1. ' The respondent filed a suit for recovery of Rs,100,000 under Order XXXVII, Rules 1 and 2, C.P.C.
2. Against the applicant on the basis of promissory note executed by the applicant on 15-9-1982. It was alleged by the respondent that he runs a business in spare parts, and had dealing with the respondent. In the said dealings Rs,100,000 was due to the respondent in consideration of which the promissory note was executed which in spite of demand has not been paid to him. The applicant filed an application under Order XXXVII, Rule 3, C.P.C. Seeking leave to appear and defend the case.
3. In the affidavit it was stated that the applicant had no dealings with the respondent. It was denied that the promissory note was executed in consideration of the amount due on the alleged business dealings between the parties. The applicant did not deny the execution of the promissory note, but pleaded the facts and circumstances under which the promissory note was executed purported to be a security for payment of Rs,80,000 to one Ikramuddin the brother-in-law of the respondent with whom the applicant had business dealings and had to pay Rs,1,18,000. The applicant has given details of his business dealings with Ikramuddin against whom he had filed a suit and a compromise was reached between the parties, whereby the applicant had to pay Rs,80,000 in respect of Ikramuddin's claim of Rs,1,17,999 and Suit No,1457 of 1982 filed by the applicant against Ikramuddin was withdrawn and that Ikramuddin was to return 14 cheques which were delivered to him by the respondent in his business dealings. It seems that the applicant did not have ready cash of Rs,80,000 for payment to Ikramuddin, therefore, according to the applicant a pro-note of Rs,100,000 was executed in favour of the respondent, in presence of witnesses, as a security for the claim of Haji Ikramuddin. According to the applicant, subsequently Rs,80,000 was paid to Haji Ikramuddin and he returned 14 cheques and receipt at that time, but did not return the pro-note, and later stated that it has been destroyed. In the counter-affidavit filed by the respondent he admits that the applicant had business dealings with Haji Ikramuddin and had to pay Rs,1,18,500, and further that Haji Ikramuddin had agreed to accept Rs,80,000 from the applicant in full settlement of his claim. As the applicant did not have the money to pay, he requested for a loan of Rs,100,000 and executed promissory note in his favour on 15-9-1982 and had also taken another loan of Rs,4,200 on 16-9-1982. It was denied that Rs,80,000 was paid to Haji Ikramuddin and pleaded that promissory note is with consideration. The learned trial Court granted leave to appear and defend on furnishing security in the sum of Rs,100,000. The applicant has challenged this order.
4. ' Mr. Jalaluddin Balouch, the learned counsel for the applicant contended that the promissory note was without consideration, and therefore, leave to defend should have been granted unconditionally. From the facts disclosed by the applicant in his affidavit filed in support of application under Order XXXVII, Rule 3, C.P.C. This contention is not maintainable. The applicant admits that promissory note was executed as he was unable to pay Rs,80,000 to Ikramuddin. This was by virtue of a settlement between the parties, and, therefore, prima facie on his own admission the pro-note cannot be termed as without consideration. ' own admission the pro-note cannot be termed as without consideration.
5. ' The learned counsel then contended that an arguable case has been made out by the applicant, and, therefor, leave should have been granted unconditionally. In this regard the learned counsel has referred to the averment made in the plaint and in counter-affidavit of the respondent which has been referred above. The moot point for consideration would be whether the promissory note was executed as a security for payment of Rs,80,000 or it was executed on receiving loan of Rs,1,00,000 from the respondent. According to the applicant Rs,80,000 has been paid to Ikramuddin, and therefore, the very purpose of promissory note has been satisfied and no demand can be made by the respondent. There is nothing on record to show that even before the expiry of three years and till today Ikramuddin has made any claim against the applicant for payment of Rs,80,000. Therefore, the Court will have to consider whether the pro-note was executed as a security or for re-payment of loan advanced to the applicant. The significant aspect of the case is that in the plaint the plaintiff has alleged that the applicant had business dealing with him and in that regard Rs,1,00,000 was taken as a loan. It, therefore, seems that the respondent to a great extent admits the plea raised by the applicant and made a departure from his original plea. At that stage while granted leave, the Court has to consider whether prima facie bona fide allegation or a triable issue has been raised, and if the answer is in the affirmative, then unconditional leave to appear and defend should be granted.In Nazim v. Messrs Habib Bank Ltd., Karachi and another 1980 CLC 1185 it was observed that if the defendant has a plausible case based on the averment of fact and law contained in his defence, he would be entitled to unconditional leave to defend the suit. Reference can also be made to Fine Textile Mill, Karachi v . Haji Umar PLD 1963 SC 163, Continental Syndicate v. International Gas Co. PLD 1959 Kar. 252 and 1975 SC MR 393. In Fine Textile Mill's case it was observed that where the defendant discloses` on his affidavit plausible defence, or shows that there is some substantial question of fact and law which needs to be tried or investigated into, then leave to defend must be granted. Where the defence is vague and unsatisfactory, or there is doubt to its genuineness, leave should not be refused altogether but defendant should be put on terms either to furnish security or t deposit the amount claimed in Court. Applying this principle laid down in the Fine Textile Mill's case by the Supreme Court, one can see that in the present case a plausible defence and substantial question of fact and law has been raised.
6. ' Mr.Abdul Ghafoor Shaikh the learned counsel for the respondent has contended that the grant of conditional or unconditional leave is within the discretion of the Court, and therefore, unless it is without jurisdiction, the Revisional Court will not interfere with it. In the facts and circumstances, in my view an arguable case has been made out, and the discretion exercised by the learned trial Court is not in consonance with the Rules laid down by the Supreme Court in the aforesaid case. I, therefore, allow the Revision Application and grant leave to appear and defend the case unconditionally.