AURANGZEB, J.- Phis appeal under section 96 CPC has been filed against the impugned judgment dated 21.07.2020, passed by learned Additional District Judge-X, Peshawar, whereby, the suit filed by the respondent, was decreed.
02. Short history of this appeal is that owing to the friendly relationship between the parties, the respondent/plaintiff namely Sharif Khan, on the request of the petitioner/defendant Ijaz Ahmad, had given him an amount of Rs.92,50,000/- as a loan for three months, with the intention to help him in his critical financial position. After expiry of two months period, the respondent/plaintiff asked the petitioner/defendant to return the said loan, on which, the petitioner/defendant issued cheques bearing No.00008227 dated 10/01/2017, No.00008228 dated 10/01/2017 of Rs.50,00,000/- and Rs.42,50,000/-, respectively to the respondent/plaintiff. The said cheques when presented before the Bank concerned, were dishonoured due to insufficient balance in the account of the petitioner/defendant. It was averred that the petitioner/defendant was time and again asked for return of loan, but, he started delaying tactics on one pretext or the other, which necessitated to file the suit.
03. On service of summons, the petitioner/defendant put his appearance before the learned Court below and contested the suit by filing reply/written statement instead of filing an application for leave to defend. Upon objection, the learned counsel for the petitioner/defendant submitted an application for clarification that the word -permission" was inadvertently not incorporated and he made a request for considering the written statement as an application for leave to defend.
However, vide order dated 08.09.2018, the application for leave to defend was declined. Feeling aggrieved, the petitioner/defendant assailed the said order of the learned Court below before this Court by filing Civil Revision No.723-P/2018, which was allowed vide judgment dated 23.03.2019 with the direction to the learned trial Court to decide the application for leave to defend in accordance with law. Later on, vide order dated 19.09.2019, the application for leave to defend was accepted by the learned Additional District & Sessions Judge-X, Peshawar subject to the condition that the petitioner/defendant shall furnish surety bonds/security to the tune of 1/4 of the amount with two sureties each in the like amount to the satisfaction of the said Court. The said order of the learned Court below was complied with by the petitioner/defendant, whereafter, issues were framed, however, on 12.11.2019, the sureties submitted an application for recalling their security/bail in favour of petitioner/defendant, consequently, notice was given to the petitioner/defendant and ultimately, vide order dated 15.01.2020, the surety already submitted were absolved and the petitioner/defendant was directed to submit fresh surety bonds. The case was lingering on by the petitioner/defendant, on one or other pretext, however, on 13.07.2020, one Amir Nawaz became surety of the petitioner/defendant and submitted surety bond coupled with Fard Jamabandi of Mouza Mira Haider Abad Had Bast No.166 having property in khata No.86/105, khasra No.220, the said Fard was sent to the Tehsildar for verification, which was found bogus, resultantly, the learned Trial Court directed the SHO concerned to lodge criminal case against the said surety as well as petitioner/defendant and right of defence of the petitioner/defendant was struck off, and the suit of the respondent/plaintiff was decreed vide judgment and decree dated 21.07.2020. Hence, this regular first appeal.
4. I have heard arguments of the learned counsel for the parties and perused the record with their valuable assistance.
5. Perusal of the record transpires that the respondent filed suit for recovery of the amount under Order XXXVII Rule 2 CPC against the appellant/defendant. The appellant appeared before the Court, filed written statement and upon objection, the appellant/defendant filed an application to consider the written statement as an application for leave to defend, but the same request was declined by the learned Trial Court vide order dated 08.09.2018, the said order was challenged by the appellant before this Court by filing appeal, which was accepted and the written statement filed by the appellant was considered as leave to defend. After remand of the case, the learned Trial Court allowed the application for leave to defend and directed the appellant to furnish surety bonds to the tune of 1/4 of the amount to be claimed vide order dated 19.09.2019, the appellant submitted surety bonds. On 12.11.2019, the sureties submitted application for recalling their security/ bail in favour of appellant. Notice was given to the appellant, and on 15.01.2020, the surety already submitted were absolved and the appellant was directed to submit fresh surety bonds as per order dated 19.09.2019. On 13.07.2020, the appellant produced one Amir Nawaz s/o Zafar Khan along surety bonds, Fard Jamabandi as surety. The learned Trial Court forwarded the said documents for verification to the Tehsildar, and according to the report of the Tehsildar, the documents produced by the appellant are bogus and criminal case was registered against the appellant as well as Amir Nawaz (the surety of the appellant). The appellant failed to comply with the order of the Court, and the learned Trial Court decreed the suit in favour of the respondent vide order dated 21.07.2020.
06. Before I proceed further, I may briefly consider the scheme of Order XXXVII CPC. The said order deals with summary procedure and its Rule 2 is enabling provision, which deals with the institution of summary suit. According to it, summon of the suit is to be issued first and when the defendant appears, he has to obtain leave from the Court to defend the suit. A detailed procedure for the appearance of the defendant is provided in Order XXVII Rule 3 CPC, which shows that in the matter of grant of leave to defend with condition or without condition, the Court has been given discretion in the matter of attaching condition to the grant of leave to defend. In this regard provisions of Rules 2 and 3 of Order XXXVII CPC are reproduced as under: "SUNLVIARI PROCEDURE ON NEG'OTIABLE INSTRUMENTS
1. This order shall apply only to the High Court Ito the District Court and to any other Civil Court notified in this behalf by the High Court.]
2. -(1) All suits upon bills of exchange hundies or promissory notes, may, in case the plaintiff desires to proceed hereunder 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 he admitted and the plaintiff shall be entitled to a decree la) for the principal 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 d) for such sum for costs as 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.
3. - (1) The Court shall upon application by the defendant give leave to appeal- and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove 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 apply to applications under sub-rule (1)]
4. After decree the Court may under special circumstances, set aside the decree and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do and on such terms as the Court thinks fit.
5. In any proceedings under this Order the Court may order the bill hundi or note on which the suit is founded to be forthwith deposited with an officer of the Court and may further order that all proceedings shall he stayed until the plaintiff gives security for the costs thereof The holder of every dishonoured bill of exchange or promissory note shall have the same remedies for the recovery of the expenses incurred in noting the same for non-acceptance or non-payment or otherwise, by reason of such dishonour, as he has under this Order for the recovery of the amount of such bill or note.
6. Save as provided by this Order the procedure in suits hereunder shall be the same as the procedure in suits instituted in the ordinary manner.
7. According to Rule 1 of Order XXXVII CPC, summary procedure on negotiable instruments is meant for the High Court, District Court and any other civil Court. all summary suits are instituted upon bills of exchange hundies or promissory notes on presentation of the plaint in the form prescribed. The defendant cannot defend the suit unless he obtained leave to defend and in default of his obtaining such leave 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.
8. The above-quoted provision of sub-Rule (2) of Rule 3 enables the Court that 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.
9. The failure of the appellant in submission of security bond, a pre-condition for leave to defend, amounts to default in obtaining leave to defend, enabling the Court to pass a decree in favour of the plaintiff. The worthy Apex Court in the case reported as "Haji Ali Khan and Company, Abbottabad and 8 others versus M/s Allied Bank of Pakistan Limited, Abbottabad"
(PLD 195 SC 362), held as under: XXXVII. Rr.1, 2, 3 & 4--Interpretation, scope and application of OXXXVII, Rr.1, 2, 3 & 4. C.P.C. A perusal of Rule 1, Order XXXVII, C. P.C. indicates that the Order is applicable to the High Court, to the District Court and to any other Civil Court notified in this behalf by the High Court. Under sub-rule (1) of Rule 2, it has been laid down that all suits upon bills of exchange, hundies or promissory notes, may, in case the plaintiff so desires, be instituted by presenting a plaint in the form prescribed, but the summons shall be in Form No.4, in Appendix B or any such other form as may be from time to time prescribed.
Sub-rule (2) of Rule 2 of the Order envisages that if a suit is filed in terms of sub-rule (I), the defendant shall not appear to defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend. It .further contemplates that 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 in terms of sub-clauses (a).
(h) and (c) provided in resold sub-rule (2). Whereas, sub-rule (3) thereof lays down that a decree passed under the above rule may he executed, forthwith.
Rule 3 deals with a case in which a defendant after receipt of the summons in Form No.4 as provided in Appendix is to the C.Y.C. appears in Court within the prescribed lime, namely. 10 days specified in the above Form and applies for leave to defend by disclosing upon an affidavit such .facts as would make it incumbent on the holder i.e. the holder of the documents referred to in sub-rule (1) to Rule 2, namely, bills of exchange, hundies or promissory notes, to prove consideration or such other .facts as the Court may deem sufficient to support the application.
Whereas sub-rule (2) of Rule 3 lays down that 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 may think lit. Sub-rule (3) thereof which was incorporated by Ordinance No. X of 1980, makes the provisions of section 5 of the Limitation Act, 1908, applicable to application under sub-rule (I) of Rule 3.
Rule 4 of the Order deals with the situation when a decree is already passed by the Court. It confers powers on the Court to set aside decree under special circumstances and if necessary stay or set aside execution.
It further empowers a Court to give leave to the defendant to appear to the summons and to defend the suit if it seems reasonable so to do and on such terms as it thinks fit.
Generally Rule 4 will cover a case in which a defendant for sufficient cause has failed to appear and to file an application for leave to defend within the prescribed period"
10. The same was further reiterated by the August Court in case reported as "Cot (Rad) Ashfaq Ahmed and others versus Sh. Muhammad Wasim" (1999 SCNIR 2832). wherein, it is held that: - "----0. XXXVII, Rr. 2(2) & 3---Failure of defendant to appear or to obtain leave to defend suit or to fulfil conditions on which leave was granted and the Court refuses to grant leave--- Consequences---Duty of Court---Where the defendant had failed to fulfil conditions specified in conditional order granting leave to defend suit. Trial Court was justified in passing the decree against the defendant. if a defendant fails appear is to obtain leave to defend in response to a summon served in Form No.4 provided in Appendix B to the C.P.C. or fails to fulfil the condition on which leave was granted or where the Court refuses to grant leave, the Court is to pass a decree in terms of sub rule (2) of Rule 2, of Order XXXVI, C.P.C., it has been provided if a defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall he deemed to be admitted and the plaintiff shall he entitled to a decree, but no such consequences are provided for in Rule 3 of the above Order in a case where the Court refuses to grant leave or the defendant fails to fulfil the condition on which leave was granted.
Notwithstanding the above omission in Rule 3 the effect of refusal of the Court to grant leave or failure on the part of the defendant to comply with the condition of the leave will be the same i.e. the defendant shall not be entitled to defend the suit on any ground and the Court would pass a decree in favour of the plaintiff. However, this does not necessarily mean that the Court is not required to apply its mind to the facts and the documents before it. Every Court is required to apply its mind before passing order or judgment notwithstanding the factum that no person has appeared before it to oppose such an order or that the person who wanted to oppose was not allowed to oppose because he failed to fulfil the requirements of law.
In the present case defendant failed to fulfil conditions specified in conditional order passed by trial Court regarding leave to defend. Besides the material on record coupled with an evasive expression made by the defendant were taken into consideration while passing final decree.
Additionally, entire record was adequately scrutinized by the High Court while rejecting appeal through impugned judgment. Trial Court therefore, was justified in passing the decree against the defendant."
11. Similarly, in the judgment reported as "Muhammad Muzzammil through Attorney versus Khurram Saeed" (2024 CLC 474), it is held as under:- "----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Suit for recovery of money on the basis of negotiable instrument---Leave to defend the suit---Conditional order---Non- compliance---Tempering of cheques--Proof--Appellant/defendant was granted leave to defend the suit subject to furnishing solvent surety---Appellant/defendant failed to furnish the surety, resultantly the suit was decreed against him---Contention of appellant/defendant was that the cheques were tempered---Validity---There was no documentary evidence to corroborate such position---Appellant/defendant sought cancellation of underlying agreement which was the basis of his suit for cancellation but such plea did not lie in summary suit---High Court declined to interfere in judgment and decree passed by Trial Court as the same was well-reasoned and proof of dishonored cheques was annexed with plaint---Trial Court rightly observed that presumption regarding cheques in question under S. 118 of Negotiable Instruments Act, 1881, was to be admitted---Appeal was dismissed, in circumstances."
12. For what has been discussed hereinabove, this appeal being bereft of any merit is hereby dismissed.