' Defendant No,6, Zarina Mahmood has prayed by this application for setting aside the preliminary decree passed on 9-5-1988 against her and also for grant of leave to appear and defend the suit.
2. I have heard Mr. Abdul Qadir, learned counsel for the defendant, who has contended as under.
3. That on 12-5-1990 the defendant came to know from private sources that the decree has been passed against her. The defendant immediately engaged the Advocate who filed the power on 13- 5-1990 in this Hon'ble Court.
4. That the defendant No,6 has not received any notice either through registered A.D. Or by Bailiff of this Hon'ble Court about the suit. The defendant No,6 above-named does not read the newspapers.
5. That any notice if received by any person of the company, was done without the consent or authority of the defendant No,6, moreover the defendant was never informed about the suit or the notices so received by any person of the company.
6 . That defendant No,6 is not the Director of the defendant No,1 company is not holding any share or qualification shares of the Directors and has not attended any meeting and gone to the office of the defendant No,1 Company even once.
7. That Guarantee Annexure K/6 to the plaint has not been signed by the defendant No,6 which signature is forged and the Bank Officer has falsely verified the same as no specimen signatures card of the defendant No,6 is lying with the Bank.
8. The application is supported by the affidavit of Zarina Mahmood, in which she has affirmed as under:-- "That the accompanying application under Order 37, Rule 4, C.P.C. Has been drafted under my instructions and the contents thereof are true to the best of my knowledge and belief and the same may be treated as part of this affidavit."
9. The contentions of Mr. Noorullah Manji, learned counsel for the plaintiff are as under:--
(a) That the suit was filed in the year 1986, (b) that the defendant has been served by summons and by publication under Rule 8 on 27-8-1986, (c) that the registered post envelop is filed in the file,
(d) that service by bailiff is also effected, (e) that Khursheed Anwer one of the defendants had signed for defendant No,1 as Chief Executive, (f) that publication in the Morning News on 18-7-1986 is effected, (g) that service was held good on the defendants Nos.2 to 6 on 24-8-1987, (h) that defendants Nos.2 to 6 though served but they were not present in the Court, (i) that on 28-3-1988 preliminary decree was granted, (j) that the defendant has been served by all the three modes namely, by publicatio,n, by registered post and by bailiff, (k) that defendant No,1 was regularly represented whereas the other defendants deliberately and intentionally kept out but came at a later stage, (I) 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, (m) that while the suit was pending Mr. Mashallah Khan, who is Principal Officer and Attorney of the Bank met the defendant on various occasions and she repeatedly inquired about the case.
10. That Mr. Mashallah Khan, who is the Principal Officer and Attorney of the plaintiff has sworn an affidavit in support of the above application, in which he has affirmed on Oath as under:-- '11. "With reference to para. 1 of the application, it is submitted that the suit has been filed in the year 1986 and as per procedure provided in the Banking Companies (Recovery of Loans) Ordinance, 1979, the services were effected by all the three modes, namely by publication, sending by registered post and bailiff service and all the three modes were duly an properly completed besides the defendant No,1 were regularly represented, but it seems that other defendants intentionally and deliberately kept out, so that they could come at a later stage at the time of final decree is being granted to obstruct the decree and to delay matters. The application of the defendant is, therefore, mala fide and has been made with the sole motive to delay the execution proceedings. It is also submitted that in view of the facts and circumstances it is not possible to believe that the defendant No,6 came to know of the decree on 12-5-1990."
12. With reference to para. 2 of the application, it is submitted that the entire proper procedure for service has been completed and the service has been held good and in view of the decision on question of service it has been conclusively established that the service was duly and properly effected.
13. With reference to para. 3 of the application, it is submitted that due and proper notices were served on defendant No,6 at the address provided by her and now she is estopped from raising any defences on that ground.
14. With reference to para. 4, it is submitted that the defendant No,6 is a guarantor and she has been sued as a guarantor and necessary decrees both preliminary and final have now been granted in the matter.
15. Contents of para. 5 of the application are vehemently denied. The Guarantee and Annexure "A/6" has been signed by the defendant No,6, her signatures appears. She has raised her defence deliberately with a view to delay matters.
16. Mr. Abdul Qadir, learned counsel for the defendant has referred the following case-law:--
(i) AIR 1931 Allahabad 727, Case of Ram Bharsoe v. Ganga Singh "(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."
17. In my humble view this authority is not applicable inasmuch as the defendant never received any summons or notice through bailiff. But perusal of .The suit shows that address of the defendant, given in the suit is as under:-- ' Mrs. Zarina Mahmood, having her office at 506-Muhammadi House, I.I. Chundrigar Road, Karachi.
' Whereas the addresses of all the defendants are the same as mentioned above.
18. In the authority referred 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 where and how the, summons was served."
' The address of the defendant, which is shown in the suit itself is very clear and casy also.
(ii) PLD 1979 SC 18. Case of Mst. Afzal Begum v. Y.M.C.A. Through its General Secretary "0. V, R.29, 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 service".
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."
20. This authority of the Hon'ble Supreme Court, in my humble view, is not applicable to this case because the Hon'ble 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 defendant, 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 86. Case of Abdul Karim Jaffarani v. United Bank Ltd. And 2 others:- "O.XXXVII, 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 defendant No,6 is concerned.
The Hon'ble 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 explanation 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."
(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 a 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 proceedings 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.
21. 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.
22. In the case in hand there is neither any reasonable cause nor any special circumstance to set aside the preliminary decree and allow the defendant to appear and defend the suit because the suit is already delayed and the defendant has not come with clean hands and has not been able to show the source of her information, so late to defend the suit.
(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 Hon'ble Supreme Court is not applicable to the present case of the defendant in view of the following observations of the Hon'ble 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 tribal issue."
' In this case the defendant has not been able to show any plausible and convincing reason or explanation for not defending the suit at its proper stage and has not been able to show that there is any tribal issue at present.
(iv) 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), S. 5 & 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 was 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 and defend suit inspired confidence and was supported by documentary evidence. Application for condonation of delay was granted in circumstances."
' 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 the defendant has Pakistani nationality and her address, as mentioned earlier, is of Karachi and furthermore according to the learned counsel for the plaintiff service through all the three modes was effected on the defendant.
23. Mr. Noorullah A. Manji, learned counsel for the plaintiff has referred following case-law:--
(i) 1991 CLC 1146. Case of Messrs Pak-Libya Holding Co. (Pvt.) Ltd. v. Sualeheen S. Piracha "Suit for recovery of loan. Leave to appeal and defend suit. Service on defendant was duly effected by one or 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 had failed to lo. 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 defendant was duly effected by all the three modes of service as provided for in Rule 8.
Defendant has filed application for leave to appear and defend the suit after considerable delay and has 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 institution 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 provide 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."
24. This authority is very much applicable to the facts and circumstances of the present case.
25. The contention of the learned counsel for the defendant that, service is not effected on the defendant, is not tenable and his contention that the defendant on 15-9-1990 came to know from private sources that the decree has been passed against her, is not tenable and is a frivolous defence. 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 defendant 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, Principal Officer and Attorney of the plaintiff, who in his affidavit has affirmed that the suit was filed in the year 1986 and as per the 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 defendant intentionally and deliberately kept out so that she could come at a later stage to obstruct the grant of final decree.
26. That defendant No,1 is a public company and consent of the Directors to act as Director is compulsorily, required under section 184 of the Companies Ordinance, 1984 besides defendant No,6 has executed letters of guarantee. Further it is reiterated that defendant No,6 signed the letters of guarantee, Annexure "K-6".
27. That while the suit was pending the deponent himself met the defendant No,6 on various occasions and defendant No,6 repeatedly enquired from the deponent about the present position of the case. It is a fact that letters of guarantee were duly signed by defendant No,6.
28. 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 defendant and the defendant has deliberately avoided to defend the suit. Her contentions that she had not signed the letter of guarantee, that the defendant was director of the company without her consent or authority, are totally unbelievable and afterthought.
29. 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.
30. In view of the facts and circumstances, result of the conclusions, I have arrived at as indicated above, is that this Miscellaneous Application (C.M.A. No,3517/90) fails and is dismissed with costs.
31. Mr. Manji has prayed for awarding cost in the interest of justice. As such an amount of Rs,2,000 is imposed as costs on the defendant.
' Orders are accordingly.