1. JIDGMENT This appeal has arisen against an order of the District Judge, Karachi, granting leave to defend a suit under Order XXXVII, C. P. C. On condition to furnish security to the extent of the amount in suit within one month of the date of the order.
2. The respondents United Bank Ltd. Had allowed facility of overdraft to the extent of Rs. 75,000 to the appellants. However, on 19th February, 1972 and 12th October 1973, appellants executed two promissory notes in favour of the respondents. In November 1974, respondents brought suit for recovery of Rs. 37,563.52 on the basis of promissory notes executed in their favour. It was also prayed that the goods pledged with the respondents should be sold for satisfaction of the decree, if and when passed.
3. Appellants took objection, while accepting the signatures on the promissory notes, that the suit under Order XXXVII, C. P. C. Had been wrongly brought as it was a suit for recovery of balance due in accounts which were fully secured by pledge of goods. The learned District Judge, however, did not accept these pleas and allowed leave to defend the suit on condition as stated earlier.
4. The main argument of the learned counsel for appellants is that the suit in dispute does not fall under the provisions of Order XXXVII, C. P. C. Because, the plaint itself indicates, that the amount advanced to the appellants by respondent bank was duly secured by pledge of goods and that the accounting of the amount due is yet to be made. The main emphasis of the learned counsel is on the pledge of the goods and he has contended that the relief available to the respondents in the present circumstances of the case is through a suit under section 176 of the Contract Act. By this argument the learned counsel insists, in a way, that the respondent is precluded from bringing a suit under Order XXXVII, C. P. C. That is not the case. Under the circumstances that the execution of the promissory notes is not denied it is always open to a plaintiff to choose the manner of obtaining relief most suitable to his requirements, no matte if the debt has an additional security by way of pledge of goods. The plaintiff, under such circumstances, can either choose to press his right through a suit under Order XXXVII or to bring a suit for the recovery of amount by following the provisions of section 176 of the Contract Act. Merely because certain amount of goods are pledged with the respondent he is not precluded from bringing a suit under the promissory note which has provided him with a distinct cause of action. In the present case the amount of goods pledged with the respondents is also in dispute. The appellants contend that the total value of the goods is to the tune of Rs. 53300 whereas the respondents have denied if this is the total value a the goods and have also alleged that the goods though pledged with them are lying in the godowns within the control of the appellants and they do not find it sufficient security.
5. The second point raised by the learned counsel for the appellants is that in case where a defendant can only show triable issue he should be permitted to defend and without any conditions. In this regard he mainly relies upon Santosh Kumar. v. Moolsingh (AIR1958SC321) where it is held that:----- "Wherever the defence raises a 'triable issue' leave must be given, and when that is expressed it must be given unconditionally, otherwise the leave may be illusory."
6. Apart from the fact that this is a very sweeping statement of law the facts leading to this judgment are distinguishable from the facts in the present case. There the defendants had admitted the execution of a cheque but had pleaded that that cheque was only as a measure of a collateral security for the price of goods which had otherwise been paid for in cash. They had contended that the cheque having served its purpose, should have been returned to the defendants. This view, therefore, does not help the learned counsel for the defendants. On the other hand, our authorities indicate that where an arguable case is made out the leave to defend should be given but if conditions are attached to it that would be proper exercise of the discretion allowed to the Courts under rule '2 of Order XXXVIT, C. P. C. In Fine Textile Mills Ltd., Karachi v. Haji Umer (PLD1963SC163) leave to defend a suit under Order XXXVII had been refused by the High Court and the Supreme Court observed that if the affidavit of the defendant discloses the facts which may constitute plausible decree or even show that there is some substantial question of facts or law which needs to be tried or investigated into, the defendant would be, entitled to leave to defend. It was, however, further observed that if defence setup be vague or unsatisfactory or there be a doubt as to its genuineness the defendant should be put on terms either to furnish security or to deposit the amount claimed in Court. In the present case, the defence set up is that the amount advanced to the appellant was duly secured through pledge of goods. The question whether that is sufficient pledge for the loan is yet to be considered. Not only that but the learned counsel for the appellants has stated at the Bar that due to financial difficulties the appellants have been finding it difficult to provide security and that they are facing litigation in other matters also. The learned counsel for the respondents has stated that the godowns, in which the pledged goods are alleged to be lying have been ordered to be attached by a Single Judge of this Court. This statement the learned counsel for the appellants has not been able to deny. Under these circumstances the defence put up by the learned counsel loses its force. Financial inability to provide security has never been accepted as a ground for allowing unconditional defence in cases under Order XXXVII, C. P. C.
7. The main objection taken by the learned counsel for the respondents is that the matter is being attacked in revisions before this Court and the revisional powers of this Court are very limited which do not allow this Court to interfere in cases of the orders of the type impugned before me. He has relied upon Zafer Ahmed v. Abdul Khaliq (PLD 1964 Kar. 149). This Full Bench ruling of the then West Pakistan High Court considered the scope of section 115, C. P. C. The grounds on which the High Court was held to be able to interfere in its revisional jurisdiction were as follows:--- "If in the opinion of the High Court, such (subordinate) Court in giving the decision,
(a) has exercised or assumed a jurisdiction not vested in it by law, or
(b) has failed to exercise or declined to assume a jurisdiction vested in it by law, or
(c) while exercising its jurisdiction has taken a procedural step which is contrary to a mandatory provision of the law, or has omitted to take a procedural step which is required by a mandatory provision of the law to be taken, or
(d) while exercising its jurisdiction has taken a procedural step which is contrary to a directory provision of the law, or to a general principle of law, and which in the final result has given to one party an advantage over the other which it would not have got but for the fact that that step was taken."
8. Briefly stated, the interference at the level of the High Court in its revisional powers can be made mainly to correct jurisdictional errors. The orders under rule 3 of Order XXXVII, C. P. C. Have always been held to be discretionary orders. In such circumstances unless such orders are fanciful or arbitrary they do not call for interference by the High Court. I am fortified in this view by the authority contained in Continental Syndicate of Trades v. International Express Co. Ltd. (PLD 1959 Kar. 252).
9. In view of the above discussion I find no force in this revision and dismiss it with costs.