' IHSAN-UL-HAQ CHAUDHRY, J.--The facts relevant for the decision of this appeal are that the respondent filed a suit under Order XXXVII, C.P.C. For recovery of Rs,13,09,892.50 on the basis of three post-dated cheques issued by appellant No,2. It was pleaded that the appellant No,1, a partnership firm, had been making purchases of paddy from the plaintiff and in the year 1992 paddy worth Rs,19,09,892.50 was supplied by the plaintiff out of which respondent paid a sum of Rs,6,00,000 while for the balance amount three post-dated cheques were issued. The cheques were presented but bounced by the bank with the objection; "funds insufficient". It was thereafter that the plaintiff filed a suit for recovery on 11-7-1993. Notices were issued to the defendants-appellants. The appellants Nos.4 to 7 moved two applications; one to file the written statement; and other for leave to appear and defend the suit. The leave was allowed subject to furnishing of bank guarantee or deposit of the suit amount in Court before 21-7-1994 for which date the suit was adjourned. The counsel for the respondent was present while there was a request on behalf of the learned counsel for the appellants for adjournment but the trial Court decreed the suit on account of failure of the appellants to comply with the condition. Now this appeal, which was admitted to hearing and notice was issued to the respondent, who has appeared through Syed Najam-ul-Hassan Kazmi, Advocate and contested the appeal.
2. Ch. Amir Hussain, learned counsel for the appellants Nos. 1, 4 to 7 argued that although the learned counsel before the trial Court made a written request for adjournment yet the same was not acceded to by the trial Court. It is added that the condition was harsh and it was a fit case for grant of leave without any condition. In this behalf, the learned counsel has referred to Muhammad Nasir v. Muhammad Alam 1992 CLC 1705. The next argument is that Muhammad Sharif did not issue the cheques in dispute on behalf of the appellant No,1 and appellants Nos.4 to 7 and he has no such power as is clear from the deed of partnership. It is explained that in view of the provisions of section 28 of the Negotiable Instruments Act, 1881 (hereinafter to be referred as Act of 1881) the cheque should have been clearly issued under the authority of appellant No,1 otherwise it remained the personal responsibility of appellant No,2. It is added that after the cheques were bounced by the bank the holder thereof i,e, respondent should have given a notice of this fact to all the partners of appellant No,1 and in the absence of notice they cannot be held liable for any such payment. It was then argued that although the suit was based on cheques but the original cheques were never placed on record and as such same was not maintainable. The trial Court before decreeing the suit should have at least got the cheques in original produced on record. It is submitted that this is beside the argument that the original documents, basis of the suit, should be filed alongwith the plaint. In this behalf, reliance is placed on the provisions of Order VII, C.P.C. It is added that it was clearly pleaded in the application for leave to appear and defend that the respondent earlier has got filed a suit for specific performance from his father in respect of the same amount, therefore, the present suit was incompetent. The arguments are summed up with the submission that the condition is to be imposed with reference to the defence disclosed by the defendants but in the present case there was no adjudication at all of the defence of the appellants and in this way trial Court failed to exercise jurisdiction legally. In this behalf, the learned counsel has referred to Messrs Shahzad Ice Factory and 2 others v. Special Judge Banking (II) Lahore and another PLD 1982 Lahore 92.
3. On the other hand, the learned counsel for the respondent argued that the cheques were legal and valid and all the appellants were responsible for the payment. In this behalf, the learned counsel has referred to sections 18, 19 and 25 of the Partnership Act. It is added that the conduct of the appellants is that they appeared in October 1993 and delayed the adjudication by adopting all sorts of delaying tactics. It is maintained that the trial Court has exercised the jurisdiction properly while granting conditional leave to appear and defend. In this behalf, the learned counsel has referred to Messrs Ark Industrial Management Ltd. v. Messrs Habib Bank Limited PLD 1991 SC 976, Messrs Sargroh Services (Pvt.) Ltd. v. Messrs Hoechst Pharmaceuticals Pakistan (Pvt.) Ltd. 1989 SCMR 1834, Khalid Javed & Co v. Javed Oil Industries 1988 SCMR 391, M/s. Industrial Air Control (Pak.) (Pvt.) Limited, Karachi and 2 others v. M/s. Alpha Insurance Company Ltd. And another 1994 CLC 1526, Allied Bank of Pakistan Ltd. v. V.C. Khilnani and 2 others PLD 1984 Karachi 127, Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 and Fine Textile Mills Ltd, Karachi v. Haji Umar PLD 1963 SC 163. It is added that this or trial Court while dealing with the application under rule 3 cannot discuss the merits. In this behalf, the learned counsel has referred to Messrs Sargodha Services (Pvt.) Ltd. (supra) and Sebro Pharma Ltd. v. Commercial Printers and Publishers 1989 MLD 1979. It is further argued that the pleas as to the provisions of negotiable instrument were not raised before the trial Court, therefore, cannot be allowed to be raised in the appeal. In this behalf, the learned counsel has referred to M/s. Industrial Air Control (Pak.) (Pvt.)
Limited, Karachi and 2 others (supra) and Manzoor Ahmad v. Muhammad Iqbal 1994 SCMR 560.
4. The learned counsel for the appellants Nos.2 and 3 argued that the Act of 1881 is applicable to the cases of partnership firms as is clear from the text of section 22 of the Partnership Act. It is added that appellant No,2 did not issue the cheques on behalf of the firm and in any case the partners have not delegated any such power as is clear from the partnership deed. It is submitted that the presumption under section 118(g) of the Act of 1881 is rebuttable. It is added that the trial Court failed to appreciate that the appellants Nos.4 to 7 were either females or minors, therefore, they were entitled to protection of Court, The arguments are summed up with the submission that the cheques were got issued from the appellant No,2 at pistol point and at the same time he was made to sign agreement to sell, in respect of his share in the property for the same amount.
Therefore, this suit was glaring example of abuse of the process of Court. The trial Court miserably failed to attend to the points raised on behalf of the defendants in the application for leave to defend.
5. We have given our anxious consideration to the arguments of the learned counsel for the parties and gone through the record. In view of the order proposed we would not touch the merits lest it may prejudice the case of either of the parties before the trial Court.
6. The perusal of the file shows that the trial Court has dealt with the suit involving huge amount in a very casual and careless manner. Although the notices were issued to the defendant No,1 yet it is not clear from the interim orders as to whether at any stage it was served and proceeded against ex parte or not? It is clear from the order dated 8-3-1994 that Muhammad Hussain, Attorney of the defendants Nos.4 to 7, was present while the defendants Nos.1 to 3 were not served and on the next date Mr. Muhammad Sharif Cheema, Advocate had been marked present on behalf of the defendants but the learned counsel for the respondent admitted that the said Advocate did not represent all the defendants and in fact he was the counsel for the defendants Nos.2 and 3. This is supported by the order passed on next date i,e, 5.4.1994. Thereafter, the trial Court forgot all about defendant No,1.
7. It is clear from the applications of appellants Nos. 2 and 4 to 7 that they sought leave to appear and defend the suit, mainly on the following grounds:--
(i) that the cheques were secured at pistol point;
(ii) that the defendants Nos. 4 to 7 were not responsible for the payment of the said amount; and
(iii) that the same amount has been treated as consideration in the suit for specific performance filed by father of the plaintiff.
' Before proceeding any further it is relevant to refer to the operative portion of the impugned judgment which reads as under:- "3. Keeping in view the past conduct of the defendants it appears that they have left no stone unturned to delay the proceedings of this case.
' I feel it proper to grant them permission to defend the case provided they submit a bank guarantee amounting to Rs,13,09,892.50 in this Court before 21-7-1994 or they may deposit this amount in this Court before the said date."
8. Ch. Amir Hussain, learned counsel for the appellants Nos.1, 4 to 7 argued that the order is harsh and it was a fit case for grant of permission for leave to appear and defend without any condition.
The tenor of the order shows that the condition was imposed keeping in view not the defence sought to be raised but the alleged conduct of the appellants. This is against the provision of rule 3, Order XXXVII, C.P.C. The condition is to be imposed keeping in view the plausibility of the defence sought to be set up. It is made clear that the conduct, of-course, is relevant but not the sole determining factor. The learned counsel for the appellants rightly referred to the judgments in the cases of Messrs Shahzad Ice Factory and 2 others (supra). We may also refer to the judgments in the case of Al-Qaim Traders v. Habib Bank Ltd. 1989 CLC 1633 and Muhammad Anwar v. Hoechst Pharmaceuticals Pakistan (Pvt.) Ltd. And others 1989 MLD 171 which was upheld by the Hon'ble Supreme Court in the judgment reported as Messrs Sargroh Services (Pvt.) Ltd. (supra) relied by the learned counsel for the respondent. The Hon'ble Supreme Court in the case of Messrs Ark Industrial Management Ltd. (supra) has clearly held that it would be improper to lay down a rule. Of thumb for the exercise of this discretion. In the case of Muhammad Anwar (supra) the precise question was whether the trial Court has exercised power legally and judiciously or arbitrarily and capriciously. It was held as under:-- "11. It is clear from the precedent cases that the matter of condition is a discretion and it will depend from case to case. The defendant is entitled to leave to appear and defend if he has good defence or raised substantial question or discloses facts which may be deemed to be sufficient to entitle him to leave to appear and defend. Conversely speaking if there is no defence in the real sense then leave is to be refused outrightly. But in the cases falling between the two ends or extremes, the leave is to be granted subject to the conditions as warranted by the circumstances of each case.
This way there can be following three situations:-- ' Firstly, where the petitioner raises substantial question of law and fact and the claim is supported by plaint or other documents. The leave is to be granted in such situation normally without condition; ' Secondly, where the defence is not clear and there is doubt as to the fides of the petitioner. In the wording of Supreme Court as employed in case of Fine Textile Mills when defence is vague, unsatisfactory or there is a doubt as to its genuineness. There will be variety of situations covering this clause as it will cover the whole gap between two ends and connect first and last category. In such cases leave has to be granted subject to conditions depending on the facts of such case; and ' Thirdly, when the defence sought to be set up is fake, without any material to support, and just bald allegation without any substance both on legal and factual planes. In that case the leave is to be refused?
' In C.R. No,974 of 1991 reported as NLR 1992 CLJ 64, it was held as under:-- " ..In all the cases cited at the hearing, it was held that in the event of a 'plausible case' made out in the application filed for permission to appear to an unconditional leave of defence. In this view of the consistent case-law, discretion vested in the trial Court, in terms of sub-rule (2) of rule 3 of Order XXXVII does not seem to have been exercised along sound judicial lines. Therefore, interference in revision is necessary to prevent clear failure of justice. Hence civil revision is bound to succeed."
9. Now turning to the case in hand. It is clear that the trial Court has not exercised its discretion in accordance with law and precedents of Superior Courts. This is not all. The trial Court in all allowed 6 days to the appellants to furnish Bank guarantee or deposit the amount in Court. This was entirely insufficient time. Therefore, order is bad in law. The time for this purpose should be reasonably fixed keeping in view the amount involved. The defendants should have been allowed one month's time to comply with the condition.
10. The learned counsel for the respondent also pointed out that the affidavit appended with the application moved by appellants Nos. 2 and 4 to 7 cannot be termed as 'affidavit' because it was not in the prescribed form and there was no verification at all. Suffice it here to record that neither the respondent objected to the same nor the trial Court performed its duty in this behalf. It was the duty of the trial Court to return the so-called affidavit and direct the appellants to file affidavit in the prescribed form but unfortunately the submission of the affidavit is only considered a formality and it is not given its due importance.
11. The upshot of the above discussion is that we allow this appeal, set aside the impugned judgment and decree and grant leave to the appellants to defend the suit unconditionally. The transferee Court is directed to decide the suit expeditiously and in any case by the 30th of September, 1995 even if it has to hold day to day proceedings. There is no order as to costs.