' Defendants Nos. 4 and 5 through their Advocate have filed this application under Order 37, Rule 4, C.P.C. With a prayer to set aside the preliminary decree passed on 9-5-1988 against the defendants and may grant leave to appear and defend the suit. Contentions of Mr. Abdul Qadir learned counsel for the defendants are as under:--
2. That on 12-5-1990 the defendants came to know from private sources that the decree has been passed against them. The defendants immediately engaged the Advocate, who filed the power on 13-5-1990 in this Honourable Court.
3. That the defendants never received any summons or notice through bailiff or otherwise at Hyderabad, which is the permanent place of their business.
4. That any notice, if received by any person of the company, was done without the consent or authority of the defendants. Moreover the defendants were never informed about the suit or the notices so received by any person of the company.
5. That the defendants could not read the newspapers in which the notice was published by this Honourable Court, nor they learnt about the said notice through any other sources before 12-5- 1990.
6. That the defendants were made Directors of the company without their consent or authority whatsoever.
7. That the defendants were never called to attend the meetings of the company, nor they ever participated in any meeting held by the company.
8. That the defendants never signed the letter of guarantee as alleged. The said document do not bear the signature of the defendants. The defendants deny the execution of these documents. The documents have been manufactured by the Bank.
9. There are also affidavits sworn in by M/s. Noor Nabi son of Ghulam Nabi Memon and Abdul Nabi son of Ghulam Nabi Memon, in which they have stated that the accompanying application under Order 37, Rule 4, C.P.C. Has been drafted under their instructions and the contents thereof are true to the best of their knowledge and belief and the same may be treated as part of this application.
10. Contention of Mr. Noorullah Mangi, learned counsel for the plaintiff, are as under:--
(a) That the suit was filed in the year 1986.
' The defendants have been served by summons and publication under Rule 8 on 27-8-1986, (b) that there is service by bailiff, (c) that Khurshid Anwar, one of the defendants, has signed for defendant No,1 as a Chief Executive, (d) that publication in the 'Morning News' was done on 18-7- 1986, (e) that process was repeated on 22-12-1988 for appearance on 25th January 1989. Bailiffs report is dated 23-1-1989, (f) that again the process was repeated on 28-2-1989, (g) that there is bailiff's report dated 17-4-1989, (h) that 'gain the process was issued on 30-3-1989 for hearing on 17-4-1989, (i) that again the process was issued on 4-5-1989 for hearing on 24-5-1989, (j) that preliminary decree was granted on 28-3-1988, (k) that second publication was made on 10-4-1989,
(1) that legally the defendants have been served by all the three triodes namely by publication, by registered post and by bailiff, (m) that defendant No,1 was regularly represented whereas the other defendants deliberately and intentionally kept out but came at a later stage, (n) that the application under Order 37, Rule 4, C.P.C. Is mala fide as the same has been filed to delay the execution proceedings, (o) that due and proper service has been effected on the defendants, (p) that while the suit was pending Mr.Mashallah Khan, who is the Principal Officer and Attorney of the Bank met the defendants Nos.4 and 5 on various occasions and they repeatedly inquired from him about the position of the case, and (q) that in the light of the above facts the defendants have been properly served and that they have not given plausible explanation of each day's delay, therefore, the application under Order 37, Rule 4, C.P.C., filed by defendants Nos.4 and 5 is beyond the statutory time and is not maintainable in law and is liable to be dismissed and the decree passed by this Court on 28-3-1988 is to be maintained.
11. In support of his contention MrAbdul Qadir, learned counsel for the defendants, has referred the following case-law:--
(i) A.I.R. 1931 Allahabad 727 case of Ram Baharose v. Ganga "(a) Civil P.C. (1908), 0.5, R.20 (2)---Whether substituted service can amount to due service within Art. 164---Court must consider whether method employed was calculated to effect purpose of informing defendant of institution of suit."
12. In my humble view this authority is not applicable inasmuch as the defendants never received any summons or notice through bailiff at Hyderabad, which is the permanent place of their business. But perusal of the suit shows that addresses of the defendants, given in the suit is as under:-
(i) Mr.Noor Nabi Memon son of Ghulam Nabi Memon, having office at 506, Muhammadi House, I.I.
Chundrigar Road, Karachi.
' Mr.Abdul Nabi son of Ghulam Nabi Memon, having his office at 506, Muhammadi House, I.I.
Chundrigar Road, Karachi.
' Where as the address of all of the defendants is the same as mentioned above. In the authority cited above it is further held as under:-- "It is therefore open to the defendant, when he appears to show that the 'method employed was not calculated to effect the purpose of informing the defendant of the institution of the suit, and in order to see whether there was due service or not the Court must consider all the circumstances of the case, for example, the place where the defendant was when the summons was issued to him and how the summons was served."
' The address of the defendant, which is shown in the suit itself is very clear and easy also.
13. The contention of the learned counsel for the defendants that the permanent place of business of the defendants is at Hyderabad, is not tenable. Therefore this authority is not applicable to the present case.
(ii) PLD 1979 SC 18 relevant page 19 . Case of Mst. Afzal Begum and others v. Y.M.CA.: "O.V, R.20, O.IX, R.13 & O.XLI, R.21 read with Limitation Act (IX of 1908), Arts.164 & 169---Ex parte decree, setting aside of Limitation---Substituted service under 0.V, R.20---Does not amount to "due seritice"---Due service effected of summons in suit or of notice in appeal---Period of limitation for application to set aside ex parte decree or for rehearing of appeal heard ex parte---To be computed from date of decree---Summons in suit or notice in appeal not "duly served"--- Limitation commences from date of knowledge of decree.-- (Limitation-Ex parte decree).'
' This authority of the Honourable Supreme Court, in my humble view is not applicable to this case because the Honourable Supreme Court has held as under:- "Summons in suit or notice in appeal not "duly served"--Limitation commences from the date of knowledge of decree."
' Whereas in the suit in hand the service is effected through all the three modes. The contention of the learned counsel for defendants, that on 12-5-1990 they came to know from private source that decree has been passed against them, is totally untenable and is not believable at all.
(iii) 1984 SCMR 568, case of Abdul Karim Jaffarani v. United Bank Ltd and 2 others "0. )(XXVII, R. 3---Suit upon negotiable instrument---Leave to defend---Grant of---Discretion vesting in Court to subject order for grant of leave to defend to conditions---To be exercised on facts and circumstances of each case---Scope and object underlying such provisions providing for special procedure---Imposition of conditions simply because at leave granting stage defendant unable to adduce his evidence on pleas raised in his defence---Held, would be improper exercise of discretion."
' This authority, in my opinion , is also not applicable so far the case of defendants Nos.4 and 5 is concerned. The Honourable Supreme Court has held as under:-- "In view of the legislative history of these provisions, the overall object envisaged by the Legislature was to provide for expeditious disposal of litigation involving commercial transactions of a particular nature by a summary procedure /so that the defendant does not have the means open to exploitation in the ordinary procedure for trial of suits to prolong the litigation and prevent the plaintiff from obtaining an early decision by raising untenable and frivolous defences."
' This authority on the contrary is helpful to the case of the plaintiff.
(iv) PLD 1987 Karachi 86, Case of Habib Bank Ltd. v. Mussarat Ali Khan: ' In this authority also the learned Judge has held as under:-- "Similar is the case under Order IX, rule 7 that if an ex parte hearing of suit is adjourned and if the defendant appears at the adjourned hearing and assigns good cause for his non-appearance on the previous date, it is open to the Court to permit him to be heard in answer to the suit as if he had appeared on the date fixed for his appearance. If an ex parte decree is passed against the defendant in an ordinary suit his' remedy is provided under Order IX, rule 13 for setting aside the same and if he satisfies the Court that the summons was not duly served, or that he was prevented by any 'sufficient cause' from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit, whereas in a summary suit decreed ex parte against the defendant, the remedy is provided in Order XXXVII, Rule 4, which provides that the Court may, under `special circumstances', set aside the decree and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do."
14. It has rightly been held by the learned Judge that whereas in a summary suit decreed ex parte against the defendant, the remedy is provided in Order XXXVII, rule 4, which provides that the Court may, under 'special circumstances', set aside the decree and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do.
15. In the case in hand there is neither any reasonable cause nor any special circumstance to set aside the preliminary decree and allow the defendants to appear and defend the suit because the suit is already delayed and the defendants have not come with clean hands and have not able to show the source of their information, so late to defend the suit. On the contrary, in my view, this authority is also very much helpful to the plaintiff.
(v) PLD 1987 SC 512 case of Hudaybia Textile Mills v. Allied Bank of Pakistan Ltd.
' In all my humbleness at my command I can say that this authority of the Honourable Supreme Court is not applicable to the present case of the defendants in view of the following observations of the Honourable Supreme Court:-- "In other words the only distinction between the procedure applicable to a suit instituted in the ordinary manner and a suit under Order XXXVII is that the defendants cannot appear and defend the suit as a matter of right but only after he obtained leave to defend on showing that there is a triable issue.'
16. In this case the defendants have not been able to show any plausible and convincing reason or explanation for not defending the suit at its proper stage and have not been able to show that there is any triable issue at present.
(vi) 1991 MLD 1803 Case of Messrs United Bank Ltd. v. Mrs.Rehmat and another:-- "S. 3---Civil Procedure Code (V of 1908), O.XXXVII, R. 3---Limitation Act (IX of 1908), Si & Art. 181--- Suit for recovery of Bank loan---Application to appear and defend suit---Condonation of delay--- Plaintiff could not controvert factum of defendant being a foreign national and having obtained knowledge of institution of suit against her when she reached Pakistan on a certain date---Plaintiff although taking objection that defendant's application to appear and defend suit accompanied by application for condonation of delay was belated, yet he could not show that same barred by time---No period having been prescribed for filing application under S.5, Limitation Act, 1908 provisions of residuary Art.181, Limitation Act, 1908 would be applicable providing period of three years from the date when right to apply accrued to an applicant---Defendant's application for condonation of delay having been filed after seven months, was within time---Grounds set out in defendant's application under S.5, Limitation Act, 1908, in support of her application to appear an defend suit inspired confidence and was supported by documentary evidence---Application for condonation of delay was granted in circumstances."
17. This authority of the learned Judge, in my view, is not applicable so far the facts and circumstances of the present case are concerned, because in the authority referred to above the defendant being a foreign national and having obtained knowledge of institution of suit against her when she reached Pakistan on a certain date. Whereas in the case in hand all the defendants have Pakistani nationality and their addresses, as mentioned earlier, are of Karachi and further more according to the learned counsel for the plaintiff service through all the 3 modes was effected on the defendants.
' Mr. Noorullah Mangi, learned counsel for the plaintiff has referred following case-laws:--
(i) 1991 CLC 1146---Case of Messrs Pak-Libya Holding Co (Pvt) Ltd. v. Sauheen S. Piracha:-- "Suit for recovery of loan---Leave to appeal and defend suit---Service on defendant was duly effected by one more modes of service provided for in Rule 8 which was good service---Defendant who filed application for leave to appear and defend suit after considerable delay, was required to give explanation for each day's delay, which he had failed to do---Application which was filed after a long delay was dismissed in absence of any plausible explanation for such delay and suit filed by plaintiff was decreed accordingly."
Service on defendants was duly effected by all the 3 modes of service as provided for in Rule 8.
Defendants have filed application for leave to appear and defend the suit after considerable delay and have not given explanation for each day's delay. Therefore this authority is very much applicable so far the facts and circumstances of this case are concerned.
(ii) PLD 1990 SC 497 case of Messrs Ahmed Autos v. Allied Bank of Pakistan Ltd: ' In this authority of the Hon'ble Supreme Court my Lord Mr. Justice Ajmal Mian has observed as under":-- "It is a matter of common knowledge that defaulter borrowers in suits brought against them particularly by the financial institutions used to delay the disposal of the suits by avoiding the service of the summons. In order to expedite the disposal of the suits to be brought by the Banking Companies the Ordinance was promulgated, which contains special provisions and which inter alia provides that a suit brought by a Banking Company for the recovery of loan is to be tried in summary manner under Order XXXVII. Section 15 of the Ordinance empowers the Federal Government by a notification in the official Gazette to make rules for carrying out the purposes of the Ordinance."
' This authority is very mush applicable to the facts and circumstances of the present case.
18. The contention of the learned counsel for the defendants, that service is not effected on the defendants, is not tenable and his contention that the defendants on 15-9-1990 came to know from private sources that the decree has been passed against them, is not tenable and is a frivolous defence. The contention of the learned counsel that permanent place of business of the defendants is at Hyderabad, is also not believable. According to the suit, address of all the defendants is shown as 506, Muhammadi House, I.I. Chundrigar Road, Karachi and the plaintiff adopted all the three modes of service to get the defendants served as provided under the law.
Admittedly all the three modes namely, by publication, by Registered Post and by bailiff, were effected. One Khursheed Anwer, defendant No,2, was served on the same address, who had appeared and also signed for defendant No,1 as Chief Executive. There is also counter-affidavit of Mr. Mashallah Khan, Principle Officer and Attorney of the plaintiff, who in his affidavit has affirmed that the suit was filed in the year 1986 and as per procedure provided under the Banking Companies (Recovery of Loans) Ordinance, 1979, service was effected by all the three modes namely, by publication, Registered Post and by bailiff and all the three modes were duly completed, besides that defendant No,1 was regularly represented but the other defendants intentionally and deliberately kept out so that they could come at a later stage to obstruct the grant of final decree.
19. That defendant No,1 is a public company and consent of the Directors to act as a Director is compulsorily required under section 184 of the Companies Ordinance, 1984 besides defendants Nos.4 and 5 have executed letters of guarantee. Further it is reiterated that defendants No,4 and 5 signed the Letters of Guarantee. Annexure "0-A" was signed by Mr. Noor Nabi Memon, defendant No, 4 and Letters of Guarantee Annexure "0-5" was signed by Mr. Abdul Nabi Memon, defendant No,5.
20. That while the suit was pending the deponent himself met defendants Nos.4 and 5 on various occasions and defendants Nos.4 and 5 had repeatedly enquired from the deponent about the present position of the case. It is a fact that letters of Guarantee were duly signed by defendants Nos.4 and 5.
21. I have gone through the material placed on record and I have also perused the authorities, cited by the learned counsel for the parties, and I have also applied my mind and have come to the conclusion that all the three modes of service are duly effected on the defendants and the defendants have deliberately avoided to defend the suit and there is not any force in the contention of the learned counsel for the defendants that defendants' permanent place of business is at Hyderabad and that they could not read the newspaper in which the notices were published by this Court nor they learnt about the said notice through any other source before 12-5- 1990. Their contention that they had not signed the Letter of Guarantee and that the defendants were directors of the company without their consent or authority, is totally unbelievable and afterthought.
22. The most of the authorities, as discussed above, referred by Mr. Abdul Qadir, are actually not helpful so far his case is concerned and rather are helpful to the case of the plaintiff. The authorities of this Court and Supreme Court referred by Mr. Noorullah Mangi are very much applicable to the facts and circumstances of the present case.
23. My Lord Mr. Justice Ajmal Mian, as pointed earlier in the Supreme Court case, has rightly held that after taking loan from financial institutions the defaulter borrowers, in order to delay the disposal of the suit, are using tactics by avoiding service of the summons.
24. In view of the facts and circumstances, discussed above, C.MA. No, 3734 of 1990 is dismissed. Mr. Noorullah A. Mangi has prayed for award of costs of Rs,2,000 in the interest of justice. This prayer of Mr. Mangi is also allowed and costs of Rs,2,000 is imposed on the defendants. Orders are accordingly,