This order will dispose of C.M.A. No,71 of 1992 filed by the defendant under Order XXXVII, Rule 3, C.P.C. seeking unconditional leave to appear and defend the above suit filed by the plaintiff for recovery of Rs,2,95,15,000.
2. Brief facts of the plaint are that on 12-11-1991 both the parties entered into a contract through which defendant agreed to purchase 5,000 metric tons of shredded steel scrap from the plaintiff's company at the agreed price of Rs,6,360 per metric ton. This steel scrap weighing 4979.860 metric tons was lifted by the defendant on 13-11-1991 and 14-12-1991. Copy of the contract is filed by the plaintiff alongwith plaint as Annexure "A". It was one of the terms of this contract that the defendant will deliver 16 (sixteen) postdated cheques to the plaintiff as sale consideration which was compiled by the defendant. Out of these 16 cheques only one cheque, dated 5-1-1992 for Rs,2 million was honoured by the Bank and the remaining cheques were dishonored. Annexures "B-1" to "B-5" are the photo copies of the 15 cheques which were returned unpaid by the Bank. It is averred in the plaint that defendant agreed to issue fresh set of cheques and accordingly defendant issued some 13 new cheques. This fact of issuing 13 fresh cheques was confirmed by the defendant through a letter which the plaintiff has filed as Annexure "C" to the plaint. These cheques were again dishonoured. Thereafter, the plaintiff entered into various discussion with the defendant, but was not able to recover the outstanding amount. Hence this suit.
3. The case of defendant as proposed by him in his affidavit as well as in the additional affidavit filed in support of application under Order XXVII, Rule 3, C.P.C. is that it was orally agreed between the parties that the plaintiff will further supply shredded steel scrap and in consideration of such agreement post-dated cheques were issued. The defendant has denied that he has received any further supply of any scrap in furtherance of the said oral agreement. It is further stated in the affidavits that the defendant has also delivered power of attorney and title documents of Immovable Property bearing No,41, Ameer Khusro Road, Karachi, which may be treated as security.
That the said agreement was not materialized as the plaintiff failed to supply scrap. Mr. Muhammad Saleem, learned counsel for the defendant, in support of this application, has vehemently argued that the suit is not based on negotiable instrument but the plaintiff has relied upon two other documents which are contract and letter of the defendant; therefore, this suit may be treated as an ordinary civil suit for recovery of alleged amount. That the defendant has raised plausible and genuine defence and that the defendant may be granted unconditional leave to defend the above suit. He has relied upon the reported case, namely, Azmat Wali v. Hassan AI- Adwai 1983 CLC 546, Fine Textile Mills Ltd. v. Haji Umar PLD 1963 SC 163.
4. Mr. Maqbool Baqar, Advocate for the plaintiff has denied averments of the defendant's affidavit and has relied upon plaintiff's counter-affidavit. He has vehemently urged that there is no document on record to show that after issuing nearly 28 cheques the defendant ever objected in writing for non-delivery of the goods neither the defendant at any time raised claim for refund of these cheques. According to the learned counsel for the plaintiff, no defence is available to the defendant and this suit is entitled to be decreed as prayed. Mr. Maqbool Baqar, learned counsel for the plaintiff has relied upon the following reported cases viz., Allied Bank of Pakistan v. Messrs Faiz Ahmad Manzoor Ahmad and others PLD 1985 Lah. 188 and Muhammad Arif v. Abdul Qayyum 1991 CLC 442.
5. The defendant has not denied that on 12-11-1991 agreement Annexure "A" was executed between the parties and that in furtherance of the same 16 cheques were delivered by the defendant to the plaintiff. The execution of Annexure "C"; which is further agreement through which earlier agreement was modified and in furtherance of the said agreement, 13 more cheques were delivered by the defendant to the plaintiff, has again not been denied by the defendant. The only ground raised by the defendant is that the goods in question were never supplied but such averment is not supported by any document. In. Annexure "C" the defendant has admitted the fact that previously issued cheques were dishonoured by the bank and that the amount of Rs,3,06,98,000 (Rupee 19991 Pakistan Molasses Company v. Ahmed Investment (Pvt.) 1923 three crore six lacs and ninety-eight thousand only) was "outstanding" against their company. It is pertinent to note that genuineness of Annexures "A" and "C" is not disputed by the defendant. I have also compared signatures of the defendant appearing on Annexures "A" and "C" filed with the plaint with the admitted signatures of the defendant appearing on his affidavit, dated 20-10- 1992, the additional affidavit, dated 24-11-1992 and signature appearing on his Vakalatnama, all these signatures are similar and identical in nature and character.
6. There is another angle available to look at this case. These 28 cheques were delivered by the defendant during the period from 12-11-1991 to 20-1-1992. Some of the said cheques were dishonoured on 2-3-1991. The above suit was filed on 27-9-1991. The defendant has failed to bring on record any material to show that he made efforts for return of these cheques or for delivery of the goods in question. These cheques were not of petty amount which can be overlooked. Amount of these cheques comes to nearly Rs,3,00,00,000 (Rupees three crore). A business man of common prudence can never issue cheques of such huge amount without consideration and then fail to raise any protest or claim for its return. It is not the case of the defendant that on refusal of the plaintiff to supply scrap, he filed suit for damages or for specific performance. The defendant has attempted to make out a case of oral agreement against two written agreements and against 28 cheques. This unexplained silence of the defendant makes his defence, to some extent, mala fide and doubtful. My considered view is that the defendant is not able to make out a prima facie, a triable issue or arguable case and is, therefore, not entitled for unconditional leave to defend the above suit.
7. The law lay down by the Honourable Supreme Court of Pakistan in the case of Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 has been followed by this Court in various cases including the case of Azmat Wali v. Hassan Al-Adwai 1983 CLC 546. In this reported case of Fine Textile Mills, it was held by the Supreme Court of Pakistan that under section 118 of the Negotiable Instruments Act, there is an initial presumption that a negotiable instrument is made, drawn, accepted or endorsed for consideration, but this presumption is a rebuttable presumption and the onus is on the person denying consideration to allege and prove the same. It was further observed by the Supreme Court that the plea of absence of consideration did not appear to be sham or colorable defence since there was nothing available on the record to show that there was any dealing between the respondent and the appellant. In the present case, defendant has not denied execution of Annexures "A" and "C". It is an admitted position that all these cheques were post- dated but the defendant till hearing of this application never objected for non-delivery of the scrap or for return of the cheques issued. In Annexure "C", the defendant has admitted the suit amount as "an outstanding amount". Therefore, in the circumstances of the present case, there is ample evidence that the scrap in question was received by the defendant against which he has admittedly issued cheques. In this reported case, Supreme Court has further held that even if the defence set up is vague or unsatisfactory or there exists a doubt as to the genuineness in the defence proposed, even then leave should not be refused altogether but the defendant should be put on terms either to furnish security or to deposit the amount claimed in Court.
8. The facts of the cases relied upon by the plaintiff's counsel are quite different to the facts of the present case. In the case of Muhammad Arif v. Abdul Qayyum 1991 CLC 442, the defence raised was plausible and based on legal issues. It was observed by a learned Single Judge of this Court that it would not be unreasonable to entertain doubts about the plausibility of the claim in this suit. In the case of Allied Bank of Pakistan v. Messrs Faiz Ahmad-Manzoor and others PLD 1985 Lah. 181, it was held by a learned Single Judge of Lahore High Court that under Order 37, C.P.C. grant of leave to defend a suit is not a matter of course or a matter of right. It was further held that leave shall be refused if no defence worth the name is made out on facts or in law and if the defence disclosed on affidavits is sham or clourable or illusory, imaginary and may not give rise to triable issues. In another case titled as Hamidullah Khan v. Muhammad Nawaz Qasuri PLD 1982 Lah. 203, the rule laid down in Fine Textile Mills Limited was considered. It was held that it is not incumbent on the holder of a pronote to prove consideration. For further reference see Hussain v. Rajab Ali 1981 CLC 1.
In this reported case, suit was decreed by the trial Court and the civil revision was dismissed in limine as the defendant had failed to make out a plausible defence and arguable case. It was observed by a Single Judge of the Lahore High Court that the defendant failed to demonstrate before the trial Court that there exists a substantial question of law or fact which requires determination in the reported case. Order of the District Judge dismissing the application for leave to defend was upheld by the Lahore High Court.
9. In the circumstances as discussed hereinabove and keeping in view the law laid down by the Supreme Court in the case of Fine Textile Mills, I am of the considered view that the defendant has failed to establish a prima facie plausible defence or arguable case. The fact of not denying execution of Annexures "A" and "C" by the defendant in its affidavits makes the allegation that he has not collected scraps highly illusory and sham. There left no issue to be tried during the trial.
Consequences of this finding are that this application is dismissed and the suit of the plaintiff is decreed with costs. The plaintiff will also be entitled for interest at bank rate on the decretal amount from the date of suit till its realization.