' The plaintiff filed the suit for recovery of Rs,19,79,673.48 'alleged to be due on account of overdraft granted by it to the defendant No,1 on the security, inter alia of mortgage by defendant No,1 and guarantee by defendant No,2. The defendant No,2, as is clear from the averments in the plaint, has been sued only as a guarantor.
2. The defendant No,1 did not make an application for leave to appear and defend the suit but an application (C.M.A.6958/89) for that purpose was made by the defendant No,2. The ground on which the defendant No,2 had sought leave to appear and defend the suit was, mainly, that the alleged guarantee was forged. In support of the application, the defendant No,2 had produced copies of correspondence which was not denied by the plaintiff. By letter dated December 8, 1985, the plaintiff had demanded payment from the defendant No,2 on the basis of the alleged guarantee. The defendant No,2, by reply dated the 12th December, 1985, denied that they had executed any guarantee and contended that the alleged guarantee was false and fabricated. The plaintiff, by its letter dated January 22, 1986, maintained that the guarantee was genuine and purported to enclose therewith a photocopy of the guarantee. The defendant No,2 sent a reply reiterating its earlier stand and alleging that photocopy of the guarantee was not enclosed with the plaintiff's letter dated January 22, 1986. In subsequent correspondence, the plaintiff and the defendant No,2 reiterated their respective positions.
3. With regard to the claim against the defendant No,2, it is alleged in para. 3 of the plaint that the defendant No,2 executed a guarantee dated the 17th October, 1982, a photocopy of which was annexed to the plaint and marked 'D'. In para 6 of the plaint, it is alleged as follows:- "Defendant No,2 was called upon to adjust the liability as a guarantor under the aforesaid letter of guarantee executed by defendant No,2 in favour of the plaintiff. Defendant No,2 through its Advocate took the stand that the guarantee was fabricated and defendant No,2 was not liable.
Photocopy of the letter of its Advocate dated 17-2-1986 is attached herewith and marked T."
' It may be noticed that in the paragraph reproduced above, the date on which the defendant No,2 was called upon to adjust the liability has not been mentioned. Annexure T to the plaint is the letter dated the 17th February, 1986, from the defendant No,2 to the plaintiff, which is the same as Annexure 'D/8' to the defendant's affidavit in support of its application for leave to appear and defend the suit; but that letter is only a part of the correspondence, beginning from the plaintiffs demand dated the 8th December, 1985 (Annexure D/1 to the defendant's affidavit in support of C.MA. 6598/89). Not only has no reference been made in the plaint to the demand dated the 8th December, 1985, but even in the para relating to the cause of action, it was merely asserted that it arose "on the various dates hereinabove mentioned and finally on 13-4-1989 when the defendants had declined to make payment." As to the correspondence between the parties, the plaintif, in its counter-affidavit in reply to the defendant's application (C.M.A.6598/89) has not only not denied it but has stated that it "speaks for itself'. The alleged guarantee (Annexure 'D' to the plaint) creates a liability in the defendant No,2 to pay the amount mentioned therein "within two days after demand;" and the demand, as shown above, was admittedly made on the 8th December, 1985. The suit was filed on 11th June, 1989, that is, more than three years after theate of the demand. The suit as against the defendant No,2 was, therefore, at least prima facie barred by limitation. It cannot be gainsaid that the cause of action against the defendant No,2 arose two days after the demand dated the 8th December, 1985; and if there were any grounds upon which the plaintiff could claim exemption from the law of limitation, it was incumbent upon it to show such grounds in the plaint as required by Order VII, Rule 6, C.P.C. No such grounds have been shown in the plaint. Further, the plaintiff ought to have stated in the plaint specifically when the cause of action arose against each of the defendants or, at least, to have stated sufficient facts to indicate when it so arose. As regards the defendant No,2, the only relevant facts alleged are that (a) a guarantee dated the 17th October, 1982 was executed (para.3; (b) that the defendant was called upon to adjust the liability (date not mentioned); and (c) that by its Advocate's letter dated the 17th February, 1986, the defendant No,2 repudiated its liability (para 6). Thus, not only in the light of the fact that the demand for payment was admittedly, made by the letter dated the 8th December, 1985, but even on the basis of the allegations in the plaint itself, namely that the defendant No,2 denied its liability to pay by the letter dated the 17th February, 1986, the suit as against the defendant No,2 would appear to be barred by limitation. True, that the defendant No,2 did not take the plea of limitation in its application for leave to appear and defend the suit but it is established law that the Court not only can but must take into account the question of limitation even if it is not pleaded by a party.
4. The defendant's application for leave to appear and defend the suit came up for hearing on the 25th February, 1990, and was dismissed by an order in these terms -- "It is 12-20 p.m. Hence C.M.A.
No, 6958 of 19901s dismissed for non-prosecution." There was no appearance for defendant No,2 on that date. On the same day, judgment was passed, which after narrating the averments in the plaint and the fact of the dismissal of the application of the defendant No,2 for non-prosecution provided as follows:- "I, therefore, decree the plaintiff's suit for a sum of Rs,19,79,673.48 with interest at 4% the above bank rate with minimum 14% per annum with quarterly rests from 31-3-1989 till the payment against both the defendants jointly and severally. I also pass a preliminary decree under Order 34, Rule 4, C.P.C.
In Form 5-A of Appendix 'B' to the Ist Schedule. If the decretal amount has not paid within 6 months, final decree of sale of the mortgaged property would follow. If the net proceeds of sale are insufficient to satisfy the decree, the balance will be recoverable from the defendants personally."
5. In pursuance of the judgment, a preliminary decree was drawn up and signed. The decree, after setting out the prayer clause of the plaint, provides, in relevant part, as follows:- "The suit coming up on this 25th day of February, 1990 for hearing before Mr. Justice Syed Abdur Rehman in the presence of Mr.Iqbal Qazi, Advocate for the plaintiff and the defendants having been called absent and no application for leave to appear and defend the suit filed by the defendant No,1; it is hereby ordered that the application for leave to appear and defend the suit filed by the defendant No,2 is dismissed and the suit is preliminary decreed in Form 5-A Appendix 'D' under Order 34. Rule 4. C.P.C. To the 1st Schedule against the defendants as under"
(Underlining is mine).
' Then follow the usual provisions of a preliminary decree as provided in Form 5-A of Appendix 'D', 1st Schedule, C.P.C. After declaring the amount due under the mortgage, the defendants, jointly and severally, are required to pay the same within six months; and the usual provisions of a preliminary mortgage decree are incorporated. The properties mentioned in the Scheduled are those mentioned in the mortgage deed (Annexure 'E' to the plaint) which was executed by the defendant No,1 (deceased) and 1(a). It is, thus, clear that although the judgment was for money decree (against the defendants jointly and severally) as well as for preliminary decree (which could have been passed only against the heirs of the deceased, defendant No,1, and the defendant No,1(a), the decree is only a preliminary mortgage decree and, further, that it is also against the defendant No,2 although the defendant No,2 is not even alleged to be a mortgagor as is clear from the averments in the plaint and the mortgage deed annexed thereto. It is also clear that no money decree against the defendant No,2 has been prepared yet.
6. On the 5th March, 1990, three applications were moved by the defendant No,2. By C.MA. 1547/90 "compliance of the orders of preparation of preliminary decree against the defendant No,2" is sought to be stayed; the prayer in C.MA. 1548/90 is "to set aside the orders of decree and preparation of preliminary decree thereof against the defendant No,2"; and, by C.MA. 1549/90, restoration of the application under Order 37, Rule 3, C.P.C. By defendant No,2 is sought. Separate affidavits have been filed in support of all the three applications but the reasons for non- appearance on the 25th February, 1990, are set out in the affidavit of the learned counsel for the defendant No,2 in support of C.MA. 1549/90 as follows:- "(2) That on 25-2-1990 I had come to this Honourable Court and first came to the Bench of Mr. Justice Syed Abdul Rehman where other matters were being taken up.
(3) That I had also to appear before the Bench of Mr. Justice Saeeduzaman Siddiqui in another matter and so I went to that Bench.
(4) That to my knowledge none of the said matters were taken up before 11-00 a.m. Whereafter I again went to the Court of Mr. Justice Saeeduzzaman Siddique and when I came before the Bench of Mr.Justice Syed Abdul Rehman again some minutes before 1-00 a.m. I found that the above matter had already been disposed of in which orders had yet to be signed.
(5) That I waited for the return of file from the Court and I found today from the office that the application under Order 37, Rule 3, C.P.C. Filed by me on behalf of the defendant No,2 has been dismissed for non-prosecution at 12-30 a.m with order of decree of the suit and preparation of preliminary decree, copy of which I have also simultaneously applied."
7. In reply to the affidavits filed in support of the three applications, the plaintiff filed a common counter-affidavit in which the stand was taken that:-
(a) C.MA. 1547/90 had become infructuous as preliminary decree had already been prepared on 24-2-19%
(b) C.M.A. 1548/90, under Order 9, Rule 13, C.P.C., was not maintainable and that, in any case, it did not disclose any "special circumstances" requiring application of Order 37, Rule 4, C.P.C. And, further, that preliminary decree having already been prepared, there was no question of setting aside the order and that the application was, therefore, infructuous.
(c) C.MA. 1549/90 for restoration of defendant's application under Order 37, Rule 4, C.P.C. Was not maintainable and that the only remedy of the defendant was to apply under Oder 37, Rule 4, C.P.C."
8. On merits, the applications were opposed on the ground set out in para. 6 of the counter- affidavit, which is as follows:- "This matter was called -twice in the forenoon and kept aside on account of the absence of defendant No,2 and its counsel. Finally as nobody appeared until the late hours of the day i.e, at about 12-30 p.m., the leave application of the defendant No,2 was dismissed for non-prosecution."
9. Mr. Abdul Alim K. Talib, the learned counsel for defendant No,2, contended that the facts mentioned in his affidavit together with the merits of the case as set out in the defendant's affidavit in support of its application for leave to appear and defend the suit constituted special circumstances within the meaning of Order 37, Rule 4, C.P.C. Mr. Iqbal Kazi, the learned counsel for the plaintiff, submitted that no special circumstances had been disclosed and relied on the cases of Allied Bank of Pakistan, Ltd. v. V.C. Khilnani PLD 1984 Kar. 127, National Bank of Pakistan v. Messrs Home Aids Corporation PLD 1989 Lah. 213 and Habib Bank Limited v. Abdul Latif Nasir PLD 1990 Kar.
212. Mr. Abdul Alim K. Talib also referred to the last mentioned case but made no attempt to distinguish it.
10. In the case reported in PLD 1984 Kar. 127, an order was passed by consent in the following terms:- "By consent C.MA. 2025/1982 is granted on furnishing security in the amount claimed in the suit. Mr. Zaidi states that he consented to this order in view of the previous order dated 26-8-1978 passed on the application of the deceased father of the present defendant. Security shall be furnished within 30 days from today failing which in view of the provisions of Order XXXVII, C.P.C. The present suit shall stand decreed against the defendant with costs."
' As the security was not furnished within time, the decree, in terms of the consent order, stood passed on 15-6-1982. The defendant made an application under Order XXXVII, Rule 4, C.P.C. For setting aside the decree on the ground that one of the defendants was permanently settled in U.S.A. And the other defendant had gone to U.S.A. For surgical operation and came back to Pakistan on 15-7-1982. It was held that these grounds did not amount to special circumstances and the application was dismissed. It was, however, also held that the order sought to be set aside was a consent order and could not be set aside without the consent of the other side. The case is, therefore, distinguishable from the facts of the present case. The other two judgments cited by Mr. Iqbal Kazi followed the decision in PLD 1984 Karachi 127.
11. As far as the present case is concerned, the circumstances are rather peculiar. The plaint does not disclose specifically when the cause of action against the defendant No,2 arose but it appears from the affidavits and the counter-affidavits of the parties and the admitted correspondence filed therewith that the demand for payment against the defendant No,2 as a guarantor was made for the first time on 8th December, 1985; and that, in terms of the guarantee, the liability to pay arose two days after the demand. When the plaint was filed, it was duty of the office to check the question of limitation a little more minutely and to call upon the plaintiff to state specifically when the cause of action against each of the defendants arose. If, as appears likely, the suit of the plaintiff as against the defendant No,2 was barred by limitation, then the defendant No,2 had acquired a valuable right and the failure of the office to note the defect in the plaint has caused prejudice to him. It is well-established that no party can be made to suffer for the mistake of the Court. It would thus appear that this failure of the office to note the point of limitation and the fact that the suit of the plaintiff as against the defendant No,2 may be liable to be dismissed as time- barred are special circumstances entitling the defendant No,2 to have the decree set aside. In the case of National Bank of Pakistan v. Tradewell (Pakistan) Corporation and 2 others (NLR 1981 UC 55), the application for leave to appear and defend the suit was filed after the expiry of period of 10 days from the service of the summons. Alongwith that application, an application for condonation of delay was also filed. The learned Judge came to the conclusion that no sufficient ground was made out to condone the delay and dismissed the application under section 5 of the Limitation Act and consequently decreed the suit. Subsequently, the defendant made an application to set aside the decree on the ground, inter alia, that the claim made in the suit was not covered by the provisions of Order 37, C.P.C. And, therefore, the suit under that order was not maintainable but had to be tried by following the ordinary procedure, and, therefore, prejudice had been caused to the defendant as he was not only required to seek permission to defend the suit but was restricted to do so within 10 days of the service of the summons. In that case, it was found that several items such as amount by transfer, salary and allowance of the staff, conveyance charges, cash and stamp amounting to Rs,20,340 had been claimed besides the amount due under the promissory note and interest thereon. It was held that such amount could not be included in a suit based on a promissory note under Order 37, Rule 2, C.P.C. This fact was considered to constitute a special circumstance and the decree was set aside. In the present case, the defendant No,2 has also suffered a prejudice as shown above and the decree against it, is, therefore, liable to be set aside.
' In the circumstances, dismissal of the application (C.M.A. 6958/89) and the decree against the defendant No,2 are hereby set aside. C.M.A. 6958/89 shall be listed for hearing in due course. The applications stand disposed of in these terms.