Sultan Tanvir Ahmad, J. This Civil Revision, filed under Section 115 of the Code of Civil Procedure, 1908 (the 'Code' ), is directed against order dated 16.03.2022 passed by learned Additional District Judge, Rahim Yar Khan.
2. Facts, necessary for the disposal of the present petition, are that on 11.12.2021 the respondent filed suit, under Order XXXVII of the Code, for recovery of Rs. 203,370,360/- alongwith interes t, on the basis of cheque No. 66788342 dated 10.05.2021 drawn on by Bank Alfalah Limited, Branch Rahim Yar Khan (hereinafter called as the 'Cheque' ). On 23.02.2022 the petitioner filed application seeking permission to defend the suit and to file set-of f claim under Order VIII, Rule 6 of the Code. The learned Additional District Judge, Rahim Yar Khan, vide order dated 16.03.2022, granted the leave to defend the suit subject to condition of furnishing surety bond equivalent to suit amount i.e. 203,370,360/-, with one surety in the like amount to the satisfaction of the Court. The condition imposed in order dated 16.03.2022 has been assailed through the present petition.
3. Rana Rizwan Ahmed, learned counsel for the petitioner has argued that execution of the negotiable instrument is denied in the leave application and besides the same, several other bonafide and plausible questions necessitating grant unconditional leave and recording of evidence were also raised. The learned counsel has added that in view of the questions raised, in the leave application, the imposition of onerous condition of surety bond for such a heavy amount, which is almost impracticable to be furnished by the petitioner , is against the principles settled by the Honourable Supreme Courts; that the leave application accompanied record which clearly demonstrates misuse of the Cheque by the respondent; that various direction by this Court, copies of the suit for declaration, the suit for cancellation of the Cheque, documentary proof of selling the petitioner 's property reflecting direct payment to the respondent etc., are raising serious challenge to the consideration of the Cheque and all these documents have been totally ignored. It is contended by the learned counsel for the petitioner that the imposed condition amounts to refusal of fair trial, in the given circumstances of the case, which is clear violation of Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973. Learned counsel for the petitioner has added that the discretion as to imposing condition is exercised in arbitrary manners, by the learned trial Court, resulting into clear miscarriage of justice.
4. Conversely , Mr. A. R. Aurangzeb, learned counsel for the respondent, has submitted that the leave was granted on the categorical statement of the respondent, raising no objection on granting the leave subject to the above condition and the same was never contradicted by the petitioner , before the learned trial Court, therefore, this offer stood accepted, by the silence of petitioner; that the order-sheet reflects consensus ad idem between the parties and the petitioner now cannot deviate from the same. Learned counsel for the respondent while arguing this point as to alleged silence has relied upon the cases titled "Farzand Ali and another Versus Khuda Bakhsh and Others" (PLD 2015 Supreme Court 187), "Manzoor Hussain Versus Haji Khush i Muhammad" (2017 CLC 70) and "M/o IPC through Secretary and Others Versus Arbab Altaf Hussain and Others" (2014 SCMR 1573 ).
Learned counsel for the respondent has further submitted that Order XXXVII, Rule 3(2) of the Code confers discretion upon the learned trial Court to impose the condition or grant unconditional leave, for which no hard and fast rule is laid down by the Honourbale Supreme Court of Pakistan as well as this Court, however , once this discretion is used, this Court does not have jurisdiction to interfere in the same. In this regard, learned counsel for the respondent has relied upon the cases titled "Mian Rafique Saigol and another Versus Bank of Credit and Commerce International (Overseas) Ltd. and another" (PLD 1996 Supreme Court 749) and "Mukhtar Ahmad Gondal Versus Government of the Punjab through Secretary Health, Civil Secretariat, Lahore and 2 Others" (2000 YLR 4). It is added by the learned counsel that if the petitioner was aggrieved from grant of conditional leave then it was his duty to object the same before the learned trial Court to save his right and by not raising such objection, the respondent is estopped by his conduct which amounts to waiver arising from his silence and inaction; that on the very next date of hearing, learned counsel for the petitioner sought an adjournment without protest to arrange surety , theref ore, in terms of the law settled by the Honourable Supreme Court of Pakistan in case titled "Dr. Muhammad Javaid Shafi Versus Syed Rashid Arshad and Others" (PLD 2015 Supreme Court 212) estoppel applies to this inconsistent conduct, hence, this petition is liable to be dismissed.
5. I have heard the arguments and perused the record with the able assistance of the learned counsel of the parties.
6. The authority to grant leave to contes t such suit, unconditionally or subject to terms as to the payment in the Court, or security is conferred upon the learned trial Court, by Order XXXVII, Rule 3(2) of the Code. Here, it is appropriate to have a close look at Order XXXVII, Rule 3 of the Code, which is as follows:- "3. Defendant showing defence on merits to have leave to appear .--(1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to consideration, or such other facts as the Court may deem sufficient to support the application .
(2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security , framing and recording issues or otherwise as the Court thinks fit.
(3) The provisions of Section 5 of the Limitation Act, 1908 (IX of 1908), shall be apply to application under sub-rule (1).
(Emphasis supplied)
7. A reading of Order XXXVII, Rule 3(2) of the Code clearly reflects that imposing a condition of security or payment into the Court or granting unconditional leave is within the discretion of the learned trial Court, which is required to be exercised keeping in view the facts and circumstances of each case. Sub-Rule (1) of Rule (3) above, provides that defender of the suit, based on instru ments mentioned in Order XXXVII, upon affidavit is required to disclose such facts that would make it incumbent on the holder to prove consideration or such other facts which are sufficient to support his contention in the application for leave. Combined reading of sub-rule (1) and sub-rule (2) the Order suggests that leading factor , when considering the question as to grant of leave, on condition or without imposing condition, is the quality of the defense and the plausibility of facts on the basis of which challenge is raised to the claim in the suit or consideration of the instrument involved.
8. The grant of conditional and unconditional leave was considered in detail by the Honourable Supreme Court of Pakistan in case titled "Zubair Ahmad and another Versus Shahid Mirza and 2 Others" (2004 SCMR 1747 ).
Vastly relevant part of the said judgment is as follows:- "The grant of conditional or unconditional leave having direct nexus with the plausibility of defence, the ultimate success or failure in the suit is not the consideration for refusal or grant of leave, rather the consideration is that the grounds taken in the application for grant of permission to defend the suit are plausible and defendant has arguable case but there is no rule that if the defence is plausible, the defendant must be granted unconditional leave . If the Court forms an opinion that the defendant has a good or plausible answer to the claim of the plaintif f, it may grant unconditional leave but if the defence is not of good standard, the Court may refuse unconditional leave. However , if the Court in the light of the pleadings of the parties, considers that it is not possible to ascertain the correct factual position qua the stand of parties, may grant unconditional leave but this is not the sole criteria to determine the question of grant of conditional or unconditional leave. The plausibility of the defence, is considered sufficient ground for grant of leave to defend the suit but it does not create a right of grant of unconditional leave which is granted only in a case in which there is sufficient substance in the defence and if the defence is based only on oral allegations of false claim, the Court may not grant even conditional leave to defend the suit".
(Emphasis supplied)
9. An analysis of judicial precedents reflects that the Courts have considered it undesirable, and indeed impossible, to settle down any hard and fast rule in the matters that affect discretion of the trial Court, however , it is also deemed imperative to understand the reason of a special procedure provided in Order XXXVII of the Code and the discretion conferred therein. One of the main objects of having this procedure is to ensure restricting the defender from unduly prolonging the litigation, based on negotiable instrument, by raising untenable and frivolous defense, which is undesirable in the interest of trade and commerce. To achieve this purpose, the learned Courts have been empowered to impose condition(s) to prevent the defenders from derailing desirable speedy trial or to evade the liability by further prolonging the execution of the decree. When leave application is based on merely bald and vague allegations or baseless defense, having no plausibility , the defender is not even entitled to the grant of conditional leave. However , as entrenched by the Honourable Supreme Court in "Zubair Ahmad" case (Supra) , the learned Courts before imposing condition must form some opinion as the to the quality and plausibility of the defense taken in the leave application. When in the opinion the Court, the defender has plausible defense then while imposing the condition and its kind, it should be kept in mind that failure to fulfill the condition can result into judgment and decree against a person who if allowed to prove his defense could have succeeded but for not having resources to meet the condition imposed.
10. In the present case, the learned trial Court fixed the matter for 16.03.2022 to file the replication and on the said date upon receiving the replication, following statement of the respondent was recorded:- "Today , proceedings qua this suit is fixed for submission of written reply of the application for leave to appear and defend the suit on behalf of the plaintiff. However , at this juncture, learned counsel for the plaintiff, has categorically submitted that, he has no objection, on acceptance of application for leave to defend without admitting its contents, subject to costs in lieu of furnishing of surety bond in equivalent of claimed amoun t of Rs.20,33,70,360/- with one surety in the like amount to the satisfaction of this Court and in this regard, his signature, has been procured on margin of order sheet, as a matter of proof of his appearance/token of submissions.......".
11. No assertion made by the learned counsel for the petitioner or any observation as to the pleadings or document attached with the leave application is made and without considering the defence, its plausibility , the nature of the allegations in leave application as to the lack of consideration or other facts, the following order has been passed:- ".........Accordingly , application for leave to defend, stand accepted, conditionally , subject to furnishing of surety bond by the defendant, in equivalent of claimed amount of Rs.20,33,70,360/- with one surety in the like amount to the satisfaction of this Court by or before the next stipulated date and in addition to that, the surety would be responsible for payment of claimed amount, in case this civil suit stands decreed in favour of the plaintiff, on failure of making payment of decreed amount by the defendant and in this way , his surety would not be discharged.........".
12. There are no two views about the proposition that imposition of condition or granting unconditional leave is within the discretion of the learned trial Court and when statute confers such discretion, the exercise of the same should not be ordinarily interfered, howev er, such discretion is required to be exercised in careful manners and the same should be based upon logical and legally sustainable reasoning. Reference in this regard can be made to various decisions of the Honourable Supreme Court of Pakistan including the cases titled "Province of Punjab through Special Secretary , Specialized Healthcare and Medical Education Department, Lahore and Others Versus Khadim Hussain Abbasi" (2021 SCMR 1419 ), "Zubair Ahmad and another Versus Shahid Mirza and 2 Others" (supra) and "Habib Bank Limited, Circle Office, Multan Versus Al-Qaim Traders and another"
(1990 SCMR 686 ).
13. In "Habib Bank Limited, Circle Office, Multan" case (supra) , the Honourable Supreme Court of Pakistan observed that when exercise of the discretion by the learned Court below is unfair , unreasonable or oppressive, the same necessitates interference. In case titled "Santosh Kumar Versus Bhai Mool Singh"(AIR 1958 Supreme Court 321), while dealing with the discretion granted to the learned trial Court under Order XXXVII, Rule 3(2) of the Code, the following has been observed:- "14. We do not wish to throw doubt on those decisions which decide that ordinarily an appeal will not be entertained against an exercise of discretion that has been exercised along sound judicial lines. But if the discretion is exercised arbitrarily , or is based on a mis-understanding of the principles that govern its exercise, then interference is called for if there has been a resultant failure of justice. As we have said, the only ground given for concluding that the defence is not bona fide is that the defendant did not prove his assertions before he was allowed to put in his defence; and there is an obvious failure of justice if judgment is entered against a man who, if he is allowed to prove his case, cannot but succeed. Accordingly , interference is called for here".
(Underlining is added)
14. As far as the contentions of Mr. A.R Auragzeb, learned counsel for the respondent as to the principle of 'consensus ad idem' , based on the cases titled "Farzand Ali and another Versus Khuda Bakhsh and Others" as well as "Manzoor Hussain Versus Haji Khushi Muhammad" (supra) are concerned, I see no relevance of the said principle, which primarily require meeting of mind, mutuality of ascent, common understanding of the parties in the formulation of a contract.
15. The argument as to estoppel, raised by the learned counsel for respondent, on the basis of the conduct of the petitioner and the purported silence or inaction, is not applicable to the facts of the case. On 16.03.2022 the impugned order was passed when the case was fixed for 24.03.2022 for filing surety but before said date of hearing before the learned trial Court, the present petition has been filed raising the challenge to the imposition of condition. Reading of the record does not reflect any such conduct or silence, which amounts to acceptance or applicability of the principle of estoppel, therefore, these contentions of Mr. A.R. Aurangzeb, the learned counsel for the respondent, are rejected being misplaced.
16. The impugned order clearly depicts that the while granted the leave to defend the suit, the condition has been imposed, merely on the basis of unilateral statement of respondent, without even considering any dispute raised in the leave application. It is also apparent that exercise of discretion by learned trial Court, conferred under the Code , is based on some misunderstanding of above discussed principles that governs such exercise of discretion.
17. For what has been discussed above, this petition is allowed and the impugned order , passed by learned Additional District Judge, Rahim Yar Khan, to the extent of imposing the condition is set-aside and the matter is remanded with the direction to decide the same afresh, after hearing both the parties, preferablly within one month from the date of receipt of certified copy of this judgment. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.