1. ' The present suit has been filed by United Bank Limited for recovery of Rs,1,22,253 under summary chapter on the basis of promissory note.
2. ' Briefly the facts are that in 1969, the partners of the firm Hasan Ali & Company had opened an account with Commerce Bank Ltd., Saleh Muhammad Street Branch, Karachi. The said Bank was nationalised and merged with the plaintiff Bank with effect from 30-12-1974. The above account was operated by the firm till July, 1971. At the request of the partners of the said firm, the above account was transferred in the name of Hasan Ali & Company Ltd., registered under the Companies Act, 1913, the partners of the firm having represented themselves as directors of the said company.
3. ' The plaintiff at the request of the defendant allowed facility of loan/cash credit/over-draft which they availed and utilised. According to the plaint, the defendant made with-drawals and deposits in the said account and lastly paid Rs,5,004 on 27-6-1972 towards adjustment of liability outstanding in the account. On 30-12-1974, the defendant delivered the demand promissory note, duly signed by the Directors for and on behalf of the defendant as a security for repayment of Rs,85,000, outstanding against the defendant. The defendant had agreed to pay interest at 12% per annum with quarterly rests. The defendant also delivered the letter of continuity dated 30-12-1974 to the plaintiff. As the defendant failed to pay the amount outstanding against it in the account, it was served with a legal notice dated 13-1-1977, calling upon it to pay the dues. However, there being no response from the defendant, the suit was filed.
4. ' The defendant in the written statement took up the plea that fixed deposit certificates to the tune of Rs,7,31,000 were deposited by the defendant with the plaintiff in January, 1971 as security, on which interest was payable by the Bank at the agreed rate and the defendant was required to pay interest on the over-draft at 2% per annum higher than the interest accruing on the fixed deposit certificates. It is further alleged that in May, 1972, the defendant had paid in all a sum of Rs,9,24,460.50 towards satisfaction of the total amount outstanding against it including the interest at the agreed rate. It was denied that the promissory note and the letter of continuity were delivered to the plaintiff on 30-12-1974. It was stated that the promissory note was obtained by the plaintiffs predecessor in 1971, when the balance in the account of the firm M/s. Hasan Ali & Company was transferred in the name of Hasan Ali & Company Ltd. According to them Mr. Hasan Ali Hashwani one of the signatories of the above promissory note left for London on 22-10-1974 and died there on 2-12-1974. It is further stated that Mr. Hasan Ali Hashwani and Mrs. Sultana A.
5. Hashwani the signatories of the aforesaid promissory note had resigned from the Directorship with effect from 16-1-1974 and were not Directors on 30-12-1974. The demand promissory note and the letter of continuity were signed blank and the plaintiff had itself put in the figure of Rs,85,000 and the figure of 12% per annum and have put the date of 30-12-1974 therein. It also denied the above amount to be due and payable on 30-12-1974. It is further stated that the blank letter of continuity was also delivered to the Bank in July, 1971. They denied the receipt of the notice and termed entries in the account as fictitious and it was alleged that no debit note was ever sent to the plaintiff. It is lastly contended that the suit is based on account and not on negotiable instrument and as such the summary suit is not maintainable.
6. ' On the above pleadings of the parties, the following issues were framed:-- "(1) (a) Whether the defendants had deposited fixed deposit certificates as alleged?
(b) If so, whether interest on overdraft amount was to run at 2% over the rate of interest on deposits?
(2) Whether the defendants had in May, 1972 paid Rs,9,24,460.50 and the loan stood satisfied?
(3) Whether the promote and letter of continuity were executed on 30th December, 1974 or in 1971?
7. If so its effect?
(4) Whether the statement of account filed by plaintiff is correct?
(5) Is the suit barred by time?
(6) To what amount, if any, is the plaintiff entitled?"
8. ' The plaintiff has examined Muhammad Akbar, its officer at Exh.2. He deposed in consonance with the averments in the plaint and produced Gazette Notification dated 8-4-1974, relating to merger of the Commerce Bank Ltd., as Exh.2/1, defendant's letter dated 23-7-1971 as Exh.2/2 and Resolution of the Boaid of Directors of the defendant company, as Exh.2/3, promissory note and letter of continuity both dated 30-12-1974, as Exhs.2/4 and 2/5 respectively, the plaintiff's notice dated 18-1- 1977 and statement of account and plaintiff's letter dated 16-8-1974, as Exhs.2/6, 2/7 and 2/8 respectively. The defendant examined Ramzan Ali, the Accountant of the company.
9. ' I have heard the learned counsel Mr. Syed Mamnoon Hassan for the plaintiff and Mr. Syed Zafar Hadi Shah for the defendant.
10. ' The learned Advocates for the parties jointly stated that issue No,1 is not pressed.
11. ' Referring to the evidence of the defendant's witness to the effect that as per books of accounts maintained by the defendant, the defendant's liability towards bank as on 29-6-1972 was in the sum of Rs,63,077.47, submitted that the suit may be decided on the basis of the above admission and that he does not press the suit for the entire amount prayed for and the suit may be decreed to the extent of admitted amount of Rs,63,077.47 with simple interest at the rate of 12% per annum with effect from 29-6-1972.
12. ' In view of the admission of the defendant in the evidence and the statement of the learned counsel for the plaintiff, as stated above, no finding is required on issues Nos.2 and 4. It may, however, be pointed out in respect of issue No,2 that the statement of account (Exh.2/7) shows that the defendant in the month of May, 1972 had deposited a sum of Rs,9,24,466.50 towards repayment of loan. Thus, there is no dispute with regard to the amount deposited by the defendant in the account and the statement of account cannot be said to be incorrect.
13. ' Issues Nos.3 and 5: ' The learned Advocate for the defendant contended that the blank promissory note and the letter of continuity were delivered to the plaintiff in July, 1971 and, therefore, the suit filed on 27-12-1977 is barred by time after expiry of three years. However, there is no evidence on record that the aforesaid documents were delivered in July, 1971. According to the plaint, the aforesaid promissory note and the letter of continuity were delivered in the year 1974. It was controverted by pointing out that one of the signatories, namely, Hasan Ali Hashwani had expired on 2-12-1974 and, therefore, it cannot be believed that it was executed or delivered to the plaintiff on 30-12-1974.
14. ' In fact looking at the averments made in the written statement it is a case of delivery of inchoate stamped instrument by the defendant to the plaintiff. The amount disclosed in the promissory note and the date appear to have been inserted by the plaintiff. Defendant's witness Ramzan Ali, the Accountant of the defendant company, on being confronted with the promissory note, stated that it bore the signatures of Ms. Sultana A. Hashwani, Sadruddin H. Hashwani, Mrs. Zaverbai Hashwani and Mrs. Hasan Ali Hashwani. The allegation in the written statement that two of the directors had resigned with effect from 16-1-1974, is also not proved. Since the signatures of the executants including late Hasan Ali Hashwani having been admitted, the question as to when the above document was signed by the deceased is immaterial. Even if it be assumed that the said document was signed in July, 1971 and was delivered to the plaintiff at that time, it would not make any difference under the facts and circumstances of this case. The learned counsel for the plaintiff relying on section 20 of the Negotiable Instruments Act (XXVI of 1881) and the interpretation of the said section in the case of United Bank Ltd. v. President, Bazme Salat and another (PLD 1986 Karachi 464), contended that section 20(1) authorises the person to whom blank promissory note is delivered to fill it according to his own choice. The judgment in the above reported case was affirmed in High Court Appeal. The appellate judgment is reported in PLD 1989 Karachi 150.
15. ' In reply to the above, learned counsel for the defendant contended that the inchoate instrument, is required to be filled in within reasonable time. Subsection (3) of the aforesaid section 20 provides that 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.
16. Proviso to the said section reads as under:-- "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 impose as if it had been filled up within a reasonable time and strictly in accordance with the authority given." (Emphasis supplied).
17. On reading of the aforesaid proviso ex facie, presumption arises that the document had been filled up within reasonable time and strictly in accordance with the authority given and it shall be effectual for all purposes.
18. ' In view of the presumption provided for in the proviso in favour of the recipient of the instrument, it is for the executant of the instrument to show that it was not filled in or completed within a reasonable time.
19. ' In the written statement the defendant has not taken any plea whatsoever with regard to the completion of the instrument into promissory note having been made beyond reasonable time.
20. In the above reported case, it has been held that three years' time is to be considered reasonable.
21. The question, what is a reasonable time, is a question of fact and depends on the facts and circumstances of each case. The defendant having taken the plea of delivery of inchoate instrument, had to place on record all the particulars, that would lead the Court to hold that the document was not filled, in and completed within reasonable time or that the suit was barred by time. In absence of any such plea or evidence and looking at the date of the instrument, it cannot be said that the suit is barred by time. It is settled law that the inchoate document can be completed by the drawer according to his own choice. As held in Carter v. White (1882) 20 Ch. D.
22. 225, affirmed in (1883) 25 Ch. D. 666, the instrument may be made perfect after the death of the acceptor, as well as before.
23. In respect of issue No,3, it is, therefore, held that the defendant has failed to prove that the promissory note was delivered to the plaintiff in 1971 and issue No,5 is replied in negative.
24. ' The suit is, therefore, decreed in the sum of Rs,63,077.47 with simple interest at the rate of 12% per annum with effect from 29-6-1972 till realisation of the decretal amount.