' The defendant No, 1 was allowed overdraft in its current account from time to time and on 30-6- 1971 there was a debit balance of Rs, 43,601.79. The defendant No, I had also applied for a loan of Rs, 50,000 in April, 1971 which was granted by the plaintiffs without any interest. The defendant No, 1 utilised the. Loan. It executed a promissory note on 14-4-1971 for Rs, 50,00u with interest @ 4% above the State Bank of Pakistan rate with a minimum of 10 % with quarterly rests. The defendant No, 1 also executed a promissory note on 14-7-1973 for Rs, 99,855.79 with interest @ 5% above the bank rate with a minimum of 10% with quarterly rests. The defendant No, 2 who was the President of defendant No, 1 had personally guaranteed the repayment of the loan. The plaintiffs filed suit on the basis of a promissory note, dated 30-6-1975 for Rs, 99,855.79 executed on behalf of the defendant No, 1, but they came to know that Sarfraz Ahmed the Secretary of the defendant No, I who had executed the promissory note had died before 30-6-1975, therefore, the plaintiff applied for amendment of the plaint which was allowed. It was pleaded that in February/March, 1974 an inchoate blank promissory note was signed and delivered by the defendant No, 1 in which date and amount was filled in by the plaintiffs as 30-6.1975 and Rs, 99,855.79, respectively. The letter of guarantee was also signed in a similar manner by the defendant No, 2 guaranteeing the payment of liabilities of the defendant No,
1. First a rubber stamp of defendant No, 1 was fixed under the signature of the defendant No, 2, but it was erased as it was fixed under mistake. The plaintiff have waived the interest and claimed the principal of Rs, 49,906.99 in the current account and Rs, 50,000 in the loan account. Although notice, dated 13-10-1977 was served on the defendant No, 1 neither reply was sent, nor the amount was paid.
' The defendants have filed a joint written statement in which it is pleaded that the suit is barred by time. It was further pleaded that the defendant No, 2 was not a guarantor in his personal capacity.
It is stated that the defendant No, 1 is a religious Organisation, and it was assured that in course of time the liability would be converted into donation and would thus be liquidated and, therefore, the plaintiff not entitled to recover the loan. It has been pleaded that in the promissory note and letter of guarantee, the date viz. 30th June, 1975 and the amount of Rs, 99,855.79 were unauthorisedly and illegally filled in which is a forgery and these documents have been rendered invalid. On plaintiff's own admission they were executed in February/March, 1974 and the suit is therefore, barred by time. It was further pleaded that the erasers and interpolations in the letter of guarantee have altered the character without the consent and authority of the defendant No, 2 and the same is not binding. The entire claim has thus been denied by the defendants.
' The following consent issues were framed :-
(1) Whether the suit is barred by time ?
(2) Whether the defendant No, 2 is a guarantor
(3) Whether the plaintiffs agreed with the defendant that in due course they would convert the amount of loan into a donation ?
(4) Relief ?
' The plaintiffs have examined one witness, but the defendants have not examined any witness.
From the order sheet, dated -2-1982 it seems that the learned counsel for the defendants stated that they do not wish to lead any evidence as the plaintiff's counsel had admitted annexure `E-1 and G-1 to the written statement. Both the learned counsel agreed that on toe basis of evidence recorded on the preliminary issue all the issues should be decided.
' Issue No, 1 : ' The plaintiff's claim is based on the account opened by the defendant No, 1 and the overdraft and loan facility availed by it. For the repayment of the advance and the loan, the defendant No, 1 had executed promissory note, dated 14-4-1971 (Exh. 5,4), pronote dated 14-7-1973 (Exh. 5/5) for Rs, 99,855.79 and the promissory note dated 30-6-1975 (Exh. 5/8) for the same amount. The plaintiffs served notice, dated 13-10-1977 on the defendant No, 1 and tiled suit on 29-3-1978. The defendants filed an application under Order XXXVII, rule 3, C. P. C. Stating that the Secretary of the defendant No, 1 had died on 16-3-1974 therefore, the promissory note could riot have been signed by him on 30-6-1975. The plaintiff filed an application under Order VI, rule 17, C. P. C. Stating that the promissory note was signed somewhere in February/March, 1974 in blank. The date and the amount were tilled in by the plaintiffs subsequently. This amendment was allowed. In these facts it is to be considered whether suit against the defendant No, I is barred by time. The plaintiffs have not filed statement of account. They are only relying on the promissory note signed on behalf of the defendant No, 1, dated 30-6-1976 (Exh. 5/8). This promissory note has been executed by one Sarfraz Ahmed, Secretary and Syed Abid Ali Jafri the Treasurer of the defendant No,
1. On examination of this promissory note some striking facts have come to light. Another blank promissory note is pasted with this promissory note. The contents of this promissory note are on the back side while its reverse side faces Exh. 5/6. All the stamps except seven stamps have been affixed on it and pasted with Exh. 5/8. It seems that two blank promissory notes signed by these two persons were delivered to the plaintiffs who have utilised only one promissory note. There is no denial of the fact that the executants were authorised to execute it on behalf of the defendant No,
1. The objections raised by Mr. Hassan Akbar the learned counsel for the defendants is that by putting a date on promissory note as 30.6-1975 and the amount of Rs, 99,855.79 the plaintiffs have materially altered the document as one of the executant namely Sarfraz Ahmed had died on 16-3.1974 and this document could not have been executed by him.
' Mr. Inamul Haq, the learned counsel for the plaintiffs has contended that it was an inchoate document and the plaintiffs bad authority to fill in the date and the amount and as the defendants did not inform about the death of Wen Ahmed, it is a valid document. The controversy now rests on the question whether the plaintiffs were entitled and authorised to put a date after the execution. If so, till what time this authority could be exercised. In this regard reference can be made to section 20 of the Negotiable Instruments Act which deals with the inchoate negotiable document and authorises the person to whom such a promissory note has been delivered, to complete it.
' Mr. Inamul Haq the learned counsel has referred to M. P. R. M. Irulandi v. S. Ibrahim and others (1). In this case two promissory notes were executed by the borrowers duly stamped. However, they did not bear the name of the payee and space was left in blank for filling up the name and it was the plaintiff's case that he was authorised to fill in his name at any time when he chose. Due to mistake he did not fill in the name and filed a suit on the basis of the. Blank promissory note against the legal heirs of the borrower who had since died: Realising the mistake he applied for return of the promissory note for filling his name. Tnis application was rejected. In Revision application filed by the plaintiff it was observed that "section 20 of the Negotiable Instruments Act empowers the person whom the promissory note is delivered with prima fade authority to complete the document. The petitioner had authority to fill his name and he wanted to exercise that power and his authority being a statutory one and also one coupled with interest, the death of the person, giving the authority cannot effect the right". However, the question whether the petitioner had authority statutory -or otherwise to fill up the blank was left open to be agitated at the time of hearing and the respondent was allowed to raise this contention.
The crux of the matter lies in the interpretation of section 20 of the Negotiable Instruments Act. It may be mentioned that section 20 was substituted by Ordinance 49 of 1962. Section 20, subsection
(I) authorises the person whom blank promissory note is delivered to fill it but such B authority shall be exercised within a reasonable time. It is not entirely left at the discretion, wish or desire of the persons so receiving the document to complete it at his convenience. In Griffith v. Deltor (2), it wa held that "prima facie authority to fill in the bill to the person in possession of the cheque, must, at common law, be exercised within a reasonable time". The question what is a reasonable time is a question of fact and depends on the facts and circumstances of each case. While considering this aspect of the case in National Bank of Pakistan v. Azizullah Hassan (3) I had observed as follows :- "From the above meanings it is clear that 'reasonable time' provided in a contract or instrument must be interpreted according to the facts and circumstances of each case. In the determining what time is reasonable it should not be extreme and arbitrary. It should be determined according to the facts, circumstances obligations and duties of the parties. In commercial cases particularly relating to the banks and negotiable instruments the reasonable time has to be determined by looking into the nature of the instrument, usage of the trade or business, facts of the partiuclar case and the intention of the parties. In Monkland v. Jack Barclay (1951) 2 K B 252, it was held that all the circumstances should be taken into account in deciding what is a reasonable time."
' It was further observed as follows :- "Having determined the meaning and import of the words "reasonable time" it is now to be considered in what context and for what pupose it has been used in section 20 of the Negotiable Instruments
(1) AIR 1962 Mad. 326 (2) (1940) 2 K B 264 (3) 1984 MLD 1535 Act, When a person signs and delivers to another a blank stamped paper the intention is to make or complete it in future into a negotiable instrument. The person who receives such a document has a prima facie authority to complete it into a negotiable instrument. The restriction imposed by law is that the amount if not stated in the instrument, would be an amount not exceeding the amount covered by the stamp. The other condition is that it must be filled up within a reasonable time and strictly in accordance with the authority given by the executant. Delivery of a blank stamped instrument duly signed, unless otherwise proved, prima facie confers an authority on the receiver to fill it according to the intention of the parties. The object of giving the blank instrument is to give security of continuing nature to the receiver or a creditor. In fact by delivering such document the executant lends his mercantile credit to others. The liability of person who signs and delivers the blank instrument arises only when the blanks are filled in and the instrument is completed. Till then the instrument is not a valid Negotiable Instrument and no action is maintainable on it. Reference can be made to Montaghe v. Perkins (1853) 22 L J C P 187. Where the date has not been mentioned in the instrument the receiver has the authority to fill in the date which should fall within a reasonable period. The object of delivering such document to a party is to furnish a continuing guarantee to the receiver, therefore, the intention of the executor is that it may be utilized by the receiver. In this background in my view, the reasonable time within which the receiver should complete the document by filling in the blank including the date should be a period of three years from the date of its execution. However., if before the expiry of the period three years the executant independently acknowledges the liability according to law and period of limitation is thereby extended, then the receiver/holder can complete the inchoate document into a negotiable instrument within three years from the date of such acknowledgment."
Applying this principle to tbe present case the plaintiffs ought to have filled in the promissory note within three years from date of delivery which admittedly was made in February/March, 1974 as stated in the plaint itself. However, there is an intervening factor i,e, the death of Sarfr Ahmed, the General Secretary who is one of the joint executants of the promissory note on behalf of the defendant No,
1. But for the death of this executant the completion of the promissory note was neither a material alteration nor beyond the authority vested in the plaintiffs under section 20 of the Negotiable Instruments Act. Section 20(i) does not impose any restriction when the document should be completed, but it ha to be made within a reasonable time. While determining reasonable c time it is to be seen whether the length of time can fairly, properly and reasonable be allowed having regard to the nature, the subject-matter, and the attending circumstances. In the present case the plaintiffs ha no acknowledge of the death of Sarfraz Ahmed and the document was filled in within a reasonable time of about 15 months. It is also not established that promissory note on behalf of the defendant No, 1 should have been executed by two persons jointly and not by Sarfraz Ahmed the Secretary or Syed Abid Ali Jafri singly or severally. Possibly such a plea could not be taken as the promissory note dated 30-6-1971 was executed on behalf of the defendant No, 1 by Abid All Jafri. Therefore, even if for argument sake the date so far Sarfraz Ahmed is concerned is defective and irregular, as the pronote has been executed by Abid Ali Jafry the treasurer, also, the defendant No, 1 is bound by it. The right to complete an inchoate document is a statutory right without any restriction that after the death of the executant it cannot be completed. On interpretation of section 20 the restriction imposed by the Court is. That it should be completed within a reasonable time. It cannot be ruled out that in certain circumstances completing an inchoate instrument after the death of the executant may not be within a reasonable time. Con sidering the, facts and circumstances of the case in my view the completion of the blank promissory note on 30-64975 was within reasonable time and binding on the defendant No, 1.
' Mr. Hassan Akbar, the learned counsel for the defendants contended that the authority given to fill in the dates and complete the pronote was only to the extent to put the date on which the pronote was executed and considering from that point of view the suit based on the pronote is barred by time. The learned counsel has referred to Foster v. Driscoll and others (1) where it was held that the foreign bill was invalidated as a date was put which was not in accordance with the contract. This judgment will not be applicable to the present case because here there is no evidence to show that there was an agreement between the parties to fill in a particular date in the promissory note.
Under section 20 of the Negotiable Instruments Act the person to whom such document has been delivered can fill any date of his choice or a date agreed upon by the parties within a reasonable time. It would be contrary to the provisions of section 20 to imply that the person receiving the inchoate instrument is authorised to put the actual date of the execution and not the date of his choice or agreed date within a reasonable time.
' The learned counsel then contended that as a wrong date has been put by the plaintiffs it is a material alteration, and therefore, no suit can lie on the promissory note. The learned counsel referred to Suffel v. Bank of England (2). In this case notes had been purchased bona fide by the plaintiff for value, but before he took them the notes bad been altered by erasing the numbers upon them and substituting other numbers. This was held to be a material alteration and the notes were held to be vitiated and the plaintiff could not recover in the action based on such notes. This judgment is not applicable to the present case as there is no material alteration in the promissory note. The date has been filled in under the authority vested in the plaintiffs by virtue of the provisions of section 20 of the Negotiable Instruments Act.
The next ground for holding the suit barred by time is that the deed of guarantee was given to the plaintiffs in blank and they have filled in the date which is not the date of actual execution and further that one of the guarantors namely Sarfraz Ahmed had died before the date which was put on the document. This question of law is to be decided on the assumption that the guarantee is valid and legal document. The question of validity of the guarantee shall be decided under issue No,
2. It the guarantee is held to be invalid the question of liability of defendant No, does not arise.
For the purpose of deciding the period of limitation one has to proceed on the assumption that there is a valid guarantee by th defendant No,
2. The learned counsel has contended that by putting date which is not agreed upon between the parties or is not the actual
(I) (1929) 1 K B 470 (2) (1882) 9 Q B 555 date, the defendant No, 2 is not bound by it and further that the limitation is to be computed from the date of guarantee which is admittedly March/April, 1974 and, therefore, the suit is barred by time. Assumin that the guarantee is valid and dated March/April, 1974 the suit cannot be barred by time as in terms of guarantee the cause against the defendant No 2 will arise two days after the notice of demand is served. As no notice was served on the defendant No, 2 filing of suit shall be deemed to be notice to the defendant No,
2. Reference can be made to 1982 L C 1001 and 1981 CLC
89. Where similar deed of guarantee was considered and it was held that the period of limitation is to be counte two days after the notice. My finding is that the suit is within time. Issue No, 2 : ' The deed of guarantee has been executed jointly by the defendant No, 2, Sarfraz Ahmed and Syed Abid Ali Jafri. It seems that they had signed in their official capacity by putting stamp of the defendant No, 1 and their designation as President, Secretary and Treasurer. From the letter of guarantee it seems that all the three had jointly and severail guaranteed the due repayment of loan and money due from the defendant No, 1 not exceeding Rs, y9,855.79 exclusive of interest and charges. Th plaintiffs had filed photo copy of the deed of guarantee and during arguments have produced its original which has been accepted on record without any objection from the other side. Mr. Hassan Akbar th learned counsel for the defendants contended that surety was given in official capacity and not in personal capacity and the rubber stamps of the defendant No, 1 and the designation of defendant No, 2 and the other guaranters were scored off by the plaintiffs unauthorisedly and without the consent of the guarantors. If the guarantee was to be given in personal capacity then it means that the President, Secretary and Treasurer o the defendant No, 1 had executed on its behalf. Therefore, it would mean that the defendant No, 1 is its own guarantor through its office bearers. The guarantee is always by a third person and not by the borrower himself. In these circumstances the cutting of the rubber stamp represented the correct and true intention of the parties and did no invalidate the letter of guarantee. The defendant No, 2 has not entered the witness-box to testify that he had not executed the letter of guarantee in his personal capacity.
' The next contention or challenging the validity of the guarantee is that a wrong date has been mentioned which was not the date of execution. Admittedly the defendant No, 2 delivered the letter of guarantee in blank. The defendant has not led any evidence to show which space was left blank and what was the understanding between the parties. It seems that the amount due from the defendant No, 1 and the date were filled in by the plaintiffs. From the contents of the letter of guarantee it seems that the defendant No, 2 had undertaken to guarantee the repayment of the loan advanced to the defendant No,
1. Therefore, filling in the blank in the letter of guarantee so far the amount of loan is concerned, cannot be challenged. Although the amount was written in the letter of guarantee afterwards, from its contents the intention of the parties can be ascertained, as it refers to payment of all money which shall at any time be due from the defendant No, 1.
Therefore, the principal sum could easily be ascertained by referring to the statement of account of defendant No,
1. The defendants have not challenged the principal amount claimed by the plaintiffs. Even if the space would have been left blank there would have been no uncertainty of such a nature which would invalidate this document.
' Now coming to the date it is correct that this document is not governed by section 20 of the Negotiable Instruments Act under which plaintiffs are authorised to complete the blank for the simple reason that the letter of guarantee is not a negotiable instrument. Therefore, the plaintiffs were entitled to fill in the blank by putting a date which was in accordance with the agreement between the parties. The fact that If blank document had been given to the plaintiffs unless otherwise proved, it should be presumed that the defendant bad given an implied authorit to them to fill in the blank in accordance with the agreement and understanding between the parties. The defendants have not led any evidence to snow that they had not authorised the plaintiff to fill in the blanks I the manner they have done.
' The date filled in the blank document becomes more material when the question of period of limitation arises. In the present case this question does not arise, as observed earlier, because the cause of action would arise only after serving a notice or after filing a suit which is taken to be a notice of demand.
' The next contention is that a date has been put in respect of the execution by the three guarantors but before that date Sarfraz had died, therefore, the document is invalid. Sarfraz has not been joined as party. The defendants had not informed the plaintiffs about the death of Sarfraz and further that this date will not effect any vested right in the defendants. If by virtue of the date inserted by the plaintiffs, the defendant No, 2 would have been robbed of his right to plead bar o limitation then in my view unless the plaintiffs were authorised to make such an insertion it will not bind the defendant No,
2. The learned counsel for the defendants also contended that the document in its original form as delivered to the plaintiffs was uncertain and was, therefore, void.
Under section 29 of the Contract Act, "agreements the meaning of which is not certain or capable of being made certain, are void". This provision contemplates that both the contracting parties are consensus ad idem with regard to the essential terms of the contract, and therefore, if there is any uncertainty or vagueness, which is incapable of being ascertaine the contract is vitiated. A perusal of the letter of guarantee will show that even in the original form executed by the defendant No, 2 there was no vagueness or uncertainty which could vitiate the contract.
' Mr. Hassan Akbar, the learned counsel then contended that if the letter of guarantee is held to be valid, claim under it cannot be enforced against the defendant No, 2 as he had guaranteed due repayment, which according to the learned counsel means payment according to law and as the amount claimed against the defendant No, 1 is barred by time, the defendant No, 2 cannot be held liable for the claim. In this regard the learned counsel has referred to PLD 1968 SC 230 and PLD 1971 SC 766. Both these cases interprete the provisions of west Pakistan Urban Rent Restriction Ordinance where a tenant was required to deposit the rent due and it was held that the rent due did not include the time-barred rent. This principle will not be applicable in the present case as there the words 'rent due' as used in a statute were being interpreted. In the present case under the letter of guarantee the defendant No, 2 has undertaken "due repayment" of all moneys "which shall at any time be due to the plaintiff in any shape or form".. Therefore, the defendant No, 2 had agreed the repayment of any amount which was due and payable to the plaintiff at any time. Considering the phraseology used in the letter of guarantee the undertaking is for due repayment of all moneys due at any time. In any event even if the interpretation of the learned counsel is accepted then it means that the defendant No, 2 had undertaken to pay money which is due but has become time- barred. The question arises whether an agreement of this nature is valid. Section 25 of the Contract Act is a complete answer to this querry. It provides that an agreement made without consideration is void 'unless it is a promise made in writing and signed the persons to be charged therewith or promise to pay wholly or any part of debt of which the creditor might have enforced payment, but for limits of suits". Therefore, an agreement to pay the time-barred debt is not void. In Kastur Chand Jivaji v. Maneck Chand Dewa Chand (1) it was held that section 25(3) does not require that in writing itself the consideration should be described as a past debt when in fact it was such past debt and was known to the debtor as such. In K. K. Rm. Muthayee Achi and another v. A. K. Rol.
Sabbiah Chetiar and another (2) it was held that promise to pay under sectica 25(3) will be enforced if the real consideration is shown to be a barred debt, though no reference is made in the document to such debt, and no knowledge of the debtor that the debt is barred proved before the promise is made. A time-barred debt can form a valid. Consideration because debt. Is not extinguished although the remedy is lost. Reference can be made to AIR 1929 All. 65, AIR 1925 All.
313 and AIR 1958 Raj.
1. In view of this discussion, the defendant No, 2 is liable to pay under the guarantee. Issue No, 3: ' No evidence has been led on this issue. My finding is, therefore, in the negative. Issue No, 4: The suit is decreed for Rs, 99,855.79 against the defendants joint and severally with cost.
(1) AIR 1943 Born. 447 (2) AIR 1951 Mad. 983