial Court alongwith copy of this judgment be sent back immediately. Learned Trial Court is directed to return the plaint in the suit titled "Muhammad Musharaf Hussain Vs. Ghulam Mustafa through LRs" to the respondent No.1/plaintiff under Order VII, Rule 10 C.P.C. for filing before the appropriate forum as neither the successors in interest of the maker can be sued under Order XXXVII Rule 2 C.P.C. nor the withdrawal slip falls within the definition of negotiable instruments. Parties are directed to appear before the learned District Judge, Muzaffargarh for further proceedings on 10.10.2022. No order as to cost.