' The plaintiffs have brought this suit for recovery of Rs, 19,88,082.80 against the defendants.
(i) The brief facts of the case as pleaded are that the defendants 1 and 2 are dealers in textile products and that at the material time they were carrying on business in partnership under the name and style. Qamaruddin & Company which partnership in the course of time was converted by the above-named defendants into a private corporation known as Messrs Qamaruddin & Company Ltd., who are the defendants No, 4 in this suit.
' Between 19th November, 1975 and 10th July, 1976 the defendants purchased at Karachi from the plaintiffs quantities of textile goods on credit. The defendants had earlier deposited with the plaintiff an aggregate amount of Rs, 5 lac by way of security, for purchases This aggregate outstanding against such sales on 30th June, 1976 was Rs, 38,54,325.03. By 10th July, 1976 the defendants made additional purchases of such goods for further amount of Rs, 16,33,827.60.
(ii) The credit sale was secured by a demand promissory note for open value duly stamped, signed and handed over to the plaintiffs by the defendants at Karachi on 19th June, 1975 as an inchoate instrument. The plaintiffs further pleaded that they availed of the security by incorporating the debt due and owing at the relevant time in relation to the commercial transactions which transpired between the parties. It is further pleaded by them that the defendants tendered additional security covering the sales made by the plaintiffs by creating an equitable mortgage also concluded at Karachi by the above-named defendants by depositing title-deeds, which was followed by a memorandum confirming the earlier deposit of the title-deeds as security for repayment of the amount due on the transactions referred to above. The particulars of the mortgaged properties of defendant No, 2 are as follows :- "(1) Bungalow No, 246 on Plot No, 1, Survey No, 16/17, Karachi Mohallah, Lahore Cantt. Measuring 19,152 Sq. Ft.
(2)Bungalow No, 1429/A in Karachi Mohallah at Lahore Cantt. Measuring 14,550 Sq. Ft.
(3)House No, 201 in Azam Mohallah (Shuttar Mohallah) Saddar Bazar, Lahore Cantt. Measuring 1,090 Sq. Ft."
The defendant No, 1 mortgaged his properties being Shop No, 153 and House/Shop No, 154 both on Shagir Road, Saddar Bazar, Lahore (Cantt.).
(iii) The plaintiffs also pleaded that they have maintained an account of the transactions which took place between the parties and produced statement of account alongwith the plaint on which a total sum of Rs, 38,54,325.03 has been shown to be due against the defendants as on 6th March, 1976.
' Further transactions took place between the parties and according to the plaintiffs they supplied copies of the accounts to the defendants which show an aggregate sale amounting to Rs, 54,81,152.63. A copy of the statement of account was supplied by the plaintiffs to the defendants alongwith their letter of 23rd August, 1976 towards which the defendants made payment amounting to Rs, 24,76,400 leaving outstanding a balance of Rs, 30,11,752.63. It is the case of the plaintiffs that the defendants by their letter dated 11th September, 1976 expressly accepted their joint liability and banded over several cheques some of which were honoured and others were returned dishonoured. A statement to that effect has been produced as Annexure 'F' to the plaint showing the, details.
(iv) As the defendants failed and neglected to clear the outstandings in spite of premises, the plaintiffs with a view to reduce the defendants' liability accepted the counter offer of the defendants for return of the goods of the value of Rs, 4,23.669.83, upon such redelivery of the goods and after giving the defendants credit for the security of Rs, 5 lacs, the indebtedness of the defendants towards the plaintiffs stood reduced to Rs, 23,38,082.80 though according to the plaintiffs the defendants adopted dialatory tactics by requesting for settlement of accounts and thereby delaying the payment. A further sum of Rs, 50,000 was received from the defendants by Pay Order dated 14th February, 1977 and on such payment the liability, on the date of the filing of the suit stood at Rs, 19,88,082.80. On the aforesaid pleas the plaintiffs claimed the following reliefs :- (a)Rs, 19,88,082.80.
(b)Interest @ 15% from the date of the suit till realisation.
(c) Preliminary mortgage decree under Order XXXIV, rule 1, C. P. C. And on failure of defendants to redeem the mortgage by way of foreclosure.
(d)Final mortgage decree against the defendant, entailing sale with or without vacant possession of the mortgaged properties by and under the supervision of the Court and in the event of shortfall, the balance be realised from the defendants jointly and severally and all persons claiming through and under them. C and D being alternative reliefs.
(e) Costs of the suit and any other relief or reliefs in additiou and/or substitution to the foregoing.
2. The suit was described in the title of the plaint as under Order XXXVII, Civil Procedure Code.
Accordingly on receipt of the summons by the defendants they applied for leave to defend which was granted by order passed on 15th December, 1979. Without going into other details of the proceedings which took place, it would suffice to say that ultimately the defendants were allowed to contest the suit unconditionally and on 31st May, 1980 and the following issues were framed :- (1)Whether the-original of Annexure 'B' is a negotiable instrument ? If so, whether it is valid ?
(2)Whether the suit is authorisedly instituted ?
(3)Whether the writing dated 11th September, 1976, of which photostat copy is Annexure (i), amounts to admission and acknowledgment of liability on behalf of defendant 4 ?
(4)Whether the framing of the plaint is proper ?
(5)Whether proper court-fee has been paid ?
(6)Whether relief under Order XXXVII, C. P. C. And/or under Order XXXIV, C. P. C. Could be granted ?
(7)Whether the promissory note is inadmissible in evidence ?
(8)What should the decree be ?
3. The plaintiffs examined one Abdul Razzaq P. W. 1 (Exh. 4) and P. W. 2 Yousuf A. Deshi (Exh. 5) in support of their claim and produced a number of documents. The defendants' counsel was present on 24th November. 1980 when the examination-in-chief of Abdul Razzaq was partially recorded. Thereafter, on 21st May, 1981 when the examination-in-chief of the said witness was concluded the defendants and their counsel were absent and thus the above witness was not cross-examined. The other witness in the case examined, was Yousuf A. Deshi P. W. 2 (Exh. 5). His statement was recorded on 29th, November, 1981 when also the defendants and their counsel were absent. Thus, this witness was also not cross-examined. I have gone through the record of the case with the assistance of Mr. N. A. Farooqui, Advocate for the plaintiffs, and find that they have fully proved their claim against the defendants and accordingly the suit is liable to be decreed for Rs, 19,88,083.80 as claimed in the suit for reasons and findings hereinafter recorded.
5. Re : Issue No, 2.-1 would take this issue first as the defendants have challenged' the institution of the suit on the ground that it has not been filed authorisedly. P. W. I Abdul Razzaq (Exh. 4) has produced the resolution dated 18th December, 1976 (Exh. 4/1) which shows that the directors of the plaintiff-Company in exercise of the powers vested in them by Articles 145 and 151, authorised Mr. Ali Muhammad Dawood the Managing Director, to institute the legal action against the defendants for recovery of the outstanding amount and for the purpose to file a suit in Court of Law and appoint Advocates to conduct the case. The plaint has been signed and A verified by the above- named Mr. Ali Muhammad Dawood, the Managing Director of the Plaintiff Company. Thus, it stands proved that the suit has been properly filed and that the plaint has been properly. Instituted.
The issue is answered in the affirmative.
6. Re : Issue No, 1.-The document referred to in this issue Vie. Is Annexure '13' to the plaint and is now Exh. 4/2. It is a promissory note dated 19th June, 1975, signed on behalf of the defendant 3 as well as by defendant No, 2 for sell. This promissory note (Exh. 4/2) is duly stamped. Under the said promissory note the defendant No, 2 and the defendant No, 3 (a firm) have jointly and severally promised to pay to a demand to the plaintiffs or to their order a sum of Rs, 30,62,000 for value received with interest thereon from the date of the said instrument 6% p. a. Over the bank rate minimum 15% p. a. With quarterly rests. The execution of the promissory note has been duly proved by P. W. 1 Abdul Razzaq. On 29th April, 1980 the learned counsel for the parties filed a joint statement in which the defendants admitted the execution of the said promissory note and the signature of defendant No, 2 on the above-mentioned promissory note which was described as Annexure `B' to the plaint and is now marked as Exh. 4/2. The learned counsel for the plaintiffs invited my attention to section 4 of the Negotiable Instruments Act which defines a promissory note as an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking signed by the maker to pay on demand or at a fixed or determineable future time a certain sum of money only to or to the order of certain person or to the bearer of the instrument. B In the light of the above provision of law, no doubt is left that the document Exh. 4/2 is a promissory note within the meaning of the law.
(ii) As to the validity of the promissory note (Exh. 4/2) I do not find anything which renders it invalid.
The defendants have not shown anything which could lead to an inference otherwise. It is accordingly held that (document) Exh. 4/2 is a promissory note and is a valid document.
7. Re. Issue No, 3.-(i) The writing which has been referred to under this issue and which is dated 11th September, 1976 has been produced and proved, as Exh. 4/8. As regards the circumstances under which the above document came into existence, the plaintiffs' witness A. Razzaq in his statement stated that by letter dated 20th August, 1976 (Exh. 4/7) a demand was made upon the defendants and monthly statements showing the bills outstanding against defendant No, 3 as on 30th June, 1976, was enclosed with it. The plaintiffs requested the defendants to check the said statement of account with their hooks and let the plaintiffs know of discrepancies, if any. In the aforesaid letter (Exh. 4/7) the plaintiffs put the defendants on notice that if nothing was heard from the later within 15 days from the date of the said letter it would be presumed that the statement was in accordance with the defendants records. In response to the aforesaid letter (Exh. 4/7) the defendants sent their reply dated 11th September, 1976 (Exh. 4/8), whereby the said defendants expressly confirmed the correctness of the outstandings amounting to Rs, 38,54,325.03. It may be noted here that the learned Advocate for the defendants objected to the production of the said document (Exh. 4/8) on the ground that it was a photo copy and that its execution was not admitted by the defendants. The objection is left open to be considered at the time of the arguments.
' The defendants and their counsel have remained absent and have not chosen to step in the witness-box or deny the statement of the plaintiffs' witness that the defendants confirmed correctness of the outstandings and that document Exh. 4/8 is the photo copy of the original. It would be also pertinent to note here that in the issue as framed the execution of the document dated 11th September, 1976 (Exh. 4/8) has not been disputed. The only plea raised in the issue was whether this document amounted to admission and acknowledgment of liability on behalf of the defendant No, 4.
(ii) I, therefore, see no valid reason to doubt the genuineness of the document Exh. 4/8, produced by the plaintiffs. It is the case of the plaintiffs that the defendant No, 3 (a firm) and its partners defendants Nos. 1 and 2 subsequently converted this firm into a private limited Company who is now the defendant No, 4 in this suit, and took over its assets and liabilities. The defendant No, 4 is bound by the acknowledgment and demand made by Exh. 4/8. This submission of the learned counsel gets support from the petition No, 16/81 filed before the learned High Court at Lahore by the defendant No, 4 wherein according to the counsel, the said defendant have admitted their liability for payment of Rs, 16,58,549.97 as the outstanding, due and payable to the plaintiffs and including this liability towards the plaintiffs, alongwith others, it has been pleaded that the liabilities of the defendant No, 4 Company have gone upto Rs, 53,73,381.27. The defendant No, 4 Company as petitioner in the Lahore submitted, that because of these liabilities they could not run their business smoothly and have become commercially insolvent.
' In the face of the above evidence and the defendant's own case disclosed in the petition at Lahore, my answer to the issue No, 3 is that vide document dated 11th September, 1976 Exh. 4/8, liability is admitted and the defendant No, 4 are bound by the same.
' The issue is accordingly answered.
8. Re : Issue No, 4.-The defendants have raised objection as to the framing of the plaint but I do not find anything wrong with the plaint. The defendants have remained absent. The issue is, therefore, answered in the affirmative.
9. Re:Issue No, 5.-The defendants have not shown as to how proper court-fee has not been paid.
The plaint is affixed with court-fee stamps of Rs, 46,900. Present position in law is that the maximum court-fee payable is Rs, 15,000.
This issue, therefore, needs no further discussion.
10. Re : Issue No, 6.-Under this issue the defendant's objection appears to be that relief under Order XXXVII, C. P. C. And under Order XXXIV, C. P. C. Could not be joined in the same suit. I do not find any force in the objection so raised by the defendants. Under Order II, rule 3, C. P. C. a plaintiff is entitled to join in the same suit several causes of action against the same defendant of the same defendants jointly and plaintiffs having causes of action in which they are jointly interested against the same defendant or defendants jointly may unite such causes of action in the same suit.
Provisions of rule 8 of Order VII, C. P. C. Which also permit a plaintiff to seek relief in respect of several distinct-claims or causes of action founded upon separate and distinct grounds in the same suit. The provisions of law referred to above are sufficient answer to the objection sought to be raised in the issue under consideration.
' Mr. Nasim Farooqui the learned counsel for the plaintiffs has relied upon the case of Habib Bank Ltd. v. Raza Sons & Co. Karachi and others and the case of Habib Bank Ltd. v. Zaki Muhammad Siddiqui and 2 others, which also fully support the submission of the learned counsel.
' I am in respectful agreement with the observations made in the above cases and accordingly hold that the plaintiffs are entitled to join the claim under Order XXXVII, C. P. C. With the relief claimed under Order XXXIV, C.P.C. In the same suit against the same defendants.
' The issue is accordingly answered in the affirmative.
11. Re : Issue No, 7.-Under this issue the defendants have raised the plea that the promissory note Exh. 4/2 is inadmissible in evidence apparently on the ground that the said document is not properly stamped. I, however, find that the said promissory note is duly stamped with stamps of the value of Rs,
10. There is nothing to show that the document is inadmissible in evidence particularly in view of the admission on the part of the defendants that the said promissory note bears the signatures of the defendants No, 2 who signed the same on his own behalf and on behalf of the defendant No, 3.
' The issue is accordingly answered in the negative.
12. Re : Issue No, 8.-The plaintiffs witness P. W. Abdul Razzaq and P. W. 2 Muhammad Younus Deshi have produced statements of account which show the transactions which took place between the parties. Reference may be made to the document (Exh. 5) which has been produced by plaintiffs witness Muhammad Younus Deshi which shows the balance outstanding against the defendants.
The witness brought the original books .Of accounts which were seen and returned and photo copies were allowed to be filed, as Exhs. 5/1, 5/2, 5/3 and 5/4 for the period from 1975-76 to 1977-78.
It has been proved that these books of accounts are maintained in due course of business and under the supervision of the above-named witness. He stated that the dealings which had taken place between the parties are duly entered in the plaintiffs book of accounts, which are kept under his supervision and that he has personal knowledge of all these dealings. This witness explained that the security deposit was kept separate vide Exh. 5/4, and that the plaintiffs gave adjustment to the said security amount and thus the defendants liability was reduced to Rs, 16,54,965.50. The said witness also frankly admitted that after the filing of the suit, the defendant No, 3 paid various amounts totalling Rs, 3,03,115.00 by cheques, pay orders and demand drafts. Plaintiffs claim outstanding against the defendants is further corroborated by the income-tax assessment order for the years 1977-78 and income-tax assessment orders for the years 1978-79 and 1979. 80 in which proceedings the account books exhibited in this Court were also produced and the income- tax authorities accepted the said books of accounts. These documents are marked as Exhs. 5/5 and 5/6. The plaintiffs witness Muhammad Yousuf Deshi also explained that the discrepancy in the amount which the defendant No, 4 had shown in the winding-up proceedings at Lahore wherein the sum of Rs, 16,58,549.97 is shown as claimed by the plaintiffs whereas in the present suit the amount claimed by the plaintiffs is Rs, 16,84.965.50. He deposed that the difference between the two amounts i. e. Amount claimed in the present, suit and that mentioned by the defendant in the petition (Exh. 5/7) amounts only to Rs, 26,565.30 and that the difference was because the defendants have not taken into account the plaintiffs' certain invoices.
13. The evidence of the plaintiffs two witnesses who are fully acquainted with the transactions in the case, supported by the documentary evidence, fully establish the claim made by the plaintiffs against the defendants. It may be noted in the suit a sum of Rs, 19,88,083.80 has been shown t be1 2 the amount outstanding but the plaintiffs on account of payments made subsequent to the filing of the suit claim that the defendants are now liable to pay only Rs, 16,84,965.50.
13. As already noted above the defendants have chosen to remain absent and have neither cross- examined the plaintiffs witnesses nor have they led any evidence in rebuttal.
' The Honourable Supreme Court of Pakistan in the case of Khairun Nisa and 6 others v. Malik Muhammad Ishaque and others, cited with approval the following observation of the learned High Court of Peshawar in the case of Haji Abdullah Khan and others v. Nisar Muhammad Khan and others, as follows :- "It is well-settled law that it is the bounden duty of a party personally knowing the detailed circumstances of the case to give evidence on his behalf and to submit to cross-examination. His non-appearance as a witness would be the strongest possible circumstance going to discredit the truth of his case."
' In view of the above authoritative principle laid down by the Honour- F able Supreme Court of Pakistan and the facts proved of the plaintiffs 1 am satisfied that they have established that the defendants are liable to pay to them an amount of Rs, 16,84,965.50.
14. For the reasons stated above the plaintiffs suit is decreed against the defendants jointly and severally for Rs, 16,84,965.50 with costs and interest at the rate of 10% per annum from the date of suit till payment.
' The defendant No, 2 also being liable on the mortgage, evidenced by Exbs. 4/3 and 4/4 read created by him in respect of (1) Bungalow No, 246 Plot No, 1, Survey No, 16/17, (2) Bungalow No, 1429/A, at Karachi Mohallah Lahore Cantt. (3) House No, 201 in Azam Mohallah (Shuttar Mohallah)
Saddar Bazar Lahore Cantt. And the defendant No, 1 being liable on mortgage (Exh. 4/6) in respect of shop No, 153 and House/Shop No, 154 both on Shagir Road, Saddar Bazar Lahore (Cantt.) preliminary decree shall be drawn against them (defendants Nos. 1 and 2) in Form 5-A of Appendix 'D' to the Civil Procedure Code. PLD 1978 Kar. 425 P L r 1979 Kar. 129 PLD 1972 SC 25 PLD 1959 Pesh. 81