1. ' This suit under Order 37, C.P.C. has been filed by plaintiff for recovery of Rs,9,61,527.04 from the defendant allegedly being the price of plaintiff's product known as Politrin 'C' supplied to the defendant on credit between 29-7-1987 and 10-9-1987.
2. ' It is claimed that in accordance with the statement of account maintained by the plaintiff at Karachi a sum of Rs,9,61,527.04 remained outstanding towards the price of the said product which outstanding the plaintiff demanded by its various letters. It is further alleged that the defendant in payment of the aforesaid outstanding issued a Cheque No,272539 dated 15-1-1991 but the said cheque when presented was dishonoured.
3. ' The defendant filed the present application for leave to appear and defend the suit inter alia, on the grounds that the suit is barred by limitation, that the cheque on which suit has been filed was improperly filled up by the plaintiff long time after it had been issued and that this Court has no jurisdiction in the matter. The first and the second contentions are interconnected and, therefore, I will take up those together. With regard to these it is submitted by the defendant's counsel that the goods having been supplied in 1987 the present suit instituted in 1991 on its face was time-barred.
4. The counsel states that the cheque on which the suit has been based was handed over to the plaintiff alongwith 3 other cheques bearing Nos.272538, 272540 and 272541 and on those four cheques neither any date was written nor the amount. He submits that these cheques, issued in 1987, were not for consideration but only to cover the supply to be made at that time. The filling up for the cheque now in 1991 and the attempt to encash it was contrary to the understanding between the parties. To substantiate his contention that the aforementioned four cheques, which included the disputed cheque, had been issued in 1987, the defendant has also annexed to the application counterfoils of two Cheques Nos.272537 and 272542 dated 25-7-87 and 19-10-87 and encashed on 25-7-87 and 20-10-87 respectively. The former of these two cheques, as is obvious, immediately precedes the first of the said four cheques while the latter immediately follows the last of those. As such it was submitted that the disputed cheque as also the other three had been issued between 25 7-87 and 20-10-87 and not on 15-1-91 as stated in para. 5 of the plaint.
5. ' Mr. Siddique Mirza admits the receipt of only one cheque, i.e. the one on which this suit is based.
6. He also admits that the cheque in question had been issued blank and without date and the date was subsequently filled by the plaintiff. He, however, states that the cheque not having been filled at the time it was issued could be filled by the plaintiff as provided under section 20 of the Negotiable Instruments Act, which provides that: "20.---(1) Where one person signs and delivers to another a paper stamped in accordance with the law relating to stamp duty chargeable on negotiable instruments, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made, or completed into a negotiable instrument he thereby gives prima facie authority to the person who receives that paper to make or complete it, as the case may be, into negotiable instrument for the amount, if any, specified therein, or, where no amount is specified, for any amount, not exceeding, in either case, the amount covered by the stamp.
(2) The person so signing shall, subject to the provisions of subsection (3), be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course, for the amount specified in the instrument or filled up therein: Provided that no person other than a holder in due course shall receive from the person so signing the paper anything in excess of the amount intended by him to be paid thereunder.
(3) In order that any such instrument may on completion be enforceable against any person who became a party thereto before such completion, it must be filled up within a reasonable time and strictly in accordance with the authority given: ' Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given."
7. ' His contention is that prima facie the plaintiff had the authority to fill in the cheque and having done so the cheque was valid and good for payment against the defendant. He places reliance on the case of United Bank Limited v. President, Bazm-e-Salat and another reported in PLD 1986 Kar.
8. '464 where it was held that an inchoate instrument can be filled in within reasonable time and in that case the Court considered three years to be reasonable. The learned Judge observed that, "While determining reasonable time it is to be seen whether the length of time can fairly, properly and reasonably be allowed having regard to the nature, the subject-matter and the attending circumstances".
9. ' On the question of limitation, on the authority of the case of Kureshi Brothers v. Khairpur Textile Mills Limited reported in PLD 1980 SC 286 his contention is that as, both, the plaintiff and the defendant have made claim on each other the former in respect of the price of goods, and the latter for commission, the present case is that of 'mutual, current and open accounts' falling under Article 85 of the Limitation Act, and therefore, the limitation is to be computed from the close of the year in which the last item admitted or proved is entered in the account. In the above case it was observed by their Lordships that "The evidence on record and particularly Exh.19 establishes that the respondent and the appellant were dealing with each other in two different capacities viz. principal and agent and seller and purchaser with each having demands for the others. While the respondent had demands for the price of goods sold on credit to the appellant, the appellant had demands against the respondent on account of commission on all sales made on its behalf and also incidental expenses incurred in respect of such sales. These dealings for two distinct contractual relationships created reciprocity of accounts between the parties and showed that a mutual, current and open account was maintained."
10. ' Accordingly his contention is that as the last payment entry mentioned in the statement of account is dated 14-3-88 the date of 15-1-91 as mentioned on the disputed cheque was well within three years of the last entry and the present suit filed on 24-7-1992 was in time computed from the date of the cheque.
11. It is true that under section 20 a person signing and delivering a blank instrument to other prima facie gives authority to such other person to complete the document but this inter alia is subject to the condition that there must be an intention to complete the document into a negotiable instrument and further that the document should be filled up within a reasonable time and strictly in accordance with the authority given. Therefore, in the present case, in order to determine whether the cheque in question was given with the intention of completing it into a negotiable instrument and was filled up within a reasonable time and strictly in accordance with the authority given it will be necessary to give .an opportunity to the defendant to plead his case for, as observed earlier, according to the defendant, the cheque was issued without consideration and the plaintiff had no authority to fill up the cheque after a long time of its issuance.
12. ' As regards the next contention, the defendant's counsel submits that neither any cause of action has accrued within the jurisdiction of this Court nor the defendant was residing nor carrying on business here and, therefore, this Court has no jurisdiction in the matter. It is contended by the defendant's counsel that the orders for the supply of goods were always placed at Karore Pukka, District Lodhran, Punjab and goods were supplied from the branch office of the plaintiff situated at Vehari also in the Punjab. This, he states, is apparent from the various delivery challans and the customer's order forms which he has annexed to his application for leave to appear and defend.
13. Further he states that the defendant permanently resides and works for gain at Karore-Pukka.
14. Accordingly, his contention is that in the circumstances of the present case this Court has no jurisdiction to entertain the suit.
15. ' In reply Mr. Siddique Mirza submits that there is no branch office of the plaintiff at Vehari but it is only plaintiff's store that is situated there. However, he admits that the orders were placed at Karore-Pakka and the goods were supplied from the store there. He states that as the registered office of the plaintiff is situated at Karachi the account of the defendant was maintained by the plaintiff at Karachi. He accordingly states that cause of action, has accrued at Karachi. His further submission is that, in any case, by virtue of section 120, C.P.C. sections 16, 17 and 20, C.P.C. were not applicable to the High Court and therefore, even if the cause of action accrued outside Karachi or the defendant was residing or carrying on business outside Karachi still this Court will have jurisdiction to entertain the suit. For this proposition he sought support from the cases of Shaikh Muhammd Amin & Co. v. The Provincial Industrial Development Corporation 1991 CLC 684 and Agricids (Private) Limited v. Ali Agro Supply Corporation Ltd. 1988 CLC 59. In the former it was observed that, "Although the provisions of sections 16, 17 and 20 of the Code of Civil Procedure do not apply to the High Court in exercise of its original civil jurisdiction, the Court will have jurisdiction to entertain a suit if the cause of action has arisen within its local limits of the jurisdictions." In the latter case the learned Judge held, "I am, therefore, of the clear view that this Court in exercise of its original jurisdiction, can entertain all suits value whereof exceeds Rs,1,00,000 (i) when the defendant resides at Karachi notwithstanding the restriction contained under sections 16, 17 and 20, C.P.C., or (ii) when the Civil Courts of Karachi have jurisdiction to entertain it but for the pecuniary limit imposed upon them".
16. ' It would appear from customer order, dated 25-7-87 that the bank draft which was given by the defendant to the plaintiff was on Habib Bank Limited, Karore-Pukka. Similarly, the cheque was dishonoured by defendant's Bank at Karore-Pukka. As regards agreement between the parties, it is admitted that no written agreement was entered into and while the plaintiff claims that the terms were settled orally at Karachi, the defendant alleges that this was done at Karore-Pukka. In so far as the maintenance of statement of account is concerned, that is an internal matter of the plaintiff and may be they are maintaining the account at Karachi but the fact that the goods were ordered for and supplied at Karore-Pukka and payment too was made there mere maintenance of account at Karachi would not mean that cause of action has partly arisen at Karachi. In so far as the question of this Court's jurisdiction in view of section 120, C.P.C. is concerned, suffice it to say that plaintiff's counsel's contention that this Court can entertain suits irrespective of whether the defendant is residing or working for gains within its jurisdiction or cause of action has accrued here, does not find support from the above cases relied upon by him.
17. In any case, the point requires detailed consideration in order to determine as to whether this Court has jurisdiction or not and for that purpose too the defendant should have an opportunity to place his point of view before the Court.
18. 'In the circumstances, in my view, the defendant has made out a case for trial of substantial issues of law and facts and is, therefore, entitled to the grant of leave to appear and defend the suit unconditionally. I, therefore, grant the defendant unconditional leave to appear and defend the suit. Written statement to be filed by the defendant within four weeks.