Monthly Law Digest

1994 M L D 656 {Karachi}

Before G.H. Malik, J ISLAMUDDIN TAIMURI---Plaintiff

Versus

ESMAIL MUHAMMAD BAHI---Defendant

Suit No.62 of 1986, heard on 21st October, 1992.
(a) CIVIL P ROCEDURE CODE (V OF 1908)---

---O .XXXVII, Rr.1 & 2---Jurisdiction---Suit was based on negotiable instrument, amount of which was admittedly within pecuniary jurisdiction of High court when suit was filed--Suit was maintainable in circumstances. {p. 658} A (b) Civil Procedure Code (V of 1908) -----O.I, R.1, O .XXXVII, Rr .1 & 2---Suit was filed on basis of negotiable instrument (cheque) and not on original consideration---Persons who were not associated with in question could be not joined as party to suit. [p.658] B (c) Contract Act (IX OF 1872) ----Ss.15 & 16---Qanun-e-Shahadat (10 of 1984), Art.133---Suit on negotiable instrument (cheque)---Defendant setting up pleas of coercion and undue influence by authorities while putting his signature on the cheque in question---Defendants such version having not been challenged in cross-examination his plea of coercion and undue influence in signing cheque in question was established on record.---[p.660] C (d) Contract Act (IX of 1872)-----S.25---Civil Procedure Code (V of 1908), 0.XXXVII, Rr.1 & 2---Suit was based on cheque-Consideration---Proof--- failed to prove any consideration against which defendant had

issued cheque in question---Defendants assertion that said cheque had been issued by coercion and undue influence exerted by authorities on behalf of plaintiff, remained uncontroverted due to lack of cross-examination on that point ---Cheque in question, was thus, without consideration [p.661] D

Plaintiff and his counsel (absent). Ghulam Muhammad Ebrahim for Defendant. Date of hearing: 21st October, 1992.

Islamuddin Taimuri v. Esmail Muhammad Bahi

(G,H.Malik, J)

Judgment
The plaintiff has filed this suit, under Order 37, Rules 1 and 2, C.P.C for recovery of Rs.1,50.000. The case of plaintiff, as set out in the plaint, is that the defendant obtained a plot of land on Rashid minhas road, Karachi, from the government and appointed M/s. Kaleem Associates as his under-writer for developing the land and for sale of plots on that land; that M/s. Kaleem Associates, under the powers given by the defendant, collected money on behalf of the defendant and issued reservation memos to purchase; that the plaintiff along with relatives and friends paid to the defendant a total of Rs,1,59.000 including a sum of Rs.17,000 paid by the plaintiff; that subsequently, the allotment of the land to the defendant was cancelled by the Government, that, as a result of negotiations, efforts, complaints made to different authorities, the defendant on 15-11-1984 gave a cheque No. HC 576097 for Rs.1,50.000 to the plaintiff and promise to pay the balance of Rs.9,000 within a month; and that the cheque upon presentation, was dishonored by the bank with the remark stop payment,. The defendant, in his written statement, has taken the plea that in accordance with the arrangement between M/s. Kaleem Associates and him, the former were to develop the land and dispose of the same and to pay the defendant, from the proceeds, certain amount towards the plot handed over by him to them; and that M/s, Kaleem Associates, in their own capacity allotted plots to various people and collected monies from them. It is denied that M/s Kaleem Associates, had collected any money on behalf of the defendant; and it is alleged that the defendant had no knowledge of

collection of any money by M/s. Kaleem Associates from the plaintiff or from any other persons. The defendant has also denied that any negotiations were held between the plaintiff and defendant and has alleged that the plaintiff, in collusion with M/s Kaleem Associates, harassed the defendant before martial Law authorities whose commander Mushtaq, on pointation of revolver, obtained various post-dated cheques, from the defendant; and that the cheque in question in this suit was obtained from the defender on 30-10-1984 by the said commander Mushtaq under threat and coercion. It is alleged further that the defendant sent a complaint to Martial law Authorities in Rawalpindi who intervened in the matter and issued directions to stop payment of the amount of the cheque. In addition to the aforesaid plea on the merits of the case, the defendant has further averred in the written statement that the suit is bad for misjoinder of causes of action as well as for non-joinder of necessary parties; and that the suit is not maintainable. Upon the above pleas, the following issues were settled by court on the 20 th December, 1987: Whether the suite is not maintainable? Is the suit bad for non-joinder of necessary parties? Whether the cheque in question was obtained by the undue influence and coercion and is without consideration What should the decree be?

When the case came up for hearing on the 20 th February, 1989, the advocate for the plaintiff stated that since the burden of proving the issues was on the defendant, he did not wish to lead any evidence at that stage and reserved his right to lead evidence in rebuttal. The evidence of Ismail, the defendant and Muhammad Yamin was then recorded on behalf of the defendant, while Mirza Islamuddin, the plaintiff, examined himself. The evidence was thus concluded on the 4th December, 1991, and the case was adjourned to a date in the office for arguments. On the 13th of April, 1992. It was stated that the plaintiff had died recently and that his legal representatives would have to be brought on record. It was, therefore, ordered that a proper application in that behalf be filed by the counsel for the plaintiff within a week. That order was not complied with and, on the 9 th August, 1992, two weeks further time was allowed for compliance with it. However, the order was not complied with and on the 30th August, 1992, it was observed that there was no option but to proceed with the matter pursuant to the provision of Order 22, Rule 2(3), C.P.C. and an order to that effect was made.

I have today heard the arguments of Mr. Ghulam Muhammad Ebrahim, the learned advocate for the defendant, and perused the record. My findings on the issue are as follows: Issue NO. 1--- The case of the defendant is that the suit is not maintainable because, admittedly, the plaintiff is alleged to have paid only Rs.17,000 to M/s Kaleem Associates and, therefore, this court does not have pecuniary jurisdiction to entertain this suit. However, the suit is not based on the original consideration but on the cheque the amount fn which was admittedly within the pecuniary jurisdiction of this court when this suit was filed. The suit is therefore, maintainable. Issue No.2--- The issue regarding the non-joinder of necessary parties also arises from the allegation in the plaint that amount of Rs. 1,59,000 was paid not by the plaintiff alone butt by various persons severally. It is the defendant contention that all those persons who are mentioned in the plaint as having made payments to M/s Kaleem Associates should have been joined as parties to the suit. This plea of the defendant is without merit for the same reason as noted above, namely, that the suit has been filed under Order 37, Rules 1 and 2, C.P.C. on the basis of the cheque and not on the basis of the original consideration. The Only, and the real, question for determination is, may be noted that Mr. Ghulam Muhammad Ebrahim in fact submitted his arguments on Issue No.3 and not really press the first two issues. Issue No.3.---With regards to this issue the plea of the defendant in the written statement is that the plaintiff lodged a complaint against the defendant before Martial Law Authorities and that, consequently, commander Mushtaq obtained the cheque from the defendant by threats and coercion and that no money was due from the defendant to the plaintiff. The defendant in his examination-in chief has deposed as follows: In 1984, I was called to the office of the D.M.L.A., and I was asked to make payments to about 24 or 25 persons or more. I produce a notice, which was sent to me for appearance before the D.M.L.A. as Exh.5/5. I also produce three chits showing that I had been called to the office of the D.M.L.A. on 29-10-1984. The same are Exhs.5/6, 5/67 and 5/8. The person before whom I was made to appear in the office of the D.M.L.A. was Commander Mushtaq. I was given very rough treatment by commander Mushtaq. I was made to sit outside his office from morning to evening. I had sent a telegram to the D.M.L.A. complaining about the conduct of Commander Mushtaq, and I produce its copy as Exh.5/9. I was asked by

Commander Mushtaq, to send my cheque book which I did. Then he made me sign blank cheques. He told me that I had taken money from various persons in connection with the allotment of plots to them and, therefore, I had to make payments to them. I had requested him to ask those persons to show receipts, but he ignored my request and asked me to pay them the money. First I was made to stand from 8-.00 a.m. to 3-00 p.m. then I was asked to accompany Commander Mushtaq orderly and bring my cheque book from my house and thereafter, I was made to sign the cheques. The amount on the cheques was not written by me as I was made to sign blank cheques. Exhibit 5/5 is a note from the in charge of new town police station to the defendant to present himself before Commander Mushtaq on the 25 th October, 1984; Exh,5/6 is a slip of paper requiring the defendant to report at the D.M.L.A Headquarters to see Commander Mushtaq on the 29th October, 1984; and Exh,5/7 is an Entry Permit given to the defendant for entry into D.M.L.A. Headquarter to see COMMANDER Mushtaq on the 29th October, 1984; and Exh.5/8 is a slip of paper requiring the defendant to report at the D.M.L.A. Headquarters on the 30th October, 1984. Exh.5/9 is a copy of the telegram sent by the defendant to D.M.L.A. complaining of the highhandedness of Commander Mushtaq and stating that the latter obtained various cheques from him and also retained his cheque book. Exh.5/10 is a copy of the letter dated the 6th November, 1984, from the Special Assistant to President and C.M.L.A. to Martial Law Administrator Zone C, instructing him to withdraw the case of the defendant from the D.M.L.A and to investigate the case properly; and to inform the bank not to cash the cheque and Exh.5/11 is the copy of the office memorandum dated the 18th November, 1984. C.M.L.As secretariat to D.M.L.A, Karachi, forwarding therewith the copy of the petition dated the 12th November, 1984, from the defendant for return of cheques and holding inquiry. None of the above facts and documents asserted and produced by the defendant in his evidence have been challenged in cross-examination. The plaintiff has, on the other hand, admitted in his examination-in-chief that since the defendant did not make the payment, he, the plaintiff, moved an application before the Martial Law Authorities against the defendant. It is, thus, clear, that the plaintiff had made the complaint against the defendant to Martial Law Authorities and that the defendant was required to appear before those Authorities on several days in October, 1984. It is also clear from the plaintiffs statement in his examination- in-chief that he received the cheque in question after he had made the complaint to the Martial law Authorities. The only question that remains, therefore, is whether the defendant voluntarily gave the cheque to the plaintiff or whether the cheque was obtained by Commander Mushtaq as asserted by the defendant. As noted above,

the defendants version has not been challenged in his cross-examination. The plaintiff, however, has asserted in his evidence that the defendant went to him and asked him to go to the defendants office to receive payments; and that the defendant gave him the cheque. He however, does not say when and where the cheque was given to him by the defendant; nor daes he say that he went to the defendants office to receive the cheque. It also significant that upon the cheque being dishonored the plaintiff did not give any notice to the defendant or demand payment from him. In the circumstances, the plaintiff version is not worthy of belief. I, therefore, hold that the cheque was obtained under threat of action by Martial Law Authorities and, thus, by undue influence and coercion. As for the consideration for the cheque , it is obvious from the allegation in plaint that the plaintiff himself paid no more than Rs,17,000 to M/s Kaleem Associates. The cheque for the remaining amount is therefore, without consideration as far as the plaintiff is concerned. As for the amount of Rs.17000 the case of the plaintiff is that M/s Kaleem Associates received payment from him in pursuance of the power granted to them by the defendant; and the basis for that case is that the defendant had appointed M/s. Kaleem Associates as his under-writer by letter dated 31st July,, 1978, written by the defendant to the M/s Kaleem Associates. A copy of that letter has been filed as annexure B to the plaint and is Exh.7/20. The letter says We are pleased to propose your appointment as underwriter, developer, promoter, in charge for sale of plots in g gulshan-e-Ismail on S.No193 and as per terms and conditions to be decided between us. The favor of reply in token of confirmation will be much appreciated. The plaintiff himself did not produce that letter in the examination-in-chief but produced it during his cross-examination at the instance of the counsel for the defendant He has given no explanation as how and when that letter came into his possession and there is nothing to show that he was either aware of or in possession of that letter before he made payments to M/s Kaleem Associates. In any case, the letter is merely an offer by the defendant M/s. Kaleem Associates to appoint them as under-writers and contains no authority to sell the plots or to receive any money on behalf of the defendant. The plaintiff did not confront the defendant during the latters cross-examination, with any receipts but, in his own examination-in-chief produced various receipts which are Exhs.7/1 7/9. Out of these Exh7/1 pertains to the plaintiff and it bears only one signature and that is on behalf of M/s Kaleem Associates. It has admittedly not been signed on behalf of Hirani Builders at all; but even if it had purported to be signed on behalf of the defendant it

would be of no effect because M/s Kaleem Associates have not been shown to have been authorized to receive any payment on behalf of the defendant. I therefore

hold that cheque is without consideration

Issue No.4--- In view of my findings of Issue No 3 above, the plaintiff claim fails and the suit is liable to be and is hereby, dismissed with costs A.A./I-233/K --------------------------------------------Suit dismissed.

Assignment 2 Group Presentation Essentials of a Valid Contract-Elaborate the following issues framed by the court and scope of Undue Influence and Coercion in the light of above case study. Issues framed and settled by the court in the above case:
Whether the suite is not maintainable? Is the suit bad for non-joinder of necessary parties? Whether the cheque in question was obtained by the undue influence and coercion and is without consideration What should the decree be?