Conditional Order

2008 C L D 1343
[Karachi]
Before Nadeem Azhar Siddiqi, J
ERIDANIA (SUISSE) SA---Petitioner
Versus
RAJBY INTERNATIONAL (PVT.) LTD.---Respondent
J.M. No.24 of 2007, decided on 15th September, 2008.
(a) Damages---
----Claim for damages---Scope---Claim for damages is not a vested right and grant of
damages is subject to proof---Mere filing of a suit for damages cannot be termed as a
bona fide dispute.
(b) Companies Ordinance (XLVII of 1984)---
----Ss.305, 306(a) & 314(1)---Winding up of company---Failure to pay debt---

Conditional order---Petitioner sought winding up of company on the ground that the
company had failed to pay its claim---Validity---Company was not withholding the
amount due to any bona fide dispute but with mala fide intention not to pay the admitted
amount---Petition was filed for admitted amount and it was not filed just to pressurize the
company---Company admitted the claim of petitioner and S.305 (e) of Companies
Ordinance, 1984, had given a right to a creditor to seek an order of winding up provided
conditions set in Ss.306 and 314 of Companies Ordinance, 1984, were met---Neglect on
the part of company to pay the stun due after thirty days of the service of notice deemed
that company was unable to pay its debts---Such neglect to pay had furnished a ground
for winding up of the company, irrespective of the fact that the company was
commercially solvent---High Court exercising discretion under S.314 (1) of Companies
Ordinance, 1984, directed the company to pay undisputed amount to petitioner within
four weeks and on failure to pay the amount, respondent company was directed to be
wound-up---Petition was allowed accordingly.
Humera Abdul Aziz Essa v. Al-Abbas Cement Industries Ltd. 2008 CLD 214 ref.
Salman Talibuddin for Petitioner.
Shaiq Usmani for Respondent.
Date of hearing: 15th September, 2008.
JUDGMENT
NADEEM AZHAR SIDDIQI, J.---This petition has been filed for winding up of the
respondent on the ground that the respondent is unable to pay the admitted debts of US$
1,710,690.85 to the petitioner.
The facts necessary for disposal of the petitioner as stated in the petition are that under
Joint Venture Contract signed by the petitioner on 21-3-2006 and by the respondent on 6-
4-2006 the respondent is required to pay the petitioner US$ 2,780,344,50 on or before 7th
March, 2007 and on failure of the respondent to pay the amount notice was served in
response whereof the respondent admitted its liability to pay a sum of US$ 1,710,690,85.
The petitioner served notice under section 306 of the Companies Ordinance, 1984 for
payment of undisputed amount and notice of intent to arbitrate under the JVC for the
disputed amount.
No counter to the main application has been filed. However, the respondent has filed
counter-affidavit to various miscellaneous applications filed by the petitioner.
Page No. 1 of 3
In the counter-affidavit to C.M.A. No.720 of 2007 the respondent has not denied the
agreement and C.M.A. submitted that the total amount payable to the petitioner was
worked out to be US$ 1,71,0,690.85. The respondent has further submitted in the
counter-affidavit that the said amount could be paid to the petitioner only when the
documents for cargo were made available as the respondent had got the cargo released
under Letter of Indemnity (LOI).
Learned counsel for the petitioner submits that the amount is admitted and the required
notice under section 306(a) of the Companies Ordinance, 1984 was served on the
respondent who within thirty days, thereafter, neglected to pay the sum and by
implication of law is deemed to be unable to pay its debts. He then submits that for the
disputed amount award has been passed, which was filed in Court. He then submits that
in the counter-affidavit as well as in the additional counter-affidavit the respondent has
admitted the amount and the admission is sufficient to wind up the respondent.
On the other hand, learned counsel for the respondent submits that the amount was not
paid as there is a bona fide dispute between the parties with regard to the right of the
petitioner to receive the amount in absence or delivery or original documents and that the
respondent has filed a suit bearing No.961 of 2007 and had a lien on the said amount and
are holding the same as security for their claim in the suit. He then submits that mere
avoidance to pay the debt due to bona fide dispute is not sufficient to wind up the
company. He then submits that the petitioner has filed this petition to pressurize the
respondent a commercially viable co, to pay the dept otherwise not due. He has relied
upon the judgment reported as Humera Abdul Aziz Essa v. Al-Abbas Cement Industries
Ltd. 2008 CLD 214.
During the course of hearing the learned counsel for respondent has made a statement
that the respondent has deposited the disputed amount in FDR and can deposit the same
in Court in Suit No.961 of 2007 subject to decision of that suit.
Learned counsel for the respondent in rebuttal submits that the Court has to see whether
the dispute is bona fide or just to avoid payment. He then submits that the original
documents have been placed on record and Letter of Indemnity against the payment has
been delivered to the respondent and the respondent has no justification to withhold the
amount on the pretext of pendency of suit for damages.
I have heard the learned counsel for the parties and perused the record of this case made
available before me.
From the pleadings of the parties it appears that the Joint Venture Contract is not
disputed. The respondent has also not disputed an amount of US$ 1,710,690.85. The only
dispute appears to be non-delivery of original documents and pendency of Suit No.961 of
2007. The petitioner has deposited one set of original documents for the cargo in Court.
In its rejoinder the petitioner has explained that one Bill of Lading was to be provided to
the respondent once the sales had been finalized, which was not done because of the
respondent's refusal to pay the entire amount. The second Bill of Lading was provided to
the owner of vessel and the third Bill of Lading was given to the insurer. The contention
of the respondent that the amount is held in trust till such time the petitioner is able to
produce all the original documents to discharge 'the respondent's liability towards any
claimant has no force for the reason that the petitioner has accounted for the original Bill
of Lading, provided Letter of Indemnity to the vessel and in spite of considerable
longtime no claim has been received by the respondent with regard to the cargo and
above all the petitioner has not only indemnified the vessel, but also indemnify the
respondent by issuing Letter of Indemnity. The other contention of the respondent is
filing of suit for damages. Mere filing of the suit is not sufficient and justified to withhold
the admitted amount. The claim for damages is not a vested right and the grant of
damages is subject to proof and mere filing of a suit cannot be termed as a bona fide
dispute.
In view of the above, it is apparent that the respondent is not withholding the amount due
to any bona fide dispute but with mala fide intention not to pay the admitted amount to
the respondent. The contention of the learned counsel for respondent has also no force as
the petition has been filed for the admitted amount and it cannot be said that the same
was filed just to pressurize the respondent.
Page No. 2 of 3
From the conduct of the company, it cannot be said that neglect to pay the debt is
premised on bona fide dispute.
In the instant matter the respondent admits the claim of the petitioner to the extent US$
170,690.85. Section 305(e) gives right to a creditor to seek an order of winding-up
provided conditions set at in. sections 306 and 314 of the Companies Ordinance, 1984,
are met. Neglect on the part of the company to pay the sum due after thirty days of the
service of notice deemed to be unable to pay its debts. Such neglect to pay furnishes a
ground for winding up of the company, irrespective of the fact that the company is
commercially solvent.
The respondent in this matter was not able to show that the winding up petition had been
filed as a pressure tactic. Section 314 of the Companies Ordinance, 1984 provides that
even if the Court was of the opinion that the facts justified in making a winding up order,
Court could pass other order as it may deem fit. Exercising the discretion under section
314 (1) of the Companies Ordinance, 1984 I direct the respondent to pay the undisputed
amount of US$ 1,710,690.85 to the petitioner within four weeks from to day and on
failure of the company/ respondent to pay the said amount within above stipulated period
the company/respondent is directed to be wound-up. In case the winding up order is to be
drawn the Official Assignee is appointed as official Liquidator to carry out the winding
up of the respondent as provided for under the Companies Ordinance, 1984.
Copy of this judgment be sent to the Registrar of Companies and to the Official Assignee
for Compliance.
The petition is allowed in the above terms.
M.H./E-9/K Petition allowed.
Page No. 3 of 3
2008 C L D 1336
[Karachi]
Before Nadeem Azhar Siddiqi, J
FAYSAL BANK LTD. through Attorneys-Petitioner
Versus
SOUTHERN NETWORKS LTD.---Respondent
J.M. No.13 of 2007, decided on 16th September, 2008.
(a) Companies Ordinance (XLVII of 1984)---
----S.305---Winding up of company---Object---Conditional order---Duty of Court---

Scope---Before passing winding up order, court has to satisfy itself and to form an
opinion in terms of S.305(h) of Companies Ordinance, 1984, that it is just and equitable
that the company should be wound up---Object of proceedings is to find out solvency or
insolvency of the company and not to settle claims of creditors---Object of winding up is
also not to coerce the company to make payment to unpaid creditor but to secure
discontinuation of functions of such company, which has ceased to be commercially
solvent and viable.
(b) Companies Ordinance (XLVII of 1984)---
----Ss.305, 306(a) & 314(1)---Winding up of company---Failure to repay debts---

Petitioner sought winding up of respondent company on the ground that it had failed to
repay its debts---Respondent did not come forward with any defence and amount claimed
by petitioner became undisputed---Effect---High Court keeping in view the provisions of
S.314(1) of Companies Ordinance, 1984, instead of directly ordering for winding up of
the company, directed the company to pay undisputed amount to petitioner within eight
weeks, and on failure to pay the amount, the company would' be wound up---Petition was
allowed accordingly.
Arshad Tayebally for Petitioner.
Nemo for Respondent.
Date of hearing: 16th September, 2008.
JUDGMENT
NADEEM AZHAR SIDDIQI, J.---This is a petition under sections 305/321 of the

Companies Ordinance, 1984, filed by the petitioner Fysal Bank Limited against
respondent, Southern Networks Limited with the following prayers:--
(i) "to direct that the respondent-Company be wound-up on account of its inability to pay
its debts;
(ii) to appoint an Official Liquidator acceptable to the petitioner to take charge of the
assets and properties, accounts and management of the respondent company with full
powers under the Companies Ordinance, 1984 to liquidate the Respondent Company;
(iii) to grant any other/further/better relief which this Honourable Court may consider fit
and proper in the circumstances of the present case; and
(iv) cost of the petition."
Brief facts of the case are that the petitioner is a banking company conducting business of
banking and the ,respondent is a Public Limited Company engaged in business of Digital
Wireless Television Service using Multi-point Multi channel Distribution System
technology. The petitioner entered into to agreement with the respondent for the financing
Page No. 1 of 3
of 12,000 subscribers to the extent of a maximum amount of Rs.72,000,000. The
obligations under this agreement were secured by an irrevocable and unconditional
guarantee of the respondent. Accordingly, between July, 2004 and March, 2005, the
petitioner disbursed various amounts to the customers of the respondent to maximum
limit of Rs.72,000,000. The respondent was to repay the said amount in monthly
instalments of Rs.1,933,613. Till September 2004 respondent made its monthly payments
regularly, however, thereafter the respondent started delaying the same. Finally, since
April, 2006 the respondent completely ceased to make any payment of the plaintiff.
Petitioner served legal notice dated 11-9-2006 in terms of section 305/306 of the
Companies Ordinance, 1984 in response to which respondent issued three cheques each
amounting to Rs.1,933,614. However on presentation all the three cheques were
dishonoured. Thereafter, the petitioner served another legal notice dated 7-12-2006 upon
the respondent for payment of the outstanding amounts. However the respondent failed to
pay the outstanding amounts to the petitioner. Hence this petition for winding-up the
respondent company under sections 305/321 of the Companies Ordinance, 1984 on the
ground that the respondent is unable to pay its debts and, therefore, it is just and proper
and in the interest of justice that the respondent company be wound-up.
On 5-9-2007 notices were issued to the respondent as well as Register, Joint Stock
Companies. On the said date learned counsel for the petitioner clarified that originally
respondent's registered office was situated as Islamabad, however, subsequently it was
shifted to 5-Y, Block-6, P.E.C.H.S. Karachi. It was therefore ordered that the notice be
issued to the respondent at its Karachi address. For correction of the address of the
respondent an application bearing C.M.A. No.892 of 2007 was filed which was allowed
vide order dated 22-10-2007 and the amended title was taken on record. The Additional
Registrar of Companies filed comments on 23-11-2007.
Although notices were served upon the respondent through bailiff, however, when one
appeared on its behalf in the interest of justice it was ordered on 27-11-2007 that notices
may also be issued through publication in the daily "JANG" and the daily "DAWN".
Accordingly, notices were 5-12-2007. The notice was also published in Official Gazette
dated 26-12-2007. Even after the publication of the notices in the said newspapers none
appeared on behalf of the respondent. The Additional Registrar of Companies filed his
comments on 23-11-2007.
I have heard Mr. Arshad Tayebly, learned counsel for the petitioner. However, none has
appeared on behalf of the respondent to defend the present petition despite service of
notice upon it in accordance with law.
As per the agreements entered into between the petitioner and the respondent, the
Petitioner Bank provided financing to the 12,000 subscribers to the tune, of
Rs.72,000,000 which the respondent was required to pay back to the petitioner in
monthly installments of Rs.1,933,613. Such monthly instalments were paid till
September, 2004 and thereafter the respondent started delaying the payments and,,
finally, since April, 2006 the Respondent completely stopped the monthly payments to
the petitioner. The respondent issued three cheques which were dishonoured. A legal
notice under sections 305/306 of the Companies Ordinance was served on September
12,2006. Thereafter, in order to give another chance to the respondent, the petitioner
issued another legal notice dated October 7,2006, however, the respondent failed to pay
the outstanding amount to the petitioner. Issuances of cheques prima facie, shows
admission on the part of the respondent in respect of the amounts due by it to the
petitioner.
Since the respondent has not filed any reply it appears that there is no dispute, that the
respondent has obtained financial facilities and thereafter has failed to repay the amount
to the petitioner despite service of notice under section 306 to the Companies Ordinance
1984.
Subsection (e) of section 305 of the Companies Ordinance 1984 provides that a company
may be wound up by Court if the company has failed to repay its debts. Subsection (a) of
section 306 of the Companies Ordinance 1984 provides that a company shall be deemed
to be unable to pay its debts if a demand requiring the company to pay sum due has been
served and the company has for thirty days thereafter neglected to pay the sum, or to
Page No. 2 of 3
secure or compound for it to the reasonable satisfaction of the creditor. The Court before
passing the winding up order has to satisfy itself and to form an opinion in terms of
subsection (h) of section 305 of the Companies Ordinance that it is just and equitable that
the company should be wound up. The object of the proceedings appears to be to find out
solvency or insolvency of the company and not to settle the claims of creditors. The
object is also not to coerce the company to make payment to unpaid creditor but to secure
discontinuation of functions of such company, which had ceased to be commercially
solvent and viable.
The petition has been filed on the ground that the company is unable to pay its debts and
that it is just and equitable that the company should be wound up. Subsection (1) of
section 314 of the Companies Ordinance 1984 provides that even if the Court is of the
opinion that the facts justified in making a winding up order, Court could pass other order
as it may deem fit. The respondent has not come forward with any defence and the
amount claimed by the petitioner appears to be not disputed. However, keeping in view
the provisions of subsection (1) of section 314 of the Ordinance I, instead of directly
ordering for winding up of the company directed the respondent to pay the undisputed
amount to the petitioner within eight weeks from today and on failure of the respondent
to pay the said amount within the above stipulated period the company/respondent is
directed to be wound up. In case the winding-up order is to be drawn the Official
Assignee is appointed as Official Liquidator to carry out the winding-up of the
respondent company as provided for under the Companies Ordinance 1984.
Copy of this judgment be sent to Registrar of Companies and to the Official Assignee for
compliance.
The petition is disposed of in the above terms.
M.H./F-48/K Order accordingly.
Page No. 3 of 3
2006 Y L R 1945
[Lahore]
Before Mian Saqib Nisar, J
MUNAWAR HUSSAIN---Appellant
Versus
AMIR AYYUB and 4 others---Respondents
F.A.O. No.58 of 2005, heard on 10th May, 2006.
Specific Relief Act (I of 1877)---
----S.12---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Interim injunction,

grant of---Conditional order---Balance of convenience, prima facie case and irreparable
loss---Proof---Steps necessary for performance of agreement---Defendants executed
agreement to sell in favour of plaintiff and had received earnest money---Plaintiff
asserted that he was willing to make the balance payment but defendants were not ready
to execute sale-deed in his favour---Contention of defendants was that the plaintiff did
not perform material steps in performance of his part of agreement, thus Trial Court
declined to grant interim injunction---Validity---Agreement to sell was admitted by
defendant, receipt of an amount of Rs.500,000 as advance money was also admitted---No
overt act was on the part of defendants to show that they ever had cancelled the
agreement to sell such as by service of any notice---Even if plaintiff had not mentioned in
his legal notice about such steps but had prima facie proved those in the matter, no
presumption for such omission could be raised against him---Prima facie, it was
established on record that assessment of the property for the purpose of payment of
requisite fee was procured by plaintiff from Cantonment Board and he purchased stamp
papers for sale-deed, which might be a bit deficient in the value and pay order of the
consideration was got prepared---Such steps were in positive direction and to impute at
such stage that plaintiff was not ready and willing would be a harsh view and such
question was yet to be resolved through evidence---Plaintiff had prima facie proved his
case, the balance of convenience and irreparable loss also tilted in his favour---To prevent
further complication and multiplicity of proceedings, it was expedient that the defendants
should be restrained from further alienating the property but subject to the condition of
deposit of balance consideration amount---Order passed by Trial Court was set aside and
interim injunction was granted---Appeal was allowed in circumstances.
Fateh Muhammad v. Muhammad Hanif and others PLD 1990 Lah 82; Mrs. Parveen
Begum v. Raja Muhammad Sarwar Khan PLD 1956 W.P. Kar 521 and Mst. Nazir Begum
and 2 others v. Muhammad Tahir and another 2005 CLC 925 ref.
Mian Zafar Iqbal Kalanauri for Appellant.
Jahangir A. Johja for Respondents.
Date of hearing: 10th May, 2006.
JUDGMENT
MIAN SAQIB NISAR, J.---The appellant on 12-10-2002 filed a suit for the specific
performance against the respondents claiming that the respondents through an agreement
dated 30-8-2002, had agreed to sell the suit-land measuring 8 Kanals and 10 Marlas,
situated in Mauza Shajpal, Lahore Cantt. to the appellant for a total consideration of
Rs.80,43,000, out of which, a sum of Rs,5,00,000 was paid to the respondents as an
advance/earnest money, whereas on the balance payment, respondents were obliged to
execute the sale-deed by a target date i.e. 15-9-2002, but the respondents failed. It is also
mentioned in the plaint that the appellant made efforts to seek the demarcation of the
property; the payment was endeavoured to be made to the respondents; stamp papers
were purchased for the execution of the sale-deed; the price of the property was got
assessed from the Cantonment Board for the purpose of the payment of the cantonment
Page No. 1 of 3
fee; pay order was also prepared in the name of the respondents, but the respondents
failed to finalize the transaction, hence the suit. The respondent No.1, denied the
execution of the agreement to sell, as he is not signatory thereto, but the other
respondents admitted the same, as also the receipt of the part consideration of
Rs.5,00,000, but they took up the defence that it is the appellant, who failed to perform
his part of the agreement by a target date i.e 15-9-2002 and resultantly, they are not
bound to perform the agreement.
2. Along with suit, the plaintiff/ appellant also moved an application for the grant of
temporary injunction, seeking restraint against the respondents from alienating the suit
property in any manner whatsoever; however, this application was subsequently
withdrawn to the extent of respondent No.1, but pressed for the other respondents.
Anyhow, learned trial Court, vide order dated 9-3-2005, has dismissed the application
holding that the appellant has failed to prove a prima facie case in his favour and his
rights are also protected under the rule of lis pendens. Hence this appeal.
3. Learned counsel for the appellant state that the protection of lis pendens is no ground
to refuse an injunction; it is further stated that the appellant has proved a prima facie case
i.e. about the execution of the agreement; the payment of the advance consideration,
which otherwise is admitted by respondents Nos.2 to 5; he was/is ready and willing to
perform his part of the agreement, because of the overt steps taken by him in the
direction, as mentioned in the plaint, therefore, the refusal of the injunction to the
appellant on the ground that he has failed to establish a prima facie case is misconceived.
Reliance in this behalf has been placed upon the judgments reported as Fateh Muhammad
v. Muhammad Hanif and others (PLD 1990 Lahore 82), Mrs. Parveen Begum v. Raja
Muhammad Sarwar Khan (PLD 1956 W.P. Karachi 521) and Mst. Nazir Begum and 2
others v. Muhammad Tahir and another (2005 CLC 925).
3. Confronted with the above, the learned counsel for the respondents has referred to a
legal notice got issued by the appellant, to argue that all the steps mentioned in the plaint
and the efforts made by the appellant to seek the enforcement of the agreement are not
specifically mentioned therein, thus it means that the entire story is the result of an
afterthought, therefore, it shall have the reflection' upon the conduct of the appellant, who
according to the counsel, shall be deemed having not approached the Court with clean
hands, resultantly, the equitable relief cannot be granted to him. It is also stated that the
stamp paper purchased for the purpose of sale-deed is also of lesser amount than the
required.
4. I have heard learned counsel for the parties and find that the agreement to sell is
admitted by respondents Nos.2 to 5; receipt of an amount of Rs.5,00,000 as an advance
money is also admitted; there is no overt act on part of the respondents that they ever
have cancelled the agreement to sell such as by service of any notice. Thus even if the
appellant has not, mentioned in his legal notice about the said steps, but has prima facie
proved those in the matter, no presumption for such omission can be raised against him. It
is prima facie established on the record that the assessment of the property for the
purpose of the payment of the requisite fee, was procured by the appellant from the
Cantonment Board; he purchased the stamp paper for the sale-deed, may be a bit
deficient in the value; pay order of the consideration was got prepared. Obviously these
steps are in the positive direction and to impute at this stage that the appellant was not
ready and willing shall be some-what a harsh view and this question is yet to be resolved
through evidence.
In the light of above, I am of the considered view that the appellant has prima facie
proved his case, the balance of convenience and the rule of irreparable loss also tilts in
his favour and thus to prevent further complication and multiplicity of the proceedings, it
is expedient that the respondents Nos.2 to 5, should be restrained from further alienating
the property but subject to the condition of the deposit of the balance consideration to the
respondents i.e. Rs.53,53,666; resultantly, by setting aside the impugned order, the
injunction in favour of the appellant to the extent of defendants Nos.2 to 5, is granted
restraining them from alienating the property, and the appellant minus consideration
amount falling to the share of respondent No.1, against whom, the application has been
withdrawn, which comes to Rs.21,89,234; is directed to deposit the payment of the
balance amount of consideration of Rs.53,53,666 with the trial Court within a period of
Page No. 2 of 3
one month. However, if the amount is not so deposited, this appeal shall be deemed to
have been dismissed.
M.H./M-277/L Appeal allowed.
Page No. 3 of 3
2006 M L D 1709
[Lahore]
Before Ch. Ijaz Ahmad and Mian Hamid Farooq, JJ
Messrs SHAHEEN PUMPS (PVT.) LTD. through Chief Executive---Appellant
Versus
Messrs BEACON ENGINEERING INDUSTRY through Proprietor and another---

Respondents
Regular First Appeal No.268 of 2003, heard on 19th January, 2004.
(a) Civil Procedure Code (V of 1908)---
----O.XXXVII, Rr.2 & 3(2)---Suit for recovery of money on the basis of dishonoured
cheques---Conditional leave to defend---Discretion---Trial Court granted leave to defend
the suit on the condition that the defendant should furnish a bank guarantee of a part of
suit amount and personal surety for the remaining sum---Defendant did not comply with
the terms of conditional order---Trial Court had recorded ex parte evidence and decreed
the suit---Validity---Matter was within discretion of the Court---Order passed was not
illegal, without jurisdiction or even arbitrary and harsh---Tagging condition of bank
guarantee and personal surety being in the interest of justice, was maintained in
circumstances.
Mian Rafique Saigol and another v. Bank of Credit and Commerce International
(Overseas) Ltd. and another PLD 1996 SC 749 and Shahzada Muhammad Umar Beg v.
Sultan Mahmood Khan and another PLD 1970 SC 139 ref.
(b) Civil Procedure Code (V of 1908)---
----O.XXXVII, R.3(2)---Suit for recovery of money on the basis of dishonoured

cheques---Leave to defend---Conditional order---Condition attached to leave to defend
was not complied with, Trial Court dismissed application for leave to defend, recorded ex
parte evidence and passed a decree with costs and interest at rate 20% per annum---
Validity---Defendant had failed to fulfill the condition subject to which leave to defend
was granted---Was the duty of the Court to pass a decree against the defendant in
circumstances.
Abdullah v. Shaukat 2001 SCMR 60 Col. (Retd.); Ashraf Ahmad and others v. Sh.
Muhammad Wasim 1999 SCMR 2832; Aftab Iqbal Khan Khichi and another v. Messrs
United Distributors Pakistan Ltd. Karachi 1999 SCMR 1326 and Fayyaz-ul-Hassan v.
Messrs National Feed (Pvt.) Ltd. 2001 MLD 1630 ref.
(c) Civil Procedure Code (V of 1908)---
----O.XXXVII, R.2(2)(a)---Negotiable Instruments Act (XXVI of 1881), S.79---Suit for

recovery of money on the basis of dishonoured cheques---Interest---Trial Court had
awarded interest at the rate of 20%-Order of Trial Court was neither based on any
material or document, nor same was contractually stipulated---Rate of interest was
reduced to 6% in circumstances.
Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 heirs) v. Messrs Ghulam Nabi
Corporation Ltd. Lahore PLD 1971 SC 550 rel.
Muhammad Ibrahim for Appellant.
Rana Farman Ali Sabir for Respondents.
Date of hearing: 19th January, 2004.
JUDGMENT
Page No. 1 of 4
MIAN HAMID FAROOQ, J.---The appellant/defendant, through the filing of the present
appeal, has assailed the judgment and decree, dated 20-3-2003, whereby the learned
Addl. District Judge decreed respondent's suit for the recovery of Rs.5,05,697 with costs
and interest at the rate of 20% per annum in favour of the respondent.
2. Briefly stated the facts of the case are that the respondents filed a suit for the recovery
of Rs.5,05,697 with interest, against the appellant, before the learned District Judge,
under the summary procedure provided under Order XXXVII C.P.C., on the basis of six
alleged dishonoured cheques, reportedly issued by the appellant. After the receipt of the
summons, the appellant filed an application seeking leave to appear and defend the suit,
which was resisted by the respondent and the learned trial Court dismissed the said
petition vide order, dated 20-8-2002, however upon filing a revision petition (C.R.
No.2082 of 2002), this Court set aside the said order and directed the learned Addl.
District Judge to decide the aforenoted application afresh vide order, dated 20-11-2002.
Pursuant. thereto the learned Addl. District Judge allowed the said application and leave
to appear and defend the suit was granted to the appellant, however subject to the
condition that the appellant shall furnish the bank guarantee for the sum of Rs.3,00,000
and personal surety for the remaining amount of Rs.2,05,697 to the satisfaction of the
learned trial Court on or before 10-3-2003 vide order, dated 17-2-2003. The appellant did
not comply with the terms of conditional order, dated 17:2-2003, therefore, the learned
trial Court dismissed its application for leave to appear and defend the suit vide order,
dated 10-3-2003. Thereafter the ex, parte evidence of the plaintiff was recorded and the
learned Court proceeded to pass a decree for the recovery of Rs.5,05,697 with costs and
interest @ 20% per annum in favour of the plaintiff and against the defendant, vide
judgment and decree, dated 20-3-2003, hence the present appeal.
3. The learned counsel for the appellant has contended that in view of the case, as made
out by the appellant, he was entitled for the unconditional leave to appear and defend the
suit and the conditional order, dated 17-2-2003 for the grant of leave is not sustainable in
law. He has further submitted that the learned trial Court, while decreeing the suit on the
basis of order, dated 17-2-2003, has committed legal errors, hence the impugned
judgment and decree deserves to be set aside. Conversely, the learned counsel for the
respondent, while supporting various orders and the consequent judgment and decree, has
submitted that the appellant could not furnish the bank guarantee and personal surety, as
directed by the learned Court on 17-2-2003, therefore, there was no alternative left for the
Court except to pass the impugned judgment and decree, which was passed in accordance
with law.
4. To our mind, pivotal questions, to be determined in the present appeal, are as to

whether under the facts and circumstances of the case, the appellant was entitled for
unconditional leave to appear and defend the suit and as to whether order, dated 17-2-
3003, whereby the appellant was granted conditional leave to appear and defend the suit,
was passed in accordance with law. For this, one has to first go to provision of Order
XXXVII Rule 3(2), C.P.C., which provides that "leave to defend may be given un-
conditionally or subject to such terms as to payment into Court, giving security, framing
and recording issues or otherwise as the Court thinks fit." It flows from the bare perusal
of the aforenoted provision of law that discretion has been conferred upon a Court to
grant leave to defend the suit, either unconditionally or subject to such terms as to
payment into Court to giving security. In this case, the learned trial Court, while
considering the contents of the leave application, came to the conclusion that the
appellant is entitled for the grant of leave to defend the suit, allowed its application, but
subject to certain conditions, in exercise of powers under the aforenoted provision of law.
It has nowhere been laid down under Order XXXVII C.P.C. that when a case is made out,
a defendant must be granted unconditional leave to defend the suit and in fact this matter
has been left to the discretion of the Court. In this case, the learned trial Court, in exercise
of its discretionary powers, has tagged the condition with leave to appear and defend the
suit. The attachment of the said condition cannot be termed, under any stretch of
imagination, as illegal, without jurisdiction or even arbitrary and harsh. We are of the
view that if the appellant would not have been able to make out a case for the grant of
leave to defend the suit, then obviously, its application was liable to be dismissed. The
learned trial Court, under the present set of circumstances, rightly came to the conclusion
that the appellant is entitled for the grant of leave, but the same would be subject to
furnishing of bank guarantee and personal surety for the suit amount. The approach of the
Page No. 2 of 4
learned trial Court indicates that it was conscious of the fact that although the appellant is
entitled for the grant of leave, yet tagging up of condition of bank guarantee and personal
surety would be in the interest of justice. We further find that in this case, the learned trial
Court, after the dismissal of appellants' leave application, for the non-compliance of
order, dated 17-2-2003, did not act mechanically, but proceeded to record the ex parte
evidence of the respondent, wherein, certain document, including the cheques in question
were also tendered. In a case reported as Mian Rafique Saigol and another v. Bank of
Credit and Commerce International (Overseas) Ltd. and another (PLD 1996 SC 749), it
was held that "exercise of discretion by Court granting leave to defend to a defendant,
subject to the condition of furnishing bank guarantee was not open to any exception by
the Supreme Court in circumstances".
5. There is yet another aspect of the case. It is settled law that it is within the discretion of
the Court to grant leave to defend either conditionally or unconditionally. In this case, we
are of the view that the learned trial Court, while exercising its discretionary powers, has
rightly attached a condition of furnishing bank guarantee with the grant of leave. We find
that the said exercise of discretion is neither arbitrary nor fanciful and the same has been
exercised in accordance with the recognized principles, governing the exercise of
discretion. We are not inclined to interfere with the discretionary orders, passed in
accordance with law, as the discretion has been exercised properly and in consonance
with the record of the case. Reference can be made to Shahzada Muhammad Umar Beg v.
Sultan Mahmood Khan and another (PLD 1970 SC 139).
In the above perspective, we are of the firm view that order, dated 17-2-2003 for the grant
of conditional leave to appear and defend the suit was properly, legally and validly passed
as we do not find any infirmity in it, hence the same is maintained.
6. The next question, which arises is as to what would be the legal effect, in case the
appellant fails to fulfil the condition, subject to which it was granted leave to defend the
suit. It is settled law that when the defendant fails to fulfil the condition subject to which
the leave was granted, it is the duty of the Court to pass a decree against the said
defendant. If any cases are needed Abdullah v. Shaukat (2001 SCMR 60), Col. (Retd.)
Ashraf Ahmad and others v. Sh. Muhammad Wasim (1999 SCMR 2832), Aftab Iqbal
Khan Khichi and another v. Messrs United Distributors Pakistan Ltd. Karachi (1999
SCMR 1326) and Fayyaz-ul-Hassan v. Messrs National Feed (Pvt.) Ltd. (2001 MLD
1630) can be referred.
7. We have examined the impugned judgment and decree and find that the learned trial
Court under the present set of circumstances, was justified in passing a decree of
Rs.5,05,697 for the recovery against the appellant, hence the judgment does not call for
any interference and findings to that extent are maintained.
8. There is another aspect of the case, which cannot be ignored. Upon the examination of
the impugned judgment, we find that the learned trial Court, while decreeing the suit, has
also awarded the interest @ 20% per annum in favour of the respondent, however, it is
not discernible from the available record that upon the basis of which
material/documents, the learned Court has awarded the interest @ 20%. Admittedly no
contractual rate of interest was stipulated between the parties. We do not find any
document on record on the basis of which it could be urged by the respondent that the
appellant agreed to pay the outstanding amount together with interest @ 20%.
The issuance of cheques by the appellant has not been denied. It flows there-from that the
suit amount was illegally withheld by the appellant, which has definitely caused some
loss to the respondent, as he was deprived from the utilization of his amount without any
legal justification. In the above perspective, we find that the learned trial Court, while
granting interest @ 20% has exercised its discretions arbitrarily and in a fanciful manner,
thus we are inclined to interfere in the discretion exercised by the learned trial Court. In
view of section 79 of the Negotiable Instruments Act read with the principle laid down in
the case reported as Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 heirs) v.
Messrs Ghulam Nabi Corporation Ltd. Lahore (PLD 1971 SC 550) we hereby grant
interest @ 6% instead of 20% on the suit amount from the date of the institution of the
suit till realization and to that extent the decree stands modified.
Page No. 3 of 4
9. Upshot of the above discussion is that the present appeal is partly allowed and the
impugned judgment and decree is modified to the extent that rate of interest chargeable
on the suit amount would be 6% instead of 20%, from the date of the institution of the
suit till realization. Rest of the terms of the judgment and decree are intact and shall hold
the field.
M.I./S-32/L Appeal dismissed.
Page No. 4 of 4
P L D 2006 Karachi 545
Before Nadeem Azhar Siddiqui, J
Messrs BAHRIA FOUNDATION, KARACHI---Plaintiffs
Versus
ABDUL ALEEM BUTT---Defendant
Civil Suit,No.1110 of 2001, decided on 13th June, 2006.
----O. XXXVII, Rr. 2 & 3---Recovery of money on the basis of negotiable instrument---
Leave to defend the suit, non-availing of---Effect---If defendant has failed to obtain leave
to defend the suit, Court is required to apply its mind to the facts and documents, placed
on record before passing any order or judgment, notwithstanding the fact that no person
has appeared before it to oppose such order or the person who wanted to oppose was not
allowed to oppose because he failed to fulfill the requirement of law.
(b) Stamp Act (II of 1899)---
--S. 11---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Promissory note written

on stamp paper---Defendant assailed promissory note on the ground that it was not
written on a paper containing adhesive stamp as required under S.11 of Stamp Act,
1899---Validity---Provisions of S.11 of Stamp Act, 1899, were directory and permissive
in nature and were not mandatory---Promissory note could be written on a paper having
adhesive stamps and could also be written on a stamp paper---Only because the
promissory note was not written on a paper having adhesive stamp did not lose its utility
as promissory note---Not necessary that promissory note must be affixed with adhesive
stamp---Promissory note written on stamp paper was as good as written on paper
containing adhesive stamps.
Muhammad Akram v. Khuda Bux 2000 CLC 759 and Farid Akhtar Hadi v. Muhammad
Latif Qazi 1988 CLC 2397 distinguished.
Muhammad Sharif v. Muhammad Hashim Paracha and another PLD 1987 Kar. 76; Habib
Bank Limited v. Chaudhry Cloth House 1991 CLC 164; P. Moorthy v. A.R.
Kothandaraman AIR 1978 Madras 412 and Somdatta v. Abdul Rashid AIR 1968
Rajasthan 45 rel.
----O. XXXVII, Rr. 2 & 3---Recovery of money on the basis of promissory note---Leave
to defend the suit---Non-compliance of conditional order---Presumption against
negotiable instrument---Defendant was granted leave to defend the suit subject to
furnishing of surety bond---Despite extension in time, defendant failed to furnish any
surety as directed by the Court---Effect---Plaintiff, while producing promissory note and
acknowledgment of debt and undertaking of repayment had proved that the promissory
note was executed against consideration---Presumption was also in favour of negotiable
instrument that the same was made and drawn against consideration:---There was no
rebuttal to such fact, as the defendant, in spite of getting opportunity to defend the case,
had failed to file any defence---Plaintiff proved that the defendant had executed a
promissory note and had failed to repay the amount mentioned in it---Suit was decreed in
circumstances.
Naeem Iqbal v. Mst. Zarina 1996 SCMR 1530 and Haji Muhammad Siddiqiue v. Rana
Muhammad Sarwar PLD 2005 SC 322 ref.
Haji Ali Khan and Company v. Allied Bank of Pakistan Limited PLD 1995 SC 362 rel.
Yasin Azad for Plaintiff.
Page No. 1 of 5
Choudhry Abdul Rasheed for Defendant.
Date of hearing: 1st June, 2006.
JUDGMENT
NADEEM AZHAR SIDDIQI, J.---This is a suit for recovery of Rs.5,050,000 under

Order XXXVII Civil Procedure Code. The facts necessary for the disposal of the suit are
that the defendant was appointed as Special Technical and Sale Advisor on. January 12,
1998. The plaintiff during the course of employment of the defendant has from time to
time provided a sum of Rs.5,450,000 to him. The defendant supplied accessories
comprising 817 Mobile Antennae, 120 Base Antennae and 65 power Supplied to Punjab
Police at his risk and cost, which were rejected by Punjab Police. The defendant
undertook to sell the said accessories to prospective buyers at this own risk and to pay the
proceeds of sale to the plaintiff against the aforesaid debit of Rs.5,050,000. It is further
stated in the plaint that after receiving the aforesaid amount the defendant remained
absent form his duties from April 1, 1998. The defendant on June 13, 1998 executed a
Promissory Note in favour of plaintiff acknowledging his liabilities in the sum of
Rs.5,050,000 and also executed an acknowledgment on stamp paper and undertook to
repay his liabilities on or before August, 12, 1998. The services of the defendant was
terminated on June 17, 1998. The plaintiff lodged F.I.R. against, the defendant and the
defendant filed civil suits against the plaintiff.
The summons under summary chapter were served upon the defendant, who vide C.M.A.
No.6629 of 2001 applied for leave to defend the suit unconditionally. After hearing, vide
order dated 30-3-2004 conditional leave to defend the suit subject to furnishing surety
was allowed to the defendant. The defendant instead of furnishing surety filed C.M.A.
No. 2537 of 2004 seeking review of order dated 30-3-2004. The review application was
disposed of vide order dated 17-5-2004 as not pressed and two weeks time was allowed
to the defendant to furnish security. In spite of extension of time surety was not furnished
and the matter was fixed for arguments/final disposal.
Mr. Yasin Azad, learned counsel for the plaintiff has submitted that the suit is based on
negotiable instrument and the same is not disputed by the defendant. He further submits
that the defendant has confirmed his liabilities by executing acknowledgment of debt and
undertaking of repayment, which is also an undisputed document. He also refers to
section 118 of Negotiable Instruments Act and has submitted that presumption is in
favour that all the negotiable instruments were made or drawn for consideration. His
further contention is that since the defendant has failed to obtain leave to defend the suit
the contents of the plaint shall be deemed to be admitted and the plaintiff is entitled to a
decree without further proceedings.
The learned counsel for the plaintiff relied upon the following reported cases:--
(I) Naeem Iqbal v. Mst. Zarina 1996 SCMR page 1530.
(2) Haji Muhammad Siddique v. Rana Muhammad Sarwar PLD 2005 SC page 3223.
The learned counsel for the defendant Choudhary Abdul Rasheed has submitted that the
suit has been filed on the basis of a document which is not a promissory note as the same
is written on a paper having no adhesive stamps and is hit by section 11 of Stamp Act. He
further submits that in view of section 35 of the Stamp Act the document not properly
stamped is inadmissible in evidence and the judgment and decree under Order XXXVII,
C.P.C. cannot be passed. He further submits that the alleged Promissory Note at the best
can be treated as Bond and the suit has to be proceeded as a long cause suit. He relied
upon the following reported cases:--
(1) Muhammad Akram v. Khuda Bux 2000 CLC page 759.
(2) Farid Akhtar Hadi v. Muhammad Latif Qazi 1988 CLC page 2397.
In rebuttal Mr. Yasin Azad, learned counsel for the plaintiff has submitted that since the
defendant fails to obtain leave to defend the suit, the contention raised by him cannot be
considered. He further submits that affixing of adhesive stamp is not mandatory
Page No. 2 of 5
requirement of law and the Promissory Note was properly written on a proper stamp
paper and is admissible in evidence. He relied upon the following reported cases:--
(1) Muhammad Sharif v. Muhammad Hashim Paracha and another PLD 1987 Karachi
page 76.
(2) Habib Bank Limited v. Chaudhry Cloth House 1991 CLC page 164.
(3) P. Moorthy v. A.R. Kothandaraman AIR 1978 Madras page 412.
(4) Somdatta v. Abdul Rashid AIR 1968 Rejasthan page 45.
I have heard the learned counsel for the parties and perused the record.,
No-doubt the defendant has failed to obtain leave to defend the suit. However, the Court
is required to apply its mind to the facts and documents before passing any order or
judgment notwithstanding the factum that no person has appeared before it to oppose
such an order or that the person, who wanted to oppose, was not allowed to oppose
because he failed to fulfil requirement of law. The contention of Mr. Yasin Azad,
Advocate is that the contention raised by the defendant cannot be considered has no
force.
The learned counsel for the defendant has challenged the Promissory Note on the ground
that it has not been written on a paper containing adhesive stamp and referred to section
11 of the Stamp Act in support of his contention. Section 11 of Stamp Act provides use of
adhesive stamps, the same reads as under:-
"11. Use of adhesive stamps.--The following instruments may be stamped with adhesive
stamps, namely:--
(a) instruments chargeable with the duty of one anna [or half an anna], except parts of
bills of exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange and promissory notes drawn or made out of (Pakistan);
(c) entry as an Advocate, wakil or attorney on the roll of a High Court;
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other body

corporate."
From bare reading of the above provisions, it is clear that the provisions are directory and
permissive in nature and are not mandatory. The Promissory Note can be written on a
paper having adhesive stamps and can also be written on a stamp paper and only because
Promissory Note was not written on a paper having adhesive stamp does not lose its
utility as Promissory Note. In the reported case of Muhammad Sharif v.
Muhammad Hashim Paracha PLD 1987 Karachi page 76 the learned Single Bench of this
Court has held as under:
"Mr. Kanwar Mukhtar Ahmad, the learned counsel for the defendant, has specifically
referred to section 11 and contended that according to this provision of law promissory
note executed or made out of Pakistan can be stamped with adhesive stamp, but other
promissory notes made in Pakistan cannot be stamped with adhesive stamp. The
provision of section 11 is directory and permissive as the words used are that the
following instruments `may' be stamped with adhesive stamp. It does not prohibit nor
impose. restriction that promissory notes of any other value cannot be stamped with
adhesive stamp. This reasoning finds support from rule 13 read with Article 49 as
amended by the Sindh Finance Ordinance VI of 1982 which permit fixation of adhesive
stamp on promissory note even in cases where amount exceeds Rs.2,50,000."
In another reported case of Habib Bank Limited v. Chaudhry Cloth House 1991 CLC
page 164 the learned Single Bench of this Court has held as under:---
Page No. 3 of 5
"The expression used in rule 13 of the Rules is `may'. The rule is merely a permissive
one, permitting the use of adhesive stamp on promissory notes payable on demand when
the amount in any other case is rupees ten. The rule does not lay down that such
promissory note shall be stamped with adhesive stamp of the requisite value. The result is
that a promissory note in any other case can be written on a paper having an impressed
stamp or it can be stamped with special adhesive stamps of the requisite value. In my
view a promissory note can be stamped either with special adhesive stamps or adhesive
stamps or engraved on a stamp paper of proper value."
The judgment reported in case of Muhammad Akram v. Khuda Bux 2000 CLC page 759
dealt with a situation where document affixed with adhesive stamps were not properly
cancelled and was rendered inadmissible in evidence and is not applicable to the present
case.
The other reported case of Farid Akhtar Hadi v. Muhammad Latif Qazi 1988 CLC page
2397 was dealt with a case of grant of leave on the ground that the document on the basis
of which the suit was 'instituted was not a promissory note, but was a bond, and as such,
the suit was not maintainable and leave to defend was granted, which was challenged in
the revision.
The Indian views expressed in the above mentioned reported cases are that in view of
word `may' used in section 11 and rule 14 the c promissory note of any value can always
be written on impressed stamp paper and can be stamped with adhesive stamps.
In view of the above reported judgment, it is clear that it is not necessary that the
Promissory Note must be affixed with adhesive stamp and a Promissory Note written on
a stamp paper is as good as written on a paper containing adhesive stamps.
As far as section 35 of the Stamp Act is concerned, the same shall only be pressed into
service when an instrument not duly stamped is produced in evidence. In this case since I
have already held that the promissory note is properly stamped. Section 35 is not
applicable.
Since the suit has been filed under summary chapter of the Civil Procedure Code, the
Order XXXVII sub-rule (2) of rule 2 provides that where the defendant fails to appear or
obtain leave to defend or fulfil the conditions on which the leave was granted, the
contents of the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a
decree. The plaintiff while producing the promissory note and acknowledgment of debt
and undertaking of repayment has proved that the promissory note was executed against
consideration. The presumption is also in favour of the negotiable instrument that the
same was made and drawn against consideration. There is no rebuttal to the above facts,
as the defendant, in spite of getting opportunity to defend the case, has failed to file any
defence.
In the reported case of Haji Ali Khan and Company v. Allied Bank of Pakistan Limited
PLD 1995 Supreme Court page 362 the Honourable Supreme Court has held as under:--
"It may also be noticed that sub-rule (2) of Rule 2 of the above Order envisages that if a
suit is filed in terms of sub-rule (1), the defendant shall not appear or defend the suit
unless he obtains leave from a Judge as hereinafter provided so to appear and defend. It
further contemplates that in default of his obtaining such leave or of his appearance and
defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted
and the plaintiff shall be entitled to a decree in terms of sub-clauses (a), (b) and (c)
provided in aforesaid sub-rule (2). Whereas, sub-rule (3) thereof lays down that a decree
passed under the above rule may be executed forthwith."
In the same judgment the Honourable Supreme Court after considering number of
reported cases has held as under:
"The ratio decidendi of the above-referred cases seems to be that if a defendant fails to
appear or fails to obtain leave to defend in response to a summons served in Form No.4
provided in Appendix B to the C.P.C. or fails to fulfil the condition on which leave was
granted or where the Court refuses to grant leave, the Court is to pass a decree. It may
Page No. 4 of 5
further be observed that in sub-rule (2) of rule 2, C.P.C., it has been provided that if a
defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall
'be deemed to be admitted and the plaintiff shall be entitled to a decree, but no such
consequences are provided for in Rule 3 of the above Order in a case where the Court
refuses to grant leave or the defendant fails to fulfil the condition on which leave was
granted. In our view, notwithstanding the above omission in Rule 3, the effect of refusal
of the Court to grant leave to failure on the part of the defendant to comply with the
condition of the leave, will be the same i.e. the defendant shall not be entitled to defend
the suit on any ground and the Court would pass a decree in favour of the plaintiff."
In view of the above, the plaintiff has proved that the defendant has executed a
promissory note and has failed to repay the amount mentioned in the promissory note. I
have, therefore, no option but to decree the suit of the plaintiff in the sum of Rs.5,050,000
with interest at the rate of 6% from the date of the suit till realization of the amount. The
defendant is also liable to pay the costs of the suit to the plaintiff. The office is directed to
prepare the decree in the above terms
M.H./B-13/K Suit decreed.
Page No. 5 of 5
2005 S C M R 1643
[Supreme Court of Pakistan]
Present: Iftikhar Muhammad Chaudhry and Falak Sher, JJ
Messrs RASU FOOD INDUSTRIES and another---Petitioners
Versus
Messrs PAKISTAN INDUSTRIAL LEASING COOPERATION LIMITED and others---

Respondents
Civil Petition No.2555-L of 2002, decided on 30th July, 2004.
(On appeal against the judgment dated 16-5-2002 passed by the Lahore High Court,
Lahore in F.A.O. No.281 of 2001).
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---
----Ss. 9, 10, 19 & 22---Civil Procedure Code (V of 1908), O.XXI, R.90---Suit for
recovery of Bank loan---Execution proceedings---Suit filed by Bank against petitioner
having been decreed, Bank resorted to execution proceedings for the recovery of decretal
amount and during process of said proceedings, orders for auction of property owned by
petitioners were passed---Application filed by petitioners under O. XXI, R.90, C.P.C.
against auction order was finally dismissed by High Court vide impugned order---
Impugned order was conditional order as under said order petitioners were required to
deposit decretal amount before Banking Court within a period of one month, but they
failed to do so, with the result that sale of house in favour of auction-purchaser was
confirmed and certificate of sale was issued and since then property had changed three
hands---As process of selling property to satisfy decree had gone a long way, no relief
could be granted to petitioners.
Iftikhar Ullah Malik, Advocate Supreme Court and Mahmud-ul-Islam, Advocate-on-

Record for Petitioners.
Ali Akbar Qureshi, Advocate Supreme Court and Sh. Salah-ud-Din, Advocate-on-Record
for Respondents.
Date of hearing: 30th July, 2004.
ORDER
IFTIKHAR MUHAMMAD CHAUDHRY, J.-------This petition for leave to appeal has

been filed against the judgment dated 16th May, 2002 passed by the Lahore High Court,
Lahore whereby F.A.O. filed by the petitioner has been dismissed by means of impugned
judgment.
2. Precisely stating the facts of the case are respondent No.1 filed a suit for recovery of
Rs.6,78,556 before the Banking Court against the petitioners as they failed to return the
amount of the Bank. Petitioners were given an opportunity of hearing and the Banking
Court ultimately did not allow them permission to leave to defend the suit and passed a
decree in favour of respondent-Bank. The Bank then resorted to execution proceedings
for the recovery of the decretal amount and during the process of these proceedings the
orders for auction of the property owned by the petitioners were passed. Petitioners,
challenged the orders of auction of property before the trial Court through an application
under Order XXI, rule 90, C.P.C. However, the said application was ultimately dismissed
by the trial Court. F.A.O. filed by the petitioner was also dismissed by means of
impugned judgment. As such instant petition for leave to appeal has been filed.
3. Learned counsel contended that now the petitioners are ready to deposit 15% of the
auction amount, in view of the compromise, arrived at between the parties, in pursuance
whereof Writ Petition No.21894 of 1999 was disposed of vide order dated 10th April,
2001.
Page No. 1 of 2
4. The contention so raised by the learned counsel has no substance. As a careful perusal
of order of disposing of writ petition vide order dated 10th April, 2001, clearly indicates
that it was conditional order as petitioners were required to deposit decretal amount
before the Banking Court within a period of one month, but admittedly they failed to do
so, with the result that sale of the house in favour of auction-purchaser was confirmed
and certificate of sale was issued. It is important to note that by the time the property has
changed three hands as respondent No.2 sold the house to respondent No.3 from whom
respondent No.4 has purchased the same. As the process of selling the property to satisfy
the decree has gone much ahead, therefore, no relief at this stage can be granted to the
petitioners.
5. No other point was argued by the learned counsel for the petitioners.
Thus, for the foregoing reasons petition is dismissed and leave declined.
Leave to appeal declined.
H.B.T./R-26/S Petition dismissed.
***
Page No. 2 of 2
2004 M L D 414
[Lahore]
Before Syed Zahid Hussain, J
SAOOD AHMAD---Petitioner
Versus
TANVIR AHMAD---Respondent
Civil Revision No.2066 of 2003, heard on 3rd December, 2003.
Civil Procedure Code (V of 1908)---
----O.XXXVII, Rr.2, 3 & O.VIII, R.10 ---Suit for recovery of amount on basis of
promissory note---Non-filing of written statement---Closing of defence of
defendant---Leave to appear and defend suit was granted to defendant subject to
furnishing surety bond, but, defendant, despite various adjournments, failed to comply
with the order of Court and also failed to file written statement---Effect---Defendant
neither complied with the conditional order granting leave to appear and defend the suit
nor order for the payment of costs subject to which ex parte proceedings were recalled by
the Court---Even written statement was not filed despite' direction contained in the final
order---Such indolence and laxity on part of defendant would hardly entitle him to any
further indulgence in the matter, especially when suit was of a summary nature
envisaging special procedure for expeditious disposal thereof---Defence of defendant, in
circumstances was rightly closed for non-compliance of order of Court and for
non-filing of written statement despite obtaining several adjournments---Order of court
below could not be interfered with by High Court in exercise of its revisional jurisdiction.
Col. (Retd.) Ayub Ali Rana v. Dr. Carlite Pune and another PLD 2002 SC 630; Zahoor
Ahmad v. Mehra through Legal Heirs and others 1999 SCMR 105; Haji Rais Ahmed v.
Aslam 1991 CLC 602 and Haji Muhammad Siddique v. Rana Muhammad Sarwar 2003
CLD 1003 ref.
Abdul Wahid Ch. for Petitioner
Mian Muhammad Javed Munawar for Respondent.
Date of hearing: 3rd December, 2003.
JUDGMENT
By order dated 6-11-2003 the trial Court proceeded to close the defence of the petitioner
for non-compliance of order and non-filing of written statement. The same has been
assailed through this revision petition.
2. It is contended by the learned counsel that since there was no specific direction on the
preceding date i.e. 4-11-2003 for filing of the written statement, no such penal order
could be passed. It is further contended that the law favours adjudication on merits, the
order impugned should be set aside being illegal and unlawful. Reference in this context
has been made to Col. (Retd.) Ayub Ali Rana v. Dr. Carlite Pune and another (PLD 2002
SC 630), Zahoor Ahmad v. Mehra through legal heirs and others (1999 SCMR 105) and
Haji Rais Ahmed v. Aslam (1991 CLC 602). The learned counsel for the
respondent/plaintiff has with reference to the proceedings in the suit, contended that
although leave to appear and defend the suit was granted by the Court subject to
furnishing surety bond to the satisfaction of the Court, yet the said order remained un
complied with despite adjournments granted to the petitioner and that even the costs
subject to which the ex parte order was recalled, had not been paid by the petitioner. It is
further contended that the petitioner does not deserve any further indulgence in the
matter. He has placed reliance upon Haji Muhammad Siddique v. Rana Muhammad
Sarwar (2003 CLD 1003).
Page No. 1 of 2
3. It was suit under Order XXXVII C.P.C. for the recovery of a stated amount on the
basis of promissory note in which the petitioner sought leave to appear and defend, which
was granted on 7-6-2003 subject to furnishing surety bond to the satisfaction of the
Court, for which purpose the suit was adjourned to 30-6-2003 and the filing of written
statement. The perusal of the order-sheet, copy whereof has been placed on the record,
shows that thereafter the suit was adjourned either on the ground that there was some
compromise being negotiated between the parties or some other reasons. On 4-9-2003
the petitioner was proceeded against ex parte and the suit was adjourned for ex parte
evidence. On 20-9-2003 an application was filed by the petitioner for setting aside of the
ex parte proceed inks, which application was allowed by the learned Additional District
Judge, Faislabad on 21-10-2003 subject to payment of costs of Rs.100. On that date the
petitioner was "directed to submit written statement and surety bonds on 4-11-2003." On
the adjourned date i.e. 4-11-2003 written statement was not filed and the suit was
adjourned to 6-11-2003 for making up deficiency in the surety. On 6-11-2003, it appears
that on the first call counsel for the parties appeared when it was stated before the Court
that the written statement was not ready and time was sought. The case was thus kept in
waiting which was taken up at about 1:30 p.m. when the petitioner/defendant himself
appeared and stated that the written statement was not ready and asked for adjournment.
The Court then appears to have taken account of the previous proceedings in the suit and
noting the defaults on the part of the petitioner/defendant proceeded to close his defence.
The perusal of the order-sheet is indicative of the fact that neither the conditional order
dated 7-6-2001 granting leave to appear and defend had been complied with, despite
indulgence shown by the Court nor the order for payment of costs subject to which ex
parte proceedings were recalled by the Court on 21-10-2003, was complied with. Even
the written statement was not filed despite direction contained in order dated
21-10-2003. Such indolence and laxity on the part of the petitioner hardly entitled him to
any further indulgence in the matter. Suffice it to state that this was a summary suit under
Order XXXVII C.P.C. envisaging special procedure for expeditious disposal of the
matter. The assertion made by the learned counsel for the petitioner that the son of
counsel for the petitioner since had met with an accident, the written statement, therefore,
could not be prepared, has been vehemently controverted by the learned counsel for the
respondent who practises at Faisalabad and states that no such incident had taken place
and an incorrect/false stance is being taken to mislead the Court. Be that as it may, on
consideration of the proceedings that have taken place since after the grant of leave to
appear and defend to the petitioner a clear impression is discernible that dilatory tactics
were being adopted by the petitioner to somehow prolong the proceedings and failed not
only to comply with the Court's order but also availing the indulgence shown to him.
Reliance upon the precedents cited by the learned counsel for the petitioner is inapt and
misplaced in view of the peculiar facts and circumstances of the case, as noted above. It
may be observed that the judgment in Col. (Retd.) Ayub Ali Rana case (supra), in which
previous precedents have been noted and considered, arose of a suit for recovery of
damages whereas in the instant case it was a suit under order XXXVII C.P.C., the
distinguishing features are thus quite obvious.
In view of the above, I find that no such illegality or material irregularity has been
committed by the trial Court which could warrant interference by this Court under section
115 C.P.C. The revision petition, therefore, is dismissed. No order as to costs.
H.B.T./S-806/L Revision dismissed.
Page No. 2 of 2
2004 C L C 389
[Lahore]
Before Ch. Ijaz Ahmad and Farrukh Lateef, JJ
MUHAMMAD ISMAIL ---Appellant
Versus
Syed INTIZAR ABBAS ZAIDI---Respondent
Regular First Appeals Nos. 144 and 145 of 2002, heard on 29th July, 2003.
----O.XXXVII, Rr.2 & 3---Suit for recovery of amount on basis of

pronote---Application for leave to defend suit---Application filed by defendant for
leave to defend suit was granted by Court conditionally subject to furnishing of adequate
surety bonds up to specified date, but defendant failed to furnish the same as per order of
Court and application of defendant for extension of time for furnishing surety bonds was
dismissed and suit was decreed---Validity---Court was justified not to extend the time
in view of vague grounds taken by defendant in his application for extension of
time---Where the party had been very negligent and had completely failed to provide
any excuse for his default, discretion could not be exercised in favour of such
party---Where grounds mentioned in application for extension of time were absolutely
vague, those were not sufficient for exercise of any discretion in favour of
applicant/defendant---Order of Trial Court not suffering from any infirmity or illegality,
could not be interfered with in appeal.
Malik Hayat Ullah and others v. Murad Ali Khan PLD 1972 SC 69; Jahandad Khan v.
Muhammad Arif Khan 1991 MLD 2109; Saad Ullah Khan and 2 others v. Sh. Ghulam
Qasim PLD 2001 Pesh. 47; Industrial, Development Bank of Pakistan v. Ironite
Industries (Pvt.) Limited and 9 others 1991 CLC 438; Aftab Iqbal Khichi v. Messrs
United Distributors Pakistan Limited 1999 SCMR 1326; Re: Synthetic Chemicals
Company Ltd. PLD 1988 Kar. 429 and Saeed Ahmad and others v. Karam Singh and
another PLD 1949 Lah. 380 ref.
Maulvi Sultan Alam for Appellant.
Ch. Habib Ullah Nehang for Respondent.
JUDGMENT
CH. IJAZ AHMAD, J. --We intend to decide following regular first appeals by one
consolidated judgment having similar facts and law:--
Regular First Appeal No.144 of 2002.
Regular First Appeal No.145 of 2002.
2. Brief facts out of which the aforesaid appeals arise are that respondents/plaintiffs filed
two suits for recovery of Rs.8,00,000 and Rs,15,00,000 before the District Judge, Multan
under Order XXXVII, C.P.C. on 17-4-2001 respectively. Appellants filed applications
for leave to defend before the District Judge on 8-9-2001. The learned District Judge
granted conditional-leave to defend the suits subject to furnishing of adequate surety
bonds till 11-1-2002 vide order dated 3-1-2002. Appellants failed to furnish adequate
surety till 11-1-2002. Appellants filed applications before the learned District Judge,
Multan for extension of 3/4 days for furnishing of the surety bonds in both the cases on
11-1-2002. The learned District Judge dismissed the applications of the petitioners vide
orders dated 26-2-2002 and decreed the suits of the respondents vide orders dated
26-2-2002. Appellants being aggrieved filed the aforesaid appeals.
Page No. 1 of 2
3. The learned counsel of the appellants submits that the learned District Judge decreed
the suits against the appellants on technical ground which is not in accordance with the
principle of administration of justice. He further submits that learned District Judge
passed the impugned orders without applying his judicious mind. He further urged that
impugned orders are not in accordance with law laid down by the superior Courts. In
support of his contention he relied upon the following judgments:--
Malik Hayat Ullah and others v. Murad Ali Khan PLD 1972 SC 69; Jahandad Khan v.
Muhammad Arif Khan 1991 MLD 2109 and Saad Ullah Khan and 2 others v. Sh. Ghulam
Qasim PLD 2001 Peshawar 47.
4. The learned counsel of the respondents submits that the learned trial Court granted
three opportunities to the appellants to comply the order dated 11-1-2002 as is evident
from the orders of the learned trial Court dated 6-2-2002, 11-2-2002 and 15-2-2002
respectively. He further submits that respondents/plaintiffs had filed suits against the
appellants under Order XXXVII, C.P.C. on the basis of pronote executed by the
appellants. Therefore, the learned District Judge was justified to dismiss the applications
for extension of time of the appellants vide impugned orders dated 26-2-2002. He further
urged that section 148, C.P.C. is not applicable in the present cases. He further submits
that the orders of the learned trial Court are in accordance with the law laid down by the
superior Courts. In support of his contention, he relied upon the following judgments.
Industrial Development Bank of Pakistan v. Ironite Industries (Pvt.) Limited and 9 others
1991 CLC 438 and Aftab Iqbal Khichi v. Messrs United Distributors Pakistan Limited
1999 SCMR 1326.
5. We have considered the contentions of the learned counsel of the parties and perused
the record ourselves.
6. It is better and appropriate to reproduce relevant paragraph of the applications of the

appellants for extension of time to resolve the controversy between the parties:--
It is pertinent to mention here that the appellants did not attach a single document in
support of para. 2 of the applications. It is settled principle of law where grounds
mentioned in application for extension of time were absolutely vague, they were held to
be not sufficient for exercise of any discretion in favour of the applicant as the law laid
down in re: Synthetic Chemicals Company Ltd. PLD 1988 Karachi 429. It is also settled
principle of law where the party had plainly been very, negligent and he had completely
failed to provide any excuse for his default, discretion was not exercised in favour of such
party as the law A laid down by this Court in Saeed Ahmad and others v. Karam Singh
and Mst. Jawala Devi PLD 1949 Lah. 380. It is also admitted fact that the appellants were
granted time to furnish surety bonds till 11-1-2002 vide order dated 3-1-2002 but the
appellants did not file applications for extension of, time before 11-1-2002. It is also
admitted fact that the appellants did not furnish surety bonds alongwith the applications
filed by the appellants for extension of time. It is also admitted fact that the
respondents/plaintiffs filed suits under Order XXXVII, C.P.C., therefore, the learned trial
Court was justified not to extend the time in view of vague grounds taken by the
appellants in their applications which is in accordance with the law laid down by the
Honourable Supreme Court in Aftab Iqbal Khichi's case (supra).
7. In view of what has been stated above, we do not find any infirmity or illegality in the
impugned orders of the learned trial Court. Therefore, the appeals have no merits and the
same are dismissed.
H. B.T./M-2354/L Appeals dismissed.
Page No. 2 of 2
Before Shabbir Ahmad and Khilji Arif Hussain, JJ
ABDUL MALIK K. LAKHA through Legal Heirs---Appellants
Versus
ABDUL KARIM K. KARA---Respondent
High Court Appeal No. 130 of 2002, decided on 22nd April, 2004.
(a) Stamp Act (II of 1899)---
---Ss. 3 & 19---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1 & 2---Foreign
bill---Affixing of stamp duty---Principle---Suit for recovery of amount was filed on
the basis of negotiable instrument executed outside Pakistan---Objection was raised that
the bill had not beer, stamped by the plaintiff---Validity---Such bill required stamp duty
under S.3 of Stamp Act, 1899, before it was accepted or presented for acceptance or
payment or endorsed, transferred or otherwise negotiated in Pakistan---Whereas S.19 of
Stamp Act, 1899, required that the first holder in Pakistan of any bill of exchange payable
otherwise than on demand, or promissory note (foreign bills) to be stamped by duty,
before the same was presented for acceptance, payment or endorsed, transferred or
otherwise negotiated in Pakistan---Both were charging sections, in first event, the
promisee before the promissory note was presented for acceptance, payment, or endorses,
transfers or otherwise negotiated and in the later case by first holder in
Pakistan---Plaintiff had not endorsed, transferred or otherwise negotiated the promissory
note sued upon before presenting the same in Trial Court, the obligation to affix stamp
had not arisen---Objection was repelled in circumstances.
(b) Civil Procedure Code (V of 1908)-----
----O. XXXVII, R.3---Leave to appear and defend the suit---Conditional order

--Triable issue---Plaintiff, on the basis of foreign bill, filed suit for recovery of amount
mentioned in the promissory note---High Court allowed the application for leave to
defend the suit with the condition to deposit security in a sum of US $ 510,000,00---Plea
raised by the defendants was that the promissory note was executed by undue influence
and another suit was already pending adjudication against the plaintiff covering the same
cause of action---Validity---Such plea was a triable issue and defendants were entitled
for leave to defend the suit unconditionally---Although the affidavit filed with the
application for leave to defend did not positively and immediately make it clear that the
defendants had a defence, yet the same showed such state of facts as led to the inference
that at the trial of the action the defendants might be able to establish a defence to the
plaintiff's claim---Plaintiff was not entitled to judgment and the defendants were entitled
to leave to defend but in such a case the Court might, in its discretion, impose conditions
as to the time or mode of trial but not as to payment into Court or furnishing
security---Order of depositing the security was set aside by Division Bench of High
Court ---Intra-Court Appeal was allowed accordingly.
Messrs Mechalee Engineers and Manufacturers v. Messrs Basis Equipment Corporation

AIR 1977 SC 577 fol.
Ramsing alias Ramlal v. Parumal and another IX SLR 150; R. Kannusamy v. V.V.K.
Samy & Co. Singapore and others AIR 1988 Mad. 336; Sint. Kiranmoyee Dassi v. Dr. J.
Chatterjee (1945) 49 Cal. WN 246 and Fine Textile Mills Ltd. v. Haji Umar PLD 1963
SC 163 ref.
Arshad Tayebally for Appellants.
Ali Mumtaz Sheikh for Respondent.
Dates of hearing: 6th and 14th April, 2004.
ORDER
Page No. 1 of 6
SHABBIR AHMED, J.---The appellants have impugned the order dated 19-4-2002
passed by the learned Single Judge in Suit No.804 of 1996, whereby leave to defend the
Suit No.804 of 1996 filed by the respondent against the appellants, was granted to them
subject to the security in the sum of US $ 510,000,00 with Nazir of this Court within a
period of one month from the date of order.
The present appeal emanates in the following circumstances.
The respondent filed suit against Abdul Malik K. Lakha who died during the pendency of
the suit and his legal heirs, the appellants were brought on record. The case of the
respondent in short was that Abdul Malik K. Lakha acknowledged his liability and
executed promissory notes detailed in para. 1 of the order. The amount under promissory
note were payable at Karachi. The defendant failed to pay the amount in spite of legal
notice. Hence the suit was filed.
On service of summons; Abdul Malik K. Lakha (now deceased) filed application for
leave to defend raising inter alia, following grounds:
(1) That the claim of the respondent is barred by time.
(2) That the promissory notes are sufficiently stamped.
(3) That the promissory notes were obtained under duress.
The learned Single Judge after hearing the learned counsel for the parties, granted leave
to defend the suit as stated hereinabove subject to the condition. Hence the present
appeal.
We have heard Mr. Arshad Tayabally, learned counsel for the appellants and Mr. Ali
Mumtaz Shaikh, learned counsel for the Respondent.
Learned counsel for the appellants has taken almost the same grounds in support of the
appeal taken by them in leave to defend application. His first contention was that the
claim of the respondent was barred by time. As such, the promissory notes cannot be
enforced which were executed after the expiry of period of limitation and cannot be
treated as acknowledgement of debt in terms of the section 19 of the Limitation Act. The
contention of the learned counsel for the appellants is devoid of any substance. Section
25(3) of the Contract Act is complete reply to the submission made by the learned
counsel. Section 25 thereof makes the agreement without consideration void, unless it is
in writing and registered, or is a promise to compensate for something done, or is a
promise to pay a debt barred by limitation law. An agreement made without consideration
is void unless---
(1) __________________
(2) __________________
(3) It is promise, made in writing and signed by the person to be charged therewith, or by
his agent generally or specially authorized in that behalf, to pay wholly or in part a debt
of which the creditor might have enforced payment but for the law for the limitation of
suits. Such an agreement is a contract.
Next contention of the learned counsel for the appellants was that the instruments sued
upon have been executed outside Pakistan and are payable otherwise than on demand and
that they should be properly stamped as promissory notes as defined in section 2(22) of
the Stamp Act and cannot be admitted in evidence without being properly stamped under
Article 49(b) of the Stamp Act.
On the other hand, learned counsel for the respondent submitted that the instruments were
executed outside Pakistan and the promisee himself has instituted the suit for recovery of
the amount due under the instruments, there is no need for stamping the instruments in
accordance with the Stamp Act in view of section 18 of the Stamp Act.
Page No. 2 of 6
There is no dispute that the instruments sued upon were executed outside Pakistan and
are un-stamped. The instruments are the foreign bills, under the terms of the instruments
sued upon, the amounts were payable on or, before the dates specified therein. This,
according to the learned counsel for the appellants, would make the instrument, payable
otherwise than on demand requiring stamping, under Article 49(b) of the Stamp Act. In
order to examine the contentions, reference to sections 3, 18 and 19 of the Stamp Act are
necessary, which are contained in Chapter II, A and C thereof, these sections read as
follows:--
"3. Subject to the provisions of this Act and the exemptions contained in Schedule I, the
following instruments shall be chargeable with duty of the amount indicated in that
Schedule as the proper duty therefor respectively, that is to say---
(a) ______________________________
(b) every bill of exchange payable otherwise than on demand, or promissory note drawn
or made out of Pakistan on or after that day and accepted or paid, or presented for
acceptance or payment, or endorsed, transferred or otherwise negotiated, in Pakistan; and
(c) _______________________________
18. (1) Every instrument chargeable with duty executed only out of Pakistan, and not
being a bill of exchange or promissory note, may be stamped within three months after it
has beet- first received in Pakistan.
(2) Where any such instrument cannot, with reference to the description of stamp
prescribed therefore, be duly stamped by a private person, it may be taken within the said
period of three months to the Collector, who shall stamp the same, in such manner as the
State Government may by rule prescribe, with a stamp of such value as the person so
taking such instrument may require and pay for. .
19. The first holder in Pakistan of any bill of exchange payable otherwise than on
demand, or promissory note drawn or made out of Pakistan shall, before he presents the
same for acceptance or payment or endorses, transfers or otherwise negotiates the same in
Pakistan, and affix thereto the proper stamp and cancel the same;
Provided that,--
(a) If, at the time any such bill of exchange, or note comes into the hands of any holder
thereof in Pakistan, the proper adhesive stamp is affixed thereto and cancelled in manner
prescribed by section 12 and such holder has no reason to believe that such stamp was
affixed or cancelled otherwise than by the person and at the time required by this Act,
such stamp shall, so far as relates to such holder, be deemed to have been duly affixed
and cancelled;
(b) nothing contained in this proviso shall relieve any person from any penalty incurred
by him for omitting to affix or cancel a stamp."
The perusal of the aforesaid provisions would show that every bill of exchange payable
otherwise than on demand, or promissory note drawn or made out of Pakistan on or after
that day and accepted or paid, or presented for acceptance or payment, or endorsed,
transferred or otherwise negotiated in Pakistan shall be charged with duty of the amount
indicated in the Schedule. Therefore, the foreign bill is subject to duty before its
acceptance, payment or presented for acceptance or payment or endorsed, transferred or
otherwise negotiated in Pakistan. Likewise, section 18 refers the every instrument
chargeable with duty executed out of Pakistan, to be stamped within three months of its
receipt in Pakistan, excluding bill of exchange, promissory notes, payable on demand or
otherwise.
Likewise section 19 requires that the first holder in Pakistan of any bill of exchange
payable otherwise than on demand or promissory note drawn or made out of Pakistan
subject to the duty before the holder presents the bill for acceptance or payment or
endorses, transfers or otherwise negotiates the same in Pakistan and affix thereto the
proper stamp and cancel the same.
Page No. 3 of 6
The reading of section 3 would show that a foreign bill requires stamp duty before it is
accepted or presented for acceptance or payment or endorses, transfers or otherwise
negotiates in Pakistan. Whereas section 19 requires that the first holder in Pakistan of any
bill of exchange payable otherwise than on demand, or promissory note (foreign bills) to
be stamped by duty, before the same is presented for acceptance, payment or endorses,
transfers or otherwise negotiates the same in Pakistan. Both are charging sections, in first
event, the promisee before the promissory note is presented for acceptance, payment,
endorses, transfers or otherwise negotiates and in later case by first holder in Pakistan.
Similar question came for consideration before the Division Bench of Erstwhile Judicial
Commissioner Court of Sindh in Ramsing alias Ramlal v. Parumal and another IX SLR
150. The facts of the case were that the plaintiff sued the defendants for recovery of the
lent value to defendant in Russian territory alleging that at the time of transaction `the
defendant No. 1 had given him a writing in his books to the following effect.
An account opened by Paman Khialdasani Makhija with Bhai Ramlal Bagsingani

Makhija at Kashgar Khatai Territory in Sambat 1964.
Credit
Debit
4000 Miti Akhtar sud Sambat 1964 Russian Gold Sumbhs agreed to be paid with interest
at the rate of 0-8-0 as per cent at Shikarpur-Handwriting of Paman Makhija.
The defendants pleaded inter alia that the Lekho was a promissory note and as such
inadmissible in evidence. The District Judge held that the Lekho was a promissory note
and as such inadmissible in evidence, and further, that the plaintiffs had failed to prove
the loan and dismissed the suit. The Division Bench ruled as follows:--
"I have come to the conclusion that the entry in plaintiff's book is a pro note and that the
suit is and must be based on it I do not think the lower Court was right in thinking that it
was chargeable with duty and excluding it from evidence for want of stamp. The pro note
was made out of India and duty is only chargeable under sections 3 and 19 only when the
note is presented, paid or negotiated in British India. As none of these events have
happened no duty is chargeable on the note and it is therefore not excluded by section 35.
This was so decided in the similar case of Mahomed Rowthan v. Mahomed Husin Rothan
(I); Mr. Dipchand appears to argue that it was the duty of the plaintiff to present the note
for payment. But section 64 of the Negotiable Instruments Act makes presentment a
necessary condition only when it is sought to make liable parties other than the maker.
The maker is the principal debtor and he is liable to the holder irrespective of
presentment Ardeshir Sorabshah v. Khusaldas (2)."
Similar question came for consideration before the learned Single Judge of the Madras
High Court in R. Kannusamy v. V.V.K. Samy & Co. Singapore and others AIR. 1988
Madras 336. The observations are as follows:--
It is not disputed that in this case the promisee himself had instituted the suit and. that
there is no endorsement, transfer or negotiation by the respondent and the occasion for
affixing proper stamps and their cancellation did not arise and therefore, the objection
regarding the inadmissibility of the promissory note in evidence was rightly overruled by
the Court below."
In the instant case, there is no dispute that the instruments sued upon were executed
outside Pakistan. Sections 3 and 19 would be attracted when it is presented for payment,
endorsed or transferred or otherwise negotiated. The respondent has not endorsed,
transferred or otherwise negotiated the promissory notes sued upon before presenting the
instruments in Court, the obligation to affix stamp had not arisen. Therefore, this
contention is also not tenable.
The last contention raised was that the appellants have shown a triable issue in their
favour and the learned Judge erred in granting the conditional leave. His further
submission was that the appellant is entitled for unconditional leave to defend in suit.
Page No. 4 of 6
Learned counsel for the respondent vehemently contended that the execution of
promissory notes were not denied. In such circumstances, the learned Judge has shown
indulgence by granting leave otherwise it was not a case for grant of leave and rightly
conditioned with security.
In the instant case, the signing of promissory notes in the circumstances narrated in the
supporting affidavit is admitted but simultaneously it has been pleaded that the
promissory notes were obtained under duress raises a triable issue indicating that it is fair,
bona fide, and reasonable defence, in such circumstances, the respondent is not entitled to
leave to sign the judgment and the appellant is entitled to unconditional leave to defend. .
In Messrs Mechalee Engineers and Manufacturers v. Messrs Basis Basis Equipment

Corporation AIR 1977 Supreme Court 577, the principle for the grant of leave in cases
covered by Order XXXVII, C.P.C. illustrated in Smt. Kiranmoyee Dassi v. Dr. J.
Chatterjee (1945) 49 Cal. WN 246 at page 253, authored by Das, J., was approved and
the following principles were laid down for grant of leave to defend the suit:---
"(a) if the defendant satisfies the Court that he has a good defence to the claim on its
merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled
to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or
reasonable defence although not a positively good defence the plaintiff is not entitled to
sign judgment and the defendant is entitled to unconditional leave to defend.
(c) if the defendant discloses such facts as may be deemed sufficient to entitle him to
defend, that is to say, although the affidavit does not positively and immediately make it
clear that he has a defence, yet, shows such a state of facts as leads to the inference that at
the trial of the action he may be able to establish a defence to the plaintiffs claim the
plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in
such a case the Court may in its discretion impose conditions as to the time or mode of
trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defence or the defence set up is illusory or sham or practically
moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the
defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically
moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the
Court may protect the plaintiff by only allowing the defence to proceed if the amount
claimed is paid into Court or otherwise secured and give leave to the defendant on such
condition and thereby show mercy to the defendant by enabling him to try to prove a
defence.
Similar view was taken in Fine Textile Mills Ltd. v. Haji Umar PLD 1963 SC 163, the
leave was granted with the observations that in a case, of this nature where the defendant
discloses upon his affidavit facts which may constitute a plausible defence or even show
that there is some substantial question of fact or law which needs to be tried or
investigated into, then he is entitled to leave to defend. What is more is that even if the
defence set up be vague or unsatisfactory or there be a doubt as to its genuineness, 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.
In the instant case, the plea of undue influence has been raised, which is triable issue,
secondly, a suit already pending adjudication, filed by the appellants against the
respondent covering the same cause.
In these circumstances, we are of the view that the appellants are entitled for leave to
defend the suit unconditionally. Their case is covered under clause 3 of judgment. Messrs
Mechalee Engineers and Manufacturers (supra) where the defendant discloses such fact
as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit
does not positively and immediately make it clear that he had 4 defence, yet, shows such
a state of facts as leads to the inference that at the trial of the action he may be able to
Page No. 5 of 6
establish a defence to the plaintiffs claim the plaintiff is not entitled to judgment and the
defendant is entitled to leave to defend but in such a case the Court may in its discretion
impose conditions as to tile time of mode of trial but not as to payment into Court or
furnishing security. Therefore, the appeal is allowed arid the appellants are allowed to
defend the suit unconditionally.
Since it is short cause, it is expected that the learned Single Judge will decide the case as
expeditiously as possible and the parties are directed not to seek unnecessary
adjournments.
With the above observations, the appeal stands disposed of.
M.H./A-42/K Appeal allowed.
Page No. 6 of 6
Citation Name : 2004 PLC 366 KARACHI-HIGH-COURT-SINDH
Side Appellant : GHANSHAMDAS
Side Opponent : PRESIDING OFFICER, SINDH LABOUR COURT NO. VIII
LARKANA and another
----Once the court had passed an order, the conditional ties attached to
such order were to be satisfied by concerned party without admitting an element of doubt,
failing which consequences would follow inevitably.
Page No. 1 of 4
2003 C L D 1003
[Lahore]
Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ
Haji MUHAMMAD SIDDIQUE---Appellant
Versus
Rana MUHAMMAD SARWAR---Respondent
Regular First Appeal No.701 of 2001, heard on 3rd June, 2002.
----S.148, O. VIII, R.10 & O.XXXVII, Rr.2, 3---Suit for recovery of amount on basis of
Pronote---Application to defend suit--On statement of plaintiff that he had no objection if
application of defendant to appear and defend suit was accepted, Trial Court accepted
application of defendant subject to furnishing security equal to suit amount until next date
of hearing---Defendant despite several adjournments neither had submitted surety bond
nor had filed written statement and Trial Court decreed the suit filed by plaintiff against
defendant---Since order to accept application for leave to defend suit was conditional and
condition therein having not been complied with despite several adjournments, Trial
Court had rightly proceeded to decree suit filed by plaintiff--- Order VIII, R.10, C.P.C.
had empowered the Court to pronounce judgment against defendant or make such order
in relation to suit as it would think fit where party would fail to file written statement
within time fixed by the Court---Rule 10 of O.VIII, C.P.C. being penal in nature it was
within discretion of the Court to pronounce judgment even without recording evidence---
Judgment and decree passed by Trial Court could not be interfered with in circumstances.
Siddiq Khan and 2 others v. Abdul Shakur Khan and another PLD 1984 SC 289: Sh.
Abdus Saboor and Brothers v. Ganesh Flour Mills Ltd. PLD 1967 Lah. 779 and Mst.
Hakumat Bibi v. Imam Din and others PLD 1987 SC 22 ref.
Rao Munawar Khan for Appellant.
Syed Ali Raza Rizvi for Respondent.
Date of hearing: 3rd June, 2002.
JUDGMENT
ABDUL SHAKOOR PARACHA, J.---This appeal impugns the judgment and decree
dated 6-6-2001, passed by the Additional District Judge, Okara, whereby a suit filed by
Rana Muhammad Sarwar under Order 37, C.P.C. for recovery of Rs.3,00,000 against Haji
Muhammad Siddique, appellant herein, was decreed on the basis of a pronote dated 4-8-
1998, on the ground that the defendant-appellant has failed to furnish security and to file
written statement, as required, by proceeding under Order VIII, rule 10, C.P.C.
2. Relevant facts for disposal of the present appeal, in brief, are that Rana Muhammad
Sarwar, respondent herein, filed a suit under Order 37, C.P.C. for recovery of Rs.3,00,000
on the basis of a pronote dated 4-8-1998 against the appellant before Additional District
Judge, Okara on 12-1-2001. The appellant-defendant put in appearance on 19-4-2001 and
filed an application seeking leave to appear and defend the suit. For filing written reply
by the plaintiff to the application the case was adjourned to 15-5-2001. On that date, on
the statement of the learned counsel for the respondent-plaintiff that he had no objection
on acceptance of the application subject to furnishing security by the defendant equal to
the suit amount; the application was accepted and the appellant-defendant was allowed to
appear and defend the suit subject to appellant's furnishing security equal to the amount
of the claim until the next date of hearing and the case was adjourned to 30-5-2001 for
submission of written statement. On 30-5-2001 neither the security was furnished nor
written statement was filed by the appellant. Instead, an application was moved by the
appellant stating that he could not arrange for the, surety bond therefore time be
Page No. 2 of 4
extended: On the request of the learned counsel for the appellant the case was adjourned
to 4-5-2001 for submission of the bond and for filing the written statement, but on 4-6-
2001 the appellant neither submitted the surety bond nor written statement was filed
therefore the case was adjourned for further proceedings to 6-6-2001, but on that date
also neither the surety bond was submitted nor written statement was filed. Consequently
the learned Additional District Judge proceeded to decree the suit of the respondent vide
judgment and decree dated 6-6-2001.
3. Before us, the learned counsel for the appellant firstly contended that it was obligatory
for the trial Court to frame issue, record the evidence and then to decide the case under
Order 37, C.P.C. Further contends that the pronote and receipt dated 4-8-1998 have not
been proved in accordance with the provisions of Articles 17 and 79 of the Qanun-e-
Shahadat Order, 1984.
4. On the other hand, the learned counsel for the respondent argues that the order of the
learned Additional District Judge granting leave to appear and defend dated 15-5-2001
was conditional as the application was accepted and leave was granted to the appellant
subject to his furnishing security equal to the suit amount which condition has not been
fulfilled despite the fact that the appellant sought time for doing the needful.
5. We have noted that on the statement of the learned counsel for the respondent the
application for seeking leave to appear and defend of the appellant was granted subject to
his furnishing security bond equal to the suit amount till the next date, of hearing i.e. 30-
5-2001, but on the said date neither the security was furnished nor written statement was
filed by the appellant: The condition attached to the order dated 15-5-2001 accepting the
application subject to furnishing security bond by the appellant equal to the suit amount
was violated. Even then the appellant was given two dates, i.e. 30-5-2001 and 4-6-2001
for compliance of the conditional order of furnishing the security equal to the suit
amount. The case was adjourned to 6-6-2001 on the request of the appellant, but on the
said date also neither the security bond was submitted nor written statement was filed.
Since the order was conditional, the learned Additional District Judge has rightly
proceeded to decree the suit of the respondent.
6. Three dates were granted to the appellant i.e. 30-5-2001, 4-6-2001 and 6-6-2001 for
compliance of the order dated 15-5-2001 to file the security bond and the written
statement. The Court is empowered under section 148, C.P.C. to grant time for
compliance of its order and to extend time for doing of any act prescribed or allowed by
the Court, but it cannot extend the period under the said section within his discretion as
the appellant has deliberately and contumaciously not complied with the Court-order. In
case reported as Siddiq Khan and 2 others v. Abdul Shakur Khan and another (PLD 1984
SC 289) it has been ruled that the extension should not be refused unless the appellant has
deliberately or contumaciously not complied with the Court order.
7. We have noted that the written statement has not been filed by the appellant despite
that numerous directions were given by the Court for filing the written statement. Order
VIII, rule 10, C.P.C: empowers the Court to pronounce judgment against the defendant or
make such order in relation to the suit as it thinks fit where the party fails to file written
statement within the time fixed by the Court. Rule 10 of Order VIII, C.P.C. is penal in
nature, and it is within the discretion of the Court to announce judgment even without
recording evidence. In case of Sh. Abdus Saboor and Brothers v. Ganesh Flour Mills Ltd.
(PLD 1967 Lahore 779) it was observed:--
"Under rule 10, the Court has been, given the discretion to 'pronounce judgment against'
the defendant. It does not mean at all that the Court is to take any further steps to
ascertain the truth of the contentions raised in the plaint. In the phrase 'pronounce
judgment against him' the words `pronounce' and 'against him' are significant. Once the
Court decides to exercise the discretion under rule 10, it has to pronounce the judgment
against the defendant."
Further it was observed:--
"It is necessary for the Court to record any evidence before it may pronounce judgment
under rule 10 of Order VIII."
Page No. 3 of 4
8. The above-referred case of Sh. Abdus Saboor has been approved by the Honourable
Supreme Court while interpreting the provisions of rule 10 of Order VIII, C.P.C. in case
of Mst. Hakumat Bibi v. Imam Din and others (PLD 1987 SC 22).
9. On the touchstone of Order 37, section 148 and Order VIII, rule 10, C.P.C., we hold
that the learned Additional District Judge had the jurisdiction to pass the impugned order
and decree without recording the evidence, and no exception can be taken to the
impugned judgment and decree of the learned Additional District Judge, Okara.
Resultantly, this appeal fails and tie same is dismissed with costs.
H.B.T./M-1665/L Appeal dismissed.
Page No. 4 of 4
Citation Name : 2004 &nbspMLD &nbsp1868 LAHORE-HIGH-COURT-LAHORE
Side Appellant : SHAUKAT ALI alias SHAUKAT HAYAT
Side Opponent : MUHAMMAD HANIF
---S.12---Qanun-e-Shahadat (10 of 1984), Arts. 78 & 79---suit for specific

performance of agreement to sell---Document, proof of---Proof of signatures---Execution
of agreement to sell and transfer of possession of the property was found by Trial Court
to be proved---suit was dismissed on the ground that plain tiff had failed to deposit the
balance amount--in ference, drawn by Trial Court was reversed by the Appellate Court on
the ground that order to deposit balance amount was conditional order to the extent of
issuance of temporary in junction, neither it was a condition for performance of
agreement nor it could be made the basis for decidin g the suit ---Payment of advance
money was proved--Appellate Court accepted the appeal and decreed the suit
---Validity--Non-deposit of remain in g amount had resulted in vacation of in terim in
junction---Such fact, however, would not affect the appraisal of evidence, legality of
execution of agreement to sell basin g on consideration, and delivery of possession---Fin
din gs of Trial Court were not challenged in cross-objections---Signatures on agreement
were admitted---One witness and scribe were sufficient to prove execution----Judgment
of Appellate Court was confirmed in cir
Page No. 1 of 1
1998CLC55
[Lahore]
Before Ihsan-ul-Haq Chaudhry and Syed Najam-ul-Hassan Kazmi, JJ
Mst. ZAHIDA BEGUM and another---Appellants
versus
SAEED YOUSAF SHEIKH and another---Respondents
Regular First Appeal No. 178 of 1997, heard on 24th July, 1997
Specific Relief Act (I of 1877)---
----S. 22---Civil Procedure Code (V of 1908), S. 96 & O. XX, R. 14 --- Trial Court
while granting decree for specific performance imposing condition of plaintiff to deposit
balance amount failing which suit would stand dismissed--Validity---No bar in law, if
Court while granting decree for specific performance, indicated that same would come to
an end in the event of failure to make payment of balance sale price by stipulated
date---Trial Court while making such order did not commit any error of law---Plaintiff,
in suit for specific performance, must allege and prove his readiness and willingness to
perform obligations under sale agreement to reflect his bona fides and readiness, and he
has to show that he could have the requisite funds within stipulated time and that he was
ready with funds in his pocket, when he approached the Court for enforcement of
agreement---Vendor could at any stage agree, that suit be decreed and agreement be
enforced, which could not be refused by vendee, on pretext, that he could not arrange
funds or that there was shortage of time--Relief of specific performance being
discretionary in nature, could not be allowed, if one did not act with promptness and
prove with his conduct, his bona fides to perform obligations in terms of
agreement---Plaintiffs being not ready and willing to perform their obligation, despite
having gained opportunities to do so, Trial Court was fully justified in granting equitable
relief, conditionally on payment of balance price within time fixed in the order and
providing for dismissal of suit in the event of default---Plaintiffs were not entitled to
relief in circumstances.
Amjad Malik v. Muhammad Saleem and others 1992 MLD 31 and Joydeb Agarwala v.
Baitulmal Karkhana Ltd. PLD 1965 SC 37 ref.
Ch. Inayat Ullah for Appellants.
Muhammad Saleem Sheikh for Respondents.
JUDGMENT
SYED NAJAM-UL-HASAN KAZMI, J.---Through this appeal, the appellants seek

modification of judgment and decree, dated 19-6-1997, of the learned Civil Judge,
whereby the suit for specific performance of appellants was decreed, subject to deposit of
balance sale price till 28th of June, 1997.
2. To enforce agreement of sale dated 29-2-1996, in regard to a Bungalow No.123-G

Model Town Lahore, the appellants filed a suit for specific performance, claiming
therein, that respondent No.l had agreed to sell the Bungalow under reference, in
consideration of Rs.77 Lacs, received a sum of Rs.8 Lacs as earnest money and
committed to execute sale deed till 1-9-1996. The appellants claimed having remained
ready and willing to perform their part and complained failure on the part of respondent
No.l in doing the needful, in terms of sale agreement, with the result, that indulgence of
Court was sought to give effect to the terms of the sale agreement.
3. Respondent No.1, in his defence, inter alia maintained, that he was a doctor, settled in
United States of America who came to Pakistan, on 22-8-1996, for execution of
Page No. 1 of 5
sale-deed, which could not be executed, because of paucity of funds with the appellants
and that despite a notice to the appellants for performance of their obligations in terms of
sale agreement, they could not arrange for the requisite funds and allowed the stipulated
period to expire, whereafter the suit was filed with mala fide intents to cause harassment,
as the appellants knew, that respondent No. l could not stay for long in Pakistan.
Notwithstanding the default and breach of contract on the part of appellants, which
rendered them disentitled to seek any relief in equity, respondent No. 1, offered to
execute the sale-deed, subject to the condition, that the appellants should make payment
of balance sale price within five days.
4. An application under Order 39, Rules 1 and 2 of C.P.C. seeking injunctive relief
against alienation of property and transfer of possession, pending decision of the suit, was
filed by the appellants. Vide order, dated 7-9-1996, the learned trial Court directed the
appellants to deposit balance sale price of Rs.69 lacs, before the next date of hearing,
failing, it was observed, that the ad interim injunctive order would not be extended.
5. The appellants assailed the aforesaid order of learned trial Court, in First Appeal from
Order 238 of 1996 which was dismissed on 24-9-1996, with a direction to the learned
trial Court to decide the suit expeditiously.
6. An application under Order 7, Rule 11, of C.P.C. was filed by respondent No.1 in the
trial Court, seeking rejection of the plaint. During hearing of the application, the opposite
side, reiterated the offer, that respondent No. l was prepared to execute sale-deed,
provided the appellants pay the balance sale price of Rs.69 lacs. The learned trial Court,
vide judgment and decree, dated 19-6-1997, conditionally decreed the suit, with the
direction, that the balance sale price of Rs.69 Lacs should be deposited till 28-6-1997,
failing which suit would be deemed to have been dismissed. The final judgment and
decree of the learned trial Court has now been assailed in this appeal.
7. Learned counsel for the appellants argued that the learned trial Court should not have
conditionally decree the suit and it should have been left open for the appellants to
deposit the balance sale price at their own convenience. He further submitted that since
Order 20, Rule 14 of C.P.C. was not attracted to a decree for specific performance,
therefore, neither the trial Court could impose any condition to the decree nor it was
permissible under section 35 of the Specific Relief Act. Reliance was placed on PLD
1965 SC 37 to contend that an equitable estate had been created in favour of the
appellants by virtue of the sale agreement of which they could not be deprived.
Conversely, learned counsel for respondent No. 1, argued that there was no bar in
imposing condition to the grant of decree for specific performance and that in the
circumstances of the case, the conduct of appellants did not justify indulgence in
equitable jurisdiction.
8. We have considered the submissions made by learned counsel for the parties and
perused the record.
9. The plea that the trial Court could not impose condition while granting decree for
specific performance, is not in accordance with law. No doubt the provisions of Order 20,
Rule 14, C.P.C. are not attracted to a decree for specific performance, nevertheless, it
cannot be said, that while granting a relief in equitable jurisdiction, the Court could not
impose a condition to safeguard the interest of vendor. The provisions of section 35 of
Specific Relief Act, appear to have not been properly construed by the appellants. There
is no bar in law, if the Court, while granting decree for specific performance, indicate,
that it will come to an end, in the event of failure to make payment of balance sale price
by a stipulated date.
Page No. 2 of 5
10. The question raised by learned counsel for the appellants, was also considered, in the
case of Amjad Malik v. Muhammad Saleem etc. (1992 MLD 31) where it was held as
follows:--
"True that the Code of Civil Procedure does not supply the form for a decree in a suit for
specific performance, yet there is no provision in the Code of Civil Procedure and none
was cited precluding the Court from fixing a date for the payment of the purchase money
and at the same time ordering that the suit shall stand dismissed in case the payment is
not made timely. In such a case, the Court has indicated in advance that the contract
would stand determined by the failure to make the payment by the appointed date. Some
support is lent to this view by the following observations of Wallace, J. in Abdul Shaker
v. Abdul Rahman.
'It is perfectly clear that the contract is not determinable or determined by the mere failure
to comply with the terms of the decree. It is not determined until the Court orders that it
is determined. By the decree for specific performance the Court sets out what it finds the
real contract between the parties was, and declares that such contract exists arid gives
what it considers a reasonable time within which the contract shall be carried out.
Regarding the decree from this point of view, as contract, it is clear in this case, as in
most others of the same kind, that time is not of the essence of the contract, and that, until
the contract is rescinded by formal order or decree, such time for performance, not being
an essential part of the contract, may be varied by the Court which has declared what the
essential terms of the contract are."
Here, the Court had, while passing the decree, made a formal order that the suit would
stand dismissed in case the condition of the payment of the purchase money by the
appointed date was not performed. That order in the decree was also a formal rescission
of the contract effective from the date specified in the decree. It seems to be inexorable
logic, therefore, that the order in the decree that the suit shall stand dismissed produced
the result that after the appointed date, the Court had become functus officio and also that
after that date, the contract was no more in existence. It is equally plain that the power
under section 35 of the Specific Relief Act, 1877, being the power to rescind the contract,
the contract must be in existence for that power to operate upon. To rescind means to
annul, to abrogate, to put an end to. The power to rescind, therefore, presupposes the
existence of what is to be rescinded; for just as you cannot build anything on nothing, you
cannot rescind something that does not exist.
I would, therefore, respectfully adopt the view taken Bhujangrao Ganpati's case and hold
that both because the Court had become functus officio and the contract stood rescinded
by the order in the decree itself that the suit would dismissed, the learned trial Judge
rightly held that he had no power to extend the period for the payment of the purchase
money. "
11. We agree with the view taken in the abovenoted case and observe that the learned trial
Court could, in law, warn pre-hand, while passing the decree of specific performance,
that non-payment of the balance sale price, will ipso facto result in rescission of the
contract and dismissal of the suit and while doing so, it did not commit any error of law.
Page No. 3 of 5
12. The case referred to by the learned counsel for the appellants, namely, Joydeb
Agarwala v. Baitulmal Karkhana Ltd. (PLD 1965 SC 37), is not in any way, helpful to the
appellants in convassing the proposition advanced by the learned counsel for the
appellants. In the said case, it was observed, that a decree for specific performance has
the effect of confirming the equitable estate in question for the due ordering of the rights
and obligations of parties under the authority of Courts of law. There is no cavil with this
proposition nor the issue under consideration in the said case is subject matter of issue in
the present appeal. Here, the question raised is, if the trial Court could pass a conditional
decree or provide for dismissal of the suit in case of non-deposit of the balance sale
price, which as observed above, was within the competence of the learned trial Court.
13. Since the matter under consideration relates to the grant of relief in equity, therefore,
certain important features of this case reflecting upon the conduct of appellants cannot be
overlooked. The agreement of sale was admittedly executed on 29-2-1996, in terms
whereof, the sale-deed was to be executed till 1-9-1996, on payment of balance amount
of sale consideration. The respondent No. 1, came from United States on 22-8-1996 for
the purposes of execution of sale-deed which fact is also not denied in the plaint. Despite
notice from the respondent, the appellants did not, arrange for the balance sale price and
instead, filed the suit for specific performance on 2-9-1996. The suit was initially filed
without any court-fee, when the learned trial Court directed the appellants to make up the
deficiency in court-fee. The deficiency was later made up under the orders of the Court.
For seeking interim relief, against proposed alienation and transfer of possession, the
appellants filed an application, when the learned trial Court directed them to deposit
balance sale price, to show their bona fide, for seeking ad interim relief. It was observed,
that if the balance sale price would not be deposited by the next date, the interim
injunctive order would not be extended. To circumvent the effect of the order, the
appellants filed application for transfer of the suit and obtained order for stay of
proceedings in the trial Court. They did not deposit the balance sale price in compliance
to the order of the Court.
14. Later, the appellants filed First Appeal from Order No.238 of 1996 against order,
dated 7-9-1996, requiring them to-deposit the balance sale price, which appeal was
dismissed on 24-9-1996. Despite dismissal of the appeal, the. appellants did not deposit
the balance sale price.
15. The respondent No. 1, despite reach of contract on the part of appellants and their
disentitlement to seek any relief in equity, right from the beginning made an offer firstly
in their reply to the application for injunction and thereafter, in the written statement, that
he would execute the sale-deed, provided the appellants deposit balance sale price within
five days. The appellants did not take any step to show their readiness and willingness to
perform acts under the contract. So much so, at the time of hearing of application for
rejection of plaint, an offer was made by the opposite side, in the aforesaid terms, when
the learned trial Court, finding the claim having been accepted, proceeded to pass a
decree for specific performance, on the condition, that the balance sale price should be
deposited till 28-6-1997, failing which, the suit should be treated to have been dismissed.
The appellants did not comply with the order, allowed the time to expire and on the last
date, i.e. 28-6-1997, applied for certified copies of the impugned judgment and decree,
obtained the copies on the same date and proceeded to file this appeal. Even in appeal,
vide order, dated 30-6-1997, this Court directed, that the appellants might deposit the
balance sale price at their own risk and cost. The appellants failed to make any deposit.
16. From the resume of the facts, the conduct of the appellants become evident. In a suit
for specific performance, one has to allege and prove his readiness and willingness to
perform obligations under the sale agreement. To reflect his bona fide and readiness, one
has to show that he had the requisite funds within the stipulated time and that he was
ready with the funds in his pocket, when he approaches the Court for the enforcement of
Page No. 4 of 5
the agreement. The vendor can at any stage, agree, that the suit be decreed and agreement
to be enforced, which cannot be refused by the vendee, on the pretext, that he could not
arrange funds or that there was a shortage of time. The parties, keeping in view the nature
of transaction the value of the property involved and considering the character of their
respective obligations, a period uptil 1-9-1996 for execution of the sale-deed, during
which time, no sale-deed could be executed, as, the appellants did not have the funds.
The lack of bona fide and willingness to perform contract, on the part of the appellants is
further strengthened, by the conduct of the appellants, who did not make any deposit,
when called upon to do so by the Court. So much so, the suit remained pending since
2-9-1996 till 19-6-1997, when the impugned decree was passed, yet the appellants
could not arrange for the funds and simply filed the appeal for the sake of gaining time
and prolonging agony of the vendor by waiting upto unlimited extent. The relief of
specific performance under section 22 of the Specific Relief Act, being discretionary in
nature, cannot be allowed, if one does not act with promptness and prove with his
conduct, of bona fide to perform obligations in terms of the agreement. The
circumstances noted supra, are evident of the fact, that the appellants were not ready and
willing to perform the obligations, despite having gained opportunities to do so. It is not
at all a case in which, even extension in time can be allowed. The appellants have already
availed double the time than provided in the agreement itself, yet they failed to take any
step, demonstrating their bona fide to perform the obligations. The respondent No. l
having agreed to the grant of conditional decree, the learned trial Court was fully justified
in granting equitable relief, conditionally on the payment of balance sale price within the
time fixed in the order and also providing for dismissal of the suit in the event of default.
In doing so, no provision of Law or Rule of Equity has been violated.
17. For the reasons above, there is no merit in this appeal, which is accordingly dismissed
with costs.
A.A./Z-31/L Appeal dismissed.
Page No. 5 of 5
P L D 1956 (W. P.) Karachi 521
Before Inamullah, J
MRS. PARVEEN BEGUM-Plaintiff
Versus
Raja MUHAMMAD SARWAR KHAN-Defendant
Suit No. 306 of 1956, decided on 7th August 1956.
(a) Civil Procedure Code (V of 1908), O. XXXIX, r. 1---Temporary

injunction-Jurisdiction of Court, to issue-Ancillary to that in specific
performance-Plaintiff to show a prima facie case-Contract Act (IX of 1872), S.
198.
The jurisdiction of the Court in injunction is often ancillary to that in specific

performance, for the purpose of preventing the defendant making a use of some
legal interest or right vested in him in a way inconsistent with the equity claimed
by the plaintiff, or embarrassing the plaintiff by dealing with the property during
the pendency of the action, or obstructing the performance of some act incidental
to the execution of the contract. 'The Court will in many cases interfere and
preserve property in statu quo during the pendency of a suit, in which the rights
to it are to be decided, and that without expressing, and often without having the
means of forming, any opinion as to such rights.
The injunction is therefore granted upon interlocutory application and until the
trial, on the plaintiff showing a prima facie case for specific performance. It is not
necessary that it should be clear that the plaintiff will succeed at the trial, it is
sufficient if there is ground for supposing that relief may be given. For on this
application the Court will not decide delicate points, nor allow it to be resisted
on points such as delay, which can only be decided at the trial.
Fry on Specific Performance, 6th Ed. p. 538.
Held, that for the purpose of deciding the question whether or not a temporary
injunction should issue, the Court will not go into the nice questions of whether
in a suit for specific performance, the defendant's son who had negotiated the
transaction of a sale of plot of land with the plaintiff and who had received the
earnest money by cheque which the defendant had actually cashed, had
authority, scope of which could be determined by drawing a line; it was
sufficient if the Court was satisfied that a prima facie case had been made out
that he had such authority.
Held further, that for the same purpose the fact that the cheque had been cashed
by the defendant, the agreement to sell had been sufficiently ratified within
meaning of section 198, Contract Act.
Page No. 1 of 8
(b) Document-Reciting receipt of an advance and containing offer to execute
"agreement of sale" within one month----Held document evidenced an
agreement to execute the sale-deed.
Where a document recited acknowledgment of receipt of Rs. 15,000 out of a sale

price of Rs. 1,52,500 as advance towards the sale of a plot of land with its
superstructure, and there was an undertaking by the executant that "an
agreement of sale will be executed within one month"
Held, that the words "agreement of sale", considering the tenor of the document,
meant the "contract of sale" i.e., the actual sale-deed.
Shib Lal v. Bhagwan Das I L R 11 All. 244 (250) ref.
(c) Agreement-Whether a completed bargain-Determined from intention of

parties as deducible from its language.
Whether an agreement is a completed bargain or merely a provisional agreement

depends on the intention of the parties as deducible from the language used by
the parties on the occasion when the negotiations take a concrete shape.
Harichand Manchara v. Govind Luxman Gokhale A I R 1923 P C 47 ref.
(d) Civil Procedure Code (V of 1908), O. XXXIX, r. 1---Temporary injunction in

suit for specific performance of agreement to sell-Defendant may be restrained
from transferring property to third person notwithstanding that any such
transfer could be set aside by the application of doctrine of lis pendens Issue of
injunction made conditional on plaintiff depositing part of consideration of sale
in Court.
In a case where there is a clear and undoubted contract as to the validity of

which no dispute arises for the sale of the property, the Court will not after that
contract has been entered into permit the vendor to transfer the legal estate to a
third person notwithstanding the lis pendens will operate against that third
person, and that is well founded in principle, because the effect of the contract is
to pass the whole equitable interest out of the vendor. So long as the contract is
an undisputed contract the whole of the property is in equity transferred from
the vendor to the purchaser ; the vendor then becomes a trustee for the purchaser
and the trustee cannot be permitted to deal with the legal estate so as' to
inconvenience the purchaser.
Hadley v. The London Bank of Scotland 12 L T R 747 at p. 748.
Page No. 2 of 8
Injunction restraining the defendant from transferring the property to a third
person, pending determination of case for specific performance, was granted on
condition of plaintiff depositing in Court Rs. 1,00,000, part of balance of
consideration of the transaction of sale, which the defendant was allowed to
withdraw on furnishing security.
S. Sharifuddin for Plaintiff-Applicant.
Khalid M. Ishaque for Defendant-Opponent.
ORDER
INAMULLAH, J.----The present application for injunction restraining the

defendant from transferring the plot of land in dispute arises out of a suit for
specific performance.
The facts, as alleged in the plaint, are these:
On 14th November 1955, the defendant agreed to sell to the plaintiff a plot of
land situated in Garden East for a sum of Rs. 1,52,500. The plaintiff paid a sum of
Rs. 15,000 as earnest money by cheque on the same date. The balance was to be
paid on the completion of the sale-deed. The plaintiff came to know on 28th
February 1956 that the defendant was negotiating sale of the plot of land in
question to some other person, whereupon she sent a telegram to the defendant
to complete the sale. The defendant by his telegraphic reply repudiated the
contract on 28th February 1956. On these grounds the plaintiff prays for specific
performance of the contract, by ordering the defendant to give a proper
conveyance of the property in question to the plaintiff.
Mr. Sharifuddin for the plaintiff and Mr. Khalid M. Ishaque for the defendant
have ably and at great length argued out the application on behalf of their
clients. Mr. Khalid M. Ishaque for the defendant has raised six-fold contentions,
as follows :-
(1) The document dated 14th November 1955 was only a receipt for the
money paid by the plaintiff, and was not a contract.
(2) Raja Mahboob Asghar son of the defendant had no authority from the
defendant to enter into an agreement to sell the property in question.
Page No. 3 of 8
(3) The doctrine of "holding out" Raja Mahboob Asghar as agent so as to raise
an estoppel against the defendant is not made out in the circumstances of the
present case.
(4) There was no ratification.
(5) There was no enforceable contract, as the parties were ad idem.
(6) The balance of convenience is in favour of the defendant.
I would consider these contentions one by one:
I consider it will be useful to reproduce paragraphs 1155 and 1156 from "Pry on
Specific Performance", 6th Edn. at page 538, for the consideration of the
contentions raised by Mr. Khalid M. Ishaque :-
"1155. The jurisdiction of the Court in injunction is often ancillary to that in

specific performance, for the purpose of preventing the defendant making a use
of some legal interest or right vested in him in a way inconsistent with' the equity
claimed by the plaintiff, or embarrassing the plaintiff by dealing with the
property during the pendency of the action, or obstructing the performance of
some act incidental to the execution of the contract. 'The Court will in many cases
interfere and preserve property in statu quo during the pendency of a suit, in
which the rights to it are to be decided, and that without expressing, and often
without having the means of forming, any opinion as to such rights'. (Per Lord
Cottenham in Great Western Railway Co. v. Birmingham and Oxford Junction
Railway
Co. (2 Ph. 602).
"1156. In the class of cases now to be considered the injunction is therefore

granted, upon interlocutory application and until the trial, on the plaintiff
showing a prima facie case for specific performance. It is not necessary that it
should be clear that the plaintiff will succeed at the trial; it is sufficient if there is
ground for supposing that relief may be given. For on this application the Court
will no decide delicate points, nor allow it to be resisted on points, such as delay,
which can only be decided at the trial".
To the same effect are the observations of Sir Asutosh Mookerjee, J. in the case of
Promotha Nath Roy v. Jagannath Kisore Lal Singh Deo (17 Cal. L J 427). In that
case the injunction was granted by the Court on certain terms as to security and
undertaking given by the plaintiff.
Page No. 4 of 8
It was contended for the defendant that the document dated the 14th November
1955 was not an agreement or a contract to sell. This document, to my mind, is a
very important document. It admittedly was written by the son of the defendant.
It would be necessary to reproduce this document in order to fully appreciate the
contention of Mr. Khalid M, Ishaque. The document reads as under :
"Received Rs. 15,000 (Rupees fifteen thousand only) by cheque number G 658919
dated 14th November 1955 on National Bank of India Ltd. Karachi on behalf of
my father Raja Muhammad Sarwar Khan as advance money from Mst. Parveen
Begum wife of Malik Muhammad Ishaq of Karachi towards the sale of plot No.
194/1 Britto Road Garden East measuring 2924.5 square yards along with its
existing superstructure which has been agreed to be sold to her for lump sum
price of Rs. 1,52,500 (Rupees one lac fifty two thousand and five hundred only)
excluding the cost of registration. An agreement of sale will be executed within
one month from to-day.
(Sd.) Raja Mahboob Asghar
for Raja Muhammad Sarwar Khan".
Mr. Khalid M. Ishaque contended that this document purported only to be a

receipt for the amount of Rs. 15,000 received by Raja Mahboob Asghar, the son of
the defendant Mr. Khalid M. Ishaque also relied on the last line in para. 1 of the
plaint, which reads "The original receipt for the amount paid by the plaintiff is
filed herewith and marked 'A'".
It was urged by him that the plaintiff herself has treated this document of 14th
November 1955 as only a receipt. I have perused the document, reproduced
above, and I have no doubt considering the words that I have italicized,. that this
was not only a document evidencing the receipt of Rs. 15,000 mentioned therein
but also an agreement to convey the plot of land in question to the plaintiff. At
this stage it would also be necessary to give an interpretation to the last line of
the document dated the 14th November 1955, which reads as under :-
"An agreement of sale will be executed within one month from today".
It was urged on the basis of this sentence that the document was only a receipt,
as the parties contemplated that an agreement for sale would be executed later
on. Mr. Sharifuddin, the learned Advocate for the plaintiff, contended that a
distinction has to be drawn between the words "for sale" and "of sale". He
contended that where the words used were "an agreement of sale", it would
mean the sale-deed itself, in contrast to "an agreement for sale". In support of
this contention, he relied on a passage from the Commentary of Chitaley on "The
Transfer of Property Act" Vol. 2, Edn. III, page 863, which reads as under :-
Page No. 5 of 8
"Every sale must necessarily be preceded by a contract for sale. In other words
every sale implies a contract for sale. The sale itself is very often referred to as a
contract of sale, which must therefore be distinguished from a contract for sale.
As pointed out by Mahmood, J., in Shib Lal v. Bhagwan Das (I L R 11 All. 244
(250)) a contract of sale is an executed contract and a contract for sale is an
executory one".
Keeping in view the above statement of law as given by Mahmood, J., it would
appear from the last sentence of the document dated the 14th November 1955
that the parties had agreed that the sale-deed was to be executed after a month.
Under the Contract Act, a 'contract' means 'an agreement enforceable by law'.
Without going into the niceties of C the difference between the words
"agreement" and "contract" the parties considering the tenor of the whole
document may have used the word "agreement" especially when it preceded the
words "of sale" to mean the contract. So far as the mention of this document in
para. 1 of the plaint as receipt is concerned. There is no doubt that this document
is also a receipt for the amount of Rs. 15,000.
The next contention of Mr. Khalid M. Ishaque was that Raja Mahboob Asghar
had no authority from his father to enter into any agreement to sell the property
in question. The plaintiff has not produced any power of attorney in favour of
Raja Mahboob Asghar executed by the defendant. The plaintiff relies upon the
statement of fact as disclosed in the document dated 14th November 1955. She
has also filed an order confirming the sale of the plot in question in favour of the
defendant by the Deputy Custodian. It would appear from this order that
Raja Mahboob Asghar had examined himself to prove the adequacy of the sale
consideration. On behalf of the defendant reliance was placed on the affidavit;
filed by the defendant and his two sons, Raja Mahboob Asghar and Raja Ghulam
Hyder denying that any authority to enter into an agreement to sell the property
in question was conferred by the defendant on Raja Mahboob Asghar. It would,
however, appear from a perusal of the affidavits of these persons that it has not
been alleged that Raja Mahboob Asghar had no authority even to negotiate for
the sale of the property in question. In fact, it would appear from a perusal of
these affidavits that the part played by Raja Mahboob Asghar in negotiating for
the sale of the property is not disowned by the defendant. In other words, on the
case made out by the defendant it would appear that Raja Mahboob Asghar had
only a limited authority in respect of the conveyance of the plot of land in
dispute. Under these circumstances, for the purposes of the present application it
is difficult for me to draw a line between the scope of authority conferred on Raja
Mahboob Asghar. However, on a perusal of the document dated the 14th
November 1955 I am satisfied that for the purposes of the present application,
the plaintiff has been able to make out a prima facie case that Raja Mahboob
Asghar had authority on behalf of his father, the defendant.
It was further contended by Mr. Khalid M. Ishaq the learned Advocate for the
defendant that the doctrine of "holding out" so as to raise an estoppel against the
defendant did not apply in the present case. It was contended that a person
relying on agency by estoppel must show that he was led into the belief of
agency in good faith from the previous dealings or representations. In the
present case, no agency by estoppel has been urged by Mr. Sharifuddin, the
question therefore does not arise.
Page No. 6 of 8
It was neat urged on behalf of the defendant that even if there was an agreement
between Raja Mahboob Asghar and the plaintiff, the same was never ratified by
the defendant. Reliance was placed on section 198 of the Contract Act to show
that there could not be any valid ratification, as the defendant's knowledge of
what had transpired between Raja Mahboob Asghar and the plaintiff was
defective. Mr. Sharifuddin relied on the admission of the defendant that on 22nd
November 1955 Raja Mahboob Asghar had handed over the cheque of Rs. 15,000
to the defendant and the same had been cashed by the defendant. It was also
urged by Mr. Sharifuddin relying on the affidavit of Malik Ishaque that the
circumstances under which the cheque had been passed on to the defendant
must have come to the knowledge of the defendant. I consider, for the purpose of
this application, without going into the niceties of the question, that the
contention of the learned Advocate for the plaintiff that the agreement between
Raja Mahboob Asghar and the plaintiff was ratified is not without force.
It was, further, very strenuously contended by Mr. Khalid M. Ishaque that there
was no enforceable contract, as the parties were ad idem. He contended that even
if it were assumed that the document dated the 14th November 1955 was an
agreement, it was silent on many of the usual terms which are generally
embodied in an agreement to sell. He submitted that the agreement was silent as
regards the time within which the sale-deed was to be executed; it was also
silent as to the time within which the income tax certificate was to be obtained by
the vendor. So far as the question of time within which the execution of the
sale-deed was to take place is concerned, if the interpretation sought to be put on
the last line of the document dated the 14th November 1955 is correct, the
sale-deed was to be executed within one month from the date of the execution of
the document. So far as the question that the document is silent as regards the
time within which the income tax certificate was to be obtained by the vendor is
concerned, it is not necessary to mention. In my opinion, the document in
question is very clear: it specifies the amount for which the property in question
was to be sold, the property which was to be sold and the time within which the
deed was to be executed. Much of the difficulty relating t9 this document of the
14th November 1955 has arisen because it was mentioned therein that an
agreement of sale would be executed later on, within a month. As observed by
the Privy Council in the case of Harichand Manchara v. Govind Luxman
Gokhale (A I R 1923 P C 47) "whether an agreement is a completed bargain or
merely a provisional agreement depends on the intention of the parties as
deducible F from the language used by the parties on the occasion when the
negotiations take a concrete shape". I am of the view that the parties knew as to
what they were about.
It was lastly urged by Mr. Khalid M. Ishaque that the balance of convenience was
in favour of the defendant. I do not think so. In this connection, the observation
of Lord Justice Turner in the case of Hadley v. The London Bank of Scotland (12
L T R 747 at p. 748) is very elucidating and runs thus :-
"I have always understood the rule of the Court to be that, in a case where there
is a clear and undoubted contract as to the validity of which no dispute arises for
the sale of the property, the Court will not after that contract has been entered
into permit the vendor to transfer the legal estate to a third person
notwithstanding the lis pendens will operate against that third person, and I
think that as well founded in principle, because the effect of the G contract is to
pass the whole equitable interest out of the vendor. So long as the contract is an
undisputed contract the whole of the property is in equity transferred from the
vendor to the purchaser ; the vendor then becomes a trustee for the purchaser
Page No. 7 of 8
and the trustee cannot be permitted to deal with the legal estate so as to
inconvenience the purchaser".
I respectfully accept this statement of law. Mr. Khalid Ishaque, however,

contended that in order to apply this dictum, the contract must be an undisputed
contract. He contended that the contract must be one which is admitted by the
defendant. I do not think this meaning can be given to an undisputed contract.
The defendant cannot be allowed to nullify the object of a suit for specific
performance by denying the contract, however, clear that contract may be. It is
always left to the Court to find out whether the contract is one which would
prima facie entitle the plaintiff to the relief he has sought for. I find that the
balance of convenience is in favour of the plaintiff.
In the present case I consider that I should not grant the injunction without
putting the plaintiff to terms. Mr. Sharifuddin for the plaintiff agreed to deposit
the whole sale consideration in Court, but on my suggestion that the same may
be allowed to be withdrawn by the defendant on condition of his furnishing
security, he stated that if the defendant were so allowed to withdraw, he would
be conceding the case of the plaintiff. I do not see how the plaintiff would suffer
if the defendant by his own act were to concede the case of the plaintiff. If the
defendant withdraws the money after the order of the Court, he will do so after
considering his position in law. The defendant has already received Rs. 15,000 as
sale consideration ; the balance is about Rs. 1,38,000. So long as the case remains
pending the defendant would remain out of pocket to the tune of about Rs.
1,38,000. In equity, therefore, the defendant must be allowed to withdraw the
amount on furnishing security if he so desire. On the other hand, the plaintiff
will be out of pocket of the whole sale consideration if he was asked to deposit
the amount. I consider, in the interest of justice, the plaintiff should not be called
upon to deposit the whole amount of the sale consideration. I would order him
to deposit only Rs. 1,00,000 (Rupees one hundred thousand) H within two weeks.
The defendant would be entitled to withdraw the same on furnishing security of
the plot in dispute. The interim order on condition of the deposit of money is
made absolute. The defendant or any person claiming through him is further
restrained from putting any construction on the plot or doing anything which
may affect the value of the land in question. The interim order to continue for
two weeks. On deposit of the amount the interim order will become absolute. On
the failure to deposit the money within two weeks the interim order will stand
withdrawn.
A. H. Application allowed.
Page No. 8 of 8
Before Nadeem Azhar Siddiqui, J
Messrs BAHRIA FOUNDATION, KARACHI---Plaintiffs
Versus
ABDUL ALEEM BUTT---Defendant
Civil Suit,No.1110 of 2001, decided on 13th June, 2006.
----O. XXXVII, Rr. 2 & 3---Recovery of money on the basis of negotiable

instrument---Leave to defend the suit, non-availing of---Effect---If defendant has
failed to obtain leave to defend the suit, Court is required to apply its mind to the
facts and documents, placed on record before passing any order or judgment,
notwithstanding the fact that no person has appeared before it to oppose such
order or the person who wanted to oppose was not allowed to oppose because
he failed to fulfil the requirement of law.
(b) Stamp Act (II of 1899)---
--S. 11---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Promissory note

written on stamp. paper---Defendant assailed promissory note on the ground
that it was not written on a paper containing adhesive stamp as required under
S.11 of Stamp Act, 1899---Validity---Provisions of S.11 of Stamp Act, 1899, were
directory and permissive in nature and were not mandatory---Promissory note
could be written on a paper having adhesive stamps and could also be written on
a stamp paper---Only because the promissory note was not written on a paper
having adhesive stamp did not lose its utility as promissory note---Not necessary
that promissory note must be affixed with adhesive stamp---Promissory note
written on stamp.,paper was as good as written on paper containing adhesive
stamps.
Muhammad Akram v. Khuda Bux 2000 CLC 759 and Farid Akhtar Hadi v.
Muhammad Latif Qazi 1988 CLC 2397 distinguished.
Page No. 1 of 8
Muhammad Sharif v. Muhammad Hashim Paracha and another PLD 1987 Kar.
76; Habib Bank Limited v. Chaudhry Cloth House 1991 CLC 164; P. Moorthy v.
A.R. Kothandaraman AIR 1978 Madras 412 and Somdatta v. Abdul Rashid AIR
1968 Rajasthan 45 rel.
----O. XXXVII, Rr. 2 & 3---Recovery of money on the basis of promissory note---
Leave to defend the suit---Non-compliance of conditional order---Presumption
against negotiable instrument---Defendant was granted leave to defend the suit
subject to furnishing of surety bond---Despite extension in time, defendant failed
to furnish any surety as directed by the Court---Effect---Plaintiff, while
producing promissory note and acknowledgment of debt and undertaking of
repayment had proved that the promissory note was executed against
consideration---Presumption was also in favour of negotiable instrument that the
same was made and drawn against consideration:---There was no rebuttal to
such fact, as the defendant, in spite of getting opportunity to defend the case, had
failed to file any defence---Plaintiff proved that the defendant had executed a
promissory note and had failed to repay the amount mentioned in it---Suit was
decreed in circumstances.
Naeem Iqbal v. Mst. Zarina 1996 SCMR 1530 and Haji Muhammad Siddiqiue v.
Rana Muhammad Sarwar PLD 2005 SC 322 ref.
Haji Ali Khan and Company v. Allied Bank of Pakistan Limited PLD 1995 SC 362
rel.
Yasin Azad for Plaintiff.
Choudhry Abdul Rasheed for Defendant.
Date of hearing: 1st June, 2006.
JUDGMENT
NADEEM AZHAR SIDDIQI, J.---This is a suit for recovery of Rs.5,050,000 under

Order XXXVII Civil Procedure Code. The facts necessary for the disposal of the
suit are that the defendant was appointed as Special Technical and Sale Advisor
on. January 12, 1998. The plaintiff during the course of employment of the
defendant has from time to time provided a sum of Rs.5,450,000 to him. The
defendant supplied accessories comprising 817 Mobile Antennae, 120 Base
Page No. 2 of 8
Antennae and 65 power Supplied to Punjab Police at his risk and cost, which
were rejected by Punjab Police. The defendant undertook to sell the said
accessories to prospective buyers at this own risk and to pay the proceeds of sale
to the plaintiff against the aforesaid debit of Rs.5,050,000. It is further stated in
the plaint that after receiving the aforesaid amount the defendant remained
absent form his duties from April 1, 1998. The defendant on June 13, 1998
executed a Promissory Note in favour of plaintiff acknowledging his liabilities in
the sum of Rs.5,050,000 and also executed an acknowledgment on stamp paper
and undertook to repay his liabilities on or before August, 12, 1998. The services
of the defendant was terminated on June 17, 1998. The plaintiff lodged F.I.R.
against, the defendant and the defendant filed civil suits against the plaintiff.
The summons under summary chapter were served upon the defendant, who
vide C.M.A. No.6629 of 2001 applied for leave to defend the suit unconditionally.
After hearing, vide order dated 30-3-2004 conditional leave to defend the suit
subject to furnishing surety was allowed to the defendant. The defendant instead
of furnishing surety filed C.M.A. No. 2537 of 2004 seeking review of order dated
30-3-2004. The review application was disposed of vide order dated 17-5-2004 as
not pressed and two weeks time was allowed to the defendant to furnish
security. In spite of extension of time surety was not furnished and the matter
was fixed for arguments/final disposal.
Mr. Yasin Azad, learned counsel for the plaintiff has submitted that the suit is
based on negotiable instrument and the same is not disputed by the defendant.
He further submits that the defendant has confirmed his liabilities by executing
acknowledgment of debt and undertaking of repayment, which is also an
undisputed document. He also refers to section 118 of Negotiable Instruments
Act and has submitted that presumption is in favour that all the negotiable
instruments were made or drawn for consideration. His further contention is that
since the defendant has failed to obtain leave to defend the suit the contents of
the plaint shall be deemed to be admitted and the plaintiff is entitled to a decree
without further proceedings.
The learned counsel for the plaintiff relied upon the following reported cases:--
. (I) Naeem Iqbal v. Mst. Zarina 1996 SCMR page 1530.
(2) Haji Muhammad Siddique v. Rana Muhammad Sarwar PLD 2005 SC page
3223.
The learned counsel for the defendant Choudhary Abdul Rasheed has submitted
that the suit has been filed on the basis of a document which is not a promissory
note as the same is written on a paper having no adhesive stamps and is hit by
section 11 of Stamp Act. He further submits that in view of section 35 of the
Stamp Act the document not properly stamped is inadmissible in evidence and
the judgment and decree under Order XXXVII, C.P.C. cannot be passed. He
further submits that the alleged Promissory Note at the best can be treated as
Bond and the suit has to be proceeded as a long cause suit. He relied upon the
following reported cases:--
Page No. 3 of 8
(1) Muhammad Akram v. Khuda Bux 2000 CLC page 759.
(2) Farid Akhtar Hadi v. Muhammad Latif Qazi 1988 CLC page 2397.
In rebuttal Mr. Yasin Azad, learned counsel for the plaintiff has submitted that
since the defendant fails to obtain leave to defend the suit, the contention raised
by him cannot be considered. He further submits that affixing of adhesive stamp
is not mandatory requirement of law and the Promissory Note was properly
written on a proper stamp paper and is admissible in evidence. He relied upon
the following reported cases:--
(1) Muhammad Sharif v. Muhammad Hashim Paracha and another PLD 1987
Karachi page 76.
(2) Habib Bank Limited v. Chaudhry Cloth House 1991 CLC page 164.
(3) P. Moorthy v. A.R. Kothandaraman AIR 1978 Madras page 412.
(4) Somdatta v. Abdul Rashid AIR 1968 Rejasthan page 45.
I have heard the learned counsel for the parties and perused the record.,
No-doubt the defendant has failed to obtain leave to defend the suit. However,
the Court is required to apply its mind to the facts and documents before passing
any order or judgment notwithstanding the factum that no person has appeared
before it to oppose such an order or that the person, who wanted to oppose, was
not allowed to oppose because he failed to fulfil requirement of law. The
contention of Mr. Yasin Azad, Advocate is that the contention raised by the
defendant cannot be considered has no force.
The learned counsel for the defendant has challenged the Promissory Note on
the ground that it has not been written on a paper containing adhesive stamp
and referred to section 11 of the Stamp Act in support of his contention. Section
11 of Stamp Act provides use of adhesive stamps, the same reads as under:-
"11. Use of adhesive stamps.--The following instruments may be stamped with

adhesive stamps, namely:--
Page No. 4 of 8
(a) instruments chargeable with the duty of one anna [or half an anna], except
parts of bills of exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange and promissory notes drawn or made out of (Pakistan);
(c) entry as an Advocate, wakil or attorney on the roll of a High Court;
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other

body corporate."
From bare reading of the above provisions, it is clear that the provisions are
directory and permissive in nature and are not mandatory. The Promissory Note
can be written on a paper having adhesive stamps and can also be written on a
stamp paper and only because Promissory Note was not written on a paper
having adhesive stamp does not lose its utility as Promissory Note. In the
reported case of Muhammad Sharif v.
Muhammad Hashim Paracha PLD 1987 Karachi page 76 the learned Single
Bench of this Court has held as under:
"Mr. Kanwar Mukhtar Ahmad, the learned counsel for the defendant, has
specifically referred to section 11 and contended that according to this provision
of law promissory note executed or made out of Pakistan can be stamped with
adhesive stamp, but other promissory notes made in Pakistan cannot be stamped
with adhesive stamp. The provision of section 11 is directory and permissive as
the words used are that the following instruments `may' be stamped with
adhesive stamp. It does not prohibit nor impose. restriction that promissory
notes of any other value cannot be stamped with adhesive stamp. This reasoning
finds support from rule 13 read with Article 49 as amended by the Sindh Finance
Ordinance VI of 1982 which permit fixation of adhesive stamp on promissory
note even in cases where amount exceeds Rs.2,50,000."
In another reported case of Habib Bank Limited v. Chaudhry Cloth House 1991
CLC page 164 the learned Single Bench of this Court has held as under:---
"The expression used in rule 13 of the Rules is `may'. The rule is merely a
permissive one, permitting the use of adhesive stamp on promissory notes
payable on demand when the amount in any other case is rupees ten. The rule
does not lay down that such promissory note shall be stamped with adhesive
Page No. 5 of 8
stamp of the requisite value. The result is that a promissory note in any other
case can be written on a paper having an impressed stamp or it can be stamped
with special adhesive stamps of the requisite value. In my view a promissory
note can be stamped either with special adhesive stamps or adhesive stamps or
engraved on a stamp paper of proper value."
The judgment reported in case of Muhammad Akram v. Khuda Bux 2000 CLC
page 759 dealt with a situation where document affixed with adhesive stamps
were not properly cancelled and was rendered inadmissible in evidence and is
not applicable to the present case.
The other reported case of Farid Akhtar Hadi v. Muhammad Latif Qazi 1988
CLC page 2397 was dealt with a case of grant of leave on the ground that the
document on the basis of which the suit was 'instituted was not a promissory
note, but was a bond, and as such, the suit was not maintainable and leave to
defend was granted, which was challenged in the revision.
The Indian views expressed in the above mentioned reported cases are that in
view of word `may' used in section 11 and rule 14 the c promissory note of any
value can always be written on impressed stamp paper and can be stamped with
adhesive stamps.
In view of the above reported judgment, it is clear that it is not necessary that the
Promissory Note must be affixed with adhesive stamp and a Promissory Note
written on a stamp paper is as good as written on a paper containing adhesive
stamps.
As far as section 35 of the Stamp Act is concerned, the same shall only be pressed
into service when an instrument not duly stamped is produced in evidence. In
this case since I have already held that the promissory note is properly stamped.
Section 35 is not applicable.
Since the suit has been filed under summary chapter of the Civil Procedure
Code, the Order XXXVII sub-rule (2) of rule 2 provides that where the defendant
fails to appear or obtain leave to defend or fulfil the conditions on which the
leave was granted, the contents of the plaint shall be deemed to be admitted and
the plaintiff shall be entitled to a decree. The plaintiff while producing the
promissory note and acknowledgment of debt and undertaking of repayment
has proved that the promissory note was executed against consideration. The
presumption is also in favour of the negotiable instrument that the same was
made and drawn against consideration. There is no rebuttal to the above facts, as
the defendant, in spite of getting opportunity to defend the case, has failed to file
any defence.
In the reported case of Haji Ali Khan and Company v. Allied Bank of Pakistan
Limited PLD 1995 Supreme Court page 362 the Honourable Supreme Court has
held as under:--
Page No. 6 of 8
"It may also be noticed that sub-rule (2) of Rule 2 of the above Order envisages
that if a suit is filed in terms of sub-rule (1), the defendant shall not appear or
defend the suit unless he obtains leave from a Judge as hereinafter provided so to
appear and defend. It further contemplates that in default of his obtaining such
leave or of his appearance and defence in pursuance thereof, the allegations in
the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a
decree in terms of sub-clauses (a), (b) and (c) provided in aforesaid sub-rule (2).
Whereas, sub-rule (3) thereof lays down that a decree passed under the above
rule may be executed forthwith."
In the same judgment the Honourable Supreme Court after considering number
of reported cases has held as under:
"The ratio decidendi of the above-referred cases seems to be that if a defendant

fails to appear or fails to obtain leave to defend in response to a summons served
in Form No.4 provided in Appendix B to the C.P.C. or fails to fulfil the condition
on which leave was granted or where the Court refuses to grant leave, the Court
is to pass a decree. It may further be observed that in sub-rule (2) of rule 2,
C.P.C., it has been provided that if a defendant fails to appear or defaults in
obtaining leave, the allegations in the plaint shall 'be deemed to be admitted and
the plaintiff shall be entitled to a decree, but no such consequences are provided
for in Rule 3 of the above Order in a case where the Court refuses to grant leave
or the defendant fails to fulfil the condition on which leave was granted. In our
view, notwithstanding the above omission in Rule 3, the effect of refusal of the
Court to grant leave to failure on the part of the defendant to comply with the
condition of the leave, will be the same i.e. the defendant shall not be entitled to
defend the suit on any ground and the Court would pass a decree in favour of
the plaintiff."
In view of the above, the plaintiff has proved that the defendant has executed a
promissory note and has failed to repay the amount mentioned in the
promissory note. I have, therefore, no option but to decree the suit of the plaintiff
in the sum of Rs.5,050,000 with interest at the rate of 6% from the date of the suit
till realization of the amount. The defendant is also liable to pay the costs of the
suit to the plaintiff. The office is directed to prepare the decree in the above terms
M.H./B-13/K Suit decreed.
Page No. 7 of 8
P L D 2005 Supreme Court 322
Present: Sardar Muhammad Raza Khan and Falak Sher, JJ
Haji MUHAMMAD SIDDIQUE---Petitioner
versus
Rana MUHAMMAD SARWAR---Respondent
Civil Petition No.3096-L of 2002, decided on 15th February, 2005.
(On appeal from the judgment dated 3-6-2002 passed by the Lahore High Court,
Lahore in Regular First Appeal No.701 of 2001).
----O. XXXVII, R. 3(2)---Constitution of Pakistan (1973), Art. 185(3)--Suit for

recovery of money on the basis of pronote---Grant of leave to defend the
suit---Scope---Provisions of O.XXXVII, R. 3(2), C.P.C. lay down and empower
the Court to grant leave to defend either unconditionally or subject to such terms
as to payment into Court or giving security---Demand of the Court for
furnishing security was thus not unlawful ---Defendant in the present case, had
not objected to the order for furnishing of security by the Court and sought
various adjournments to arrange for the security---Decree, on account of
noncompliance of the order of the Court was rightly passed by the District Judge
and upheld by the High Court---No valid reasons being available to interfere,
Supreme Court dismissed the petition for leave to appeal.
Rao Munawar Khan, Advocate Supreme Court for Petitioner.
Nemo for Respondent.
Date of hearing: 15th February, 2005.
JUDGMENT
Page No. 1 of 2
SARDAR MUHAMMAD RAZA KHAN, J.---Haji Muhammad Siddique seeks
leave to appeal against the judgment and decree dated 3-6-2002 passed by a
learned Division Bench of Lahore High Court' whereby his regular first appeal
against the grant of a money decree of Rs.3,00,000 by learned Additional District
Judge, Okara on 6-6-2001,was dismissed.
2. Rana Muhammad Sarwar, the respondent had filed a suit for the recovery of
Rs.3,00,000 against the petitioner under Order XXXVII, C.P.C. for, the claim was
based on a pronote dated 4-8-1995. The defendant/petitioner was granted leave
to defend and file written statement subject to furnishing security to the tune of
the amount claimed. The defendant sought numerous adjournments for
furnishing the security but failed to do so and hence the suit was decreed on
account of the non-compliance of the conditional leave to defend.
3. The provisions of Order XXXVII, Rule 3 sub-rule (2) of C.P.C. clearly lay down
and empower the Court to grant leave to defend either unconditonally or subject
to such terms as to payment into Court or giving security. The demand of the
Court for furnishing security was thus not unlawful and was even not objected to
by the petitioner/defendant who sought various adjournments to arrange for the
security. In the circumstances, the decree was rightly passed by the learned
Additional District Judge and rightly upheld by the High Court. There being no
valid reason for us to interfere, the petition is hereby dismissed and leave to
appeal refused.
M.B.A./M-224/S' Petition dismissed.
Page No. 2 of 2
2005 C L D 404
[Lahore]
Before Maulvi Anwarul Haq and Sardar Muhammad Aslam, JJ
Messrs FINE TEXTILE INDUSTRIES through Managing Partner and 7

others---Appellants
versus
HABIB BANK LIMTIED, FAISALABAD ---Respondent
R.F.A. No.397 of 2003, decided on 22nd April, 2004.
Financial Institutions (Recovery of Finances) Ordinance, (XL VI of 2001)---
----Ss. 9 & 10---Recovery of bank loan---Conditional grant of leave to defend the

suit---Non fulfilment of condition imposed by Banking Court---High Court acting as
Banking Court allowed application for leave to appear and defend the suit subject to
deposit of certain amount within a specified date---Borrowers did not deposit the
amount, resultantly the leave granting order was withdrawn by the Banking
Court---Validity---Neither before Banking Court, nor before Division Bench of High
Court even a word had been stated by the borrowers as to why the condition imposed by
Banking Court was not complied with---Borrowers also failed to give any reason
whatsoever for the non-compliance of the condition---Judgment and decree passed by
High Court did not have any error of law or fact---Appeal was dismissed in limine.
Mian Ijaz Hussain for Appellants.
Abid Aziz Sheikh for Respondent No. 1.
ORDER
Respondent No. l filed a suit for recovery of Rs.71,196,764.40 against the appellants and
respondent No-2. The appellants were served in the manner prescribed. They put in
appearance and filed an application for grant of leave to defend. In this application
liability .to the extent of Rs.49,350,000, was admitted. Regarding the remaining amount
the contention raised was that the entries in the statement of accounts being relied upon
by the respondent-bank are not correct. The learned Single Judge granted leave to appear
and defend the suit subject to deposit of Rs.49,350,000. This was done vide order dated
24-4-2003 and deposit was directed to be made up to 24-6-2002. Admittedly the deposit
Page No. 1 of 2
was not made. Learned Single Judge finding that the condition for grant of leave to
defend having not been fulfilled, withdrew the same and decreed the suit in the sum of
Rs.59,330,637. The records were examined and claim of the respondent-Bank to the
extent of Rs.11,866,127.04 was disallowed. This was done vide judgment and decree
dated 16-7-2003.
2. Learned counsel for the appellants contends that his clients were and are willing to pay
the decretal amount provided reasonable instalments are fixed. He has also tried to
demonstrate that the entries in the statement of accounts are wrong and that mark-up has
been added. Learned counsel for the respondent-Bank contends that initial finance
facility and availing thereof stands admitted. He has taken us through the statement of
accounts to demonstrate that there is no compounding of the mark-up.
3. We have given some thought to the contentions of the learned counsel for the
appellants. We have already noted above that the leave was withdrawn by the learned
Single Judge on the ground that the condition imposed had not been complied with. Now
we find that neither before the learned Single Judge and certainly not before us even a
word has been stated as to why the condition was not complied with, as to whether there
is any reason, sufficient or otherwise, for the same. This being so, no error of law or fact
is to be found in the impugned judgment and decree.
4. So far as the said contentions of learned counsel for the appellants are concerned, the
same can be taken care of after consideration by the learned Single Judge who is
presently executing the decree. Learned counsel for the respondent also states that earlier
offer made was for payment of the decretal amount in the instalments of Rs.5,00,000 per
month which according to the learned counsel for respondent is not a feasible proposal.
Learned counsel for the appellants states that he will be in a position to make a better
proposal. If such a proposal is made the same may be considered by the learned Single
Judge subject of course, to any objection by the respondent.
With these observations, this R.F.A. is dismissed in limine.
M. H. / F-31 / L Appeal dismissed.
Page No. 2 of 2
1986 M L D 1037
[Lahore]
Before C.A. Rehman and Akhtar Haaan, JJ
BOOTH and others--Appellants
Versus
DOST MUHAMMAD—Respondent
Regular First Appeal No. 55 of 1984, decided on 11th March 1986.
(a) Punjab Pre-emption Act (I of 1913)--
---S.4--Appeal--Pre-emption suit 'decreed subject to deposit of purchase money within

one month--Condition not complied with--No order of Court permitting deposit of
purchase money after expiry of prescribed period-Non-compliance of condition of
decree, held, would result in dismissal of suit.
(b) Civil Procedure Code (V of 1908)—
---S. 96--Punjab Pre-emption Act (I of 1913), S.4--Appeal--Pre-emption

suit--Waiver--Purchase money deposited after expiry of prescribed period accepted by
respondent--Conduct of parties, held, would not result in waiver of condition imposed by
Court and save suit from dismissal in terms of decree--Consequences which were to
follow non-compliance of condition could not be stopped by conduct of parties.
(c) Punjab Pre-emption Act (I of 1913)--
---Ss. 4 a 21--Civil Procedure Code (VI of 1908), S.96 & 115--Right of pre-emption-
-Deposit of pre-emption money after expiry of period-Forum for determination of
consequences of non-deposit--Trial Court, held, would be proper forum to examine and
give finding whether sit of purchase money by pre-emptor, after expiry of period fixed
by Court, was proper.
(d) Civil Procedure Code (V of 1908)--

Page No. 1 of 5
---S.96--Punjab Pre-emption Act (I of 1913), S.4--Pre-emption suit--New plea--Plea
that failing suit transaction in favour of appellant should be treated as
sale--Appeal--Position not taken in, pleadings--Held, appellants could not be permitted
in appeal to take up any new post on dependent upon determination of certain facts.
Ch. Imtiaz Ahmad for Appellant.
Muhammad Akram Ranjha for Respondent.
Date of hearing: 18th February, 1986.
JUDGMENT
AKHTAR HASAN, J.--This Regular First Appeal is directed against the decree, dated
29-4-1984 of the learned Civil Judge Ist Class Sargodha, whereby the respondent Dost
Muhammad's rival suit for pre-emption was allowed while the confessional decree, dated
27'7-1982 passed in favour of the appellant Boota as son of the vendor was ruled out to
be ineffective on the ground of being collusive.
2. The impugned sale was finalized through the decree dated 13-7-1981 based upon an
award. The respondent Dost Muhammad filed his suit on 12-7-1982 on the qualification
of being a collateral of the vendor. On the other side the appellant Boota too brought a
suit to pre-empt the sale as the vendor's son and obtained the decree, dated 27-7-1982 on
the vendee's confession. He was then rivally impleaded in the present suit though the plea
taken was that not only his decree was bad being collusive but also his very suit stood
dismissed because of his failure to deposit the pre-emption amount within the period of
one month fixed in the decree.
3. The suit was resisted both by the vendee as also the appellant denying the collusive
nature of the decree obtained by him. Instead they claimed that it had been passed in
assertion of comparatively better right of the appellant as son of the vendor. Valuation of
the suit for Court-fee and jurisdiction was assailed. Waiver too was pleaded against the
respondent /rival pre-emptor. The following issues were framed by the learned trial
Court:-
(1) Whether the suit is incorrectly valued for the purposes of Court-fee and jurisdiction?
If so, what is the correct valuation and with what effect? OPD.
(2) Whether the suit is barred by time? OPD.
Page No. 2 of 5
(3) Whether the plaintiff is estopped by his act and conduct to bring the suit? OPD.
(4) Whether the plaintiff waived his right of pre-emption? OPD.
(5) Whether the plaintiff has superior right of pre-emption as against the defendant No.1?
OPD.
(6) Whether decree got by defendant No.2 against defendant No.1, dated 27-7-1982 is
illegal and ineffective against the right of the plaintiff for the reason stated in para 7 of
the amended plaint? OPP.
(7) In case the suit is decreed, whether the defendant No.1 is entitled to recover charges
as claimed in preliminary objection No.5 of the written statement? OPD. .
(8) Relief.
After considering the evidence produced by the parties in support of their respective
contentions the learned trial Court decided Issues Nos.1 to 4 and 7 against the appellant
and Shera respondent No.2 and issues Nos. 5 and 6 in favour of Dost Muhammad
respondent No.1. As a result of the above findings decree for possession through
pre-emption of land measuring 79 Kanals 10 Marlas situated in village Devwal, Tehsil
Bhalwal, District Sargodha, was passed in favour of Dost Muhammad respondent on
payment of Rs.70,000 as purchase money.
4. Although the appellant has assailed the findings of the learned trial Court under Issues
Nos. 1, 2 and 6 in the Memo. of Appeal the learned counsel for the appellant has confined
his arguments to the finding under issue No.6 at the time of hearing of the appeal.
5. Learned counsel for the appellant has contended that the view taken by the learned trial
Court that the decree passed in favour of the. appellant had ceased to exist and that the
appellant's suit should be dismissed for non-compliance with the, condition regarding
deposit of the purchase money is not correct. The appellant could not deposit the
purchase money on 27-8-1982 on the expiry of the period fixed in the decree because.
the Court was closed on account of summer vacation. It was on re-opening of the Court
that the amount was deposited on 7-9-1982 under the order of the Court. Learned
counsel has in this connection referred to the statement of Ali Ijaz, Naib Nazir, Bhalwal,
who was examined as P.W.1 by Dost Muhammad respondent. He deposed that the
purchase money was deposited by the appellant on 7-9-1982 and that the same was paid
to Shera respondent on 9-9-1982. According to the learned counsel it was the vendee,
who alone could be benefited by the dismissal of the appellant's suit, but he did not raise
any objection against the belated deposit of purchase money. On the other hand, as stated
by P.W.1, he had received the pre-emption money from the Court on 9-9-1982 and thus
by his conduct had waived the "n-compliance of the condition regarding deposit of
pre-emption money within one month from the date of passing of the decree. Learned
counsel has further contended that the decree passed in favour of the appellant had been
implemented by receipt of the pre-emption money by Shera respondent and so it was no
longer open to the learned trial Court to hold the aforesaid decree as illegal, void and
Page No. 3 of 5
collusive. Lastly, it has been argued by the learned counsel that acceptance of the
purchase money by the Court after the expiry of period prescribed in the decree could not
be questioned on the ground that the Court had acted without jurisdiction because the
above action of the Court was not challenged either in appeal or in revision by any
aggrieved party.
6. We have carefully considered the arguments of the learned counsel for the appellant.
We find ourselves unable to agree with the proposition that non-compliance with the
condition regarding deposit of purchase money within one month from the date of decree
had not resulted in the dismissal of the appellant's suit. The appellant has failed to place
copy of any order passed by the Court whereby he was permitted t deposit the purchase
money after the expiry-of the prescribed period. The mere fact that the appellant had
deposited the purchase money on 7-9-1982 and entry to that effect had been made in the
relevant register of the Court does not lead to the conclusion that the deposit was made
under order of the Court. The statement of Ali Ijaz P.W.1 that the amount deposited on
7-9-1982 also included the amount of Zar-e-Panjum, which normally should have been
deposited by the appellant before the decision of the suit, also makes it highly doubtful
that the Court had passed any order permitting the appellant to deposit Zar-e-Panjum and
the purchase money after the time specified in the decree had expired. The above
statement also indicates the collusive nature of the litigation in which the decree relied
upon by the appellant was passed. It is not possible to accept the contention of the learned
counsel for the appellant that by the acceptance of purchase money after the period
specified in the decree had expired Shera respondent had waived the condition and had
thus saved the appellant's suit from being dismissed in terms of the decree because the
condition was imposed by the Court and the consequences which were to follow on
account of its non-compliance, could not be stopped by the conduct of the parties. There
is also n force in the contention of the learned counsel for the appellant that the deposit of
purchase money by the appellant after the expiry of the period specified in the decree
could be questioned only in appeal or in revision because one of the issues which
required determination in the suit, out of which this appeal has arisen, was whether the
decrees passed in favour of the appellant was legal and enforceable so as t defeat the rival
pre-emptor's suit and so it was for the trial Court t examine and give its finding whether
the deposit of purchase money b the appellant after the expire of the period fixed by the
Court granting the decree was proper.
7. Learned counsel for the appellant has contended in the alternative that even if the
decree or for that matter the appellant's suit failed the transaction made in his favour may
be treated as sale and being within the period of six years as held by the trial Court to be
applicable, he could defeat the respondent's suit on the strength of his being a son of the
vendor. We regret we are unable to subscribe to this view, for, it had not been specifically
taken up in the pleadings where the appellant as also the vendee in a complementary
method supported each other in maintaining that only a decree in pursuance of the suit for
pre-emption of the appellant had been passed in his favour. They did not aver if they had
entered into a sale in its simpler form without the need of the decree confessed in favour
of the appellant. If, therefore, the decree fails, they cannot be permitted to take up any
other position especially when it is dependent upon determination of certain fact D e.g.
payment of consideration amount etc. etc. The respondent cannot be taken by surprise
and, therefore, the appellant had to sail or sin on the strength of the decree which he
obtained with considerable contrivance. Failure to deposit the amount also partakes the
failure to the payment of consideration even for the alleged sale and on this ground too,
the appellant's plea has no force. The Regular First Appeal is dismissed leaving the
parties to bear their own costs.
S.A. Appeal dismissed.
Page No. 4 of 5
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2008 C L D 1343

Before Nadeem Azhar Siddiqi, J

ERIDANIA (SUISSE) SA---Petitioner

RAJBY INTERNATIONAL (PVT.) LTD.---Respondent

J.M. No.24 of 2007, decided on 15th September, 2008.

(b) Companies Ordinance (XLVII of 1984)---

----Ss.305, 306(a) & 314(1)---Winding up of company---Failure to pay debt---

Salman Talibuddin for Petitioner.

Shaiq Usmani for Respondent.

Date of hearing: 15th September, 2008.

The petition is allowed in the above terms.

M.H./E-9/K Petition allowed.

Before Nadeem Azhar Siddiqi, J

FAYSAL BANK LTD. through Attorneys-Petitioner

SOUTHERN NETWORKS LTD.---Respondent

J.M. No.13 of 2007, decided on 16th September, 2008.

(a) Companies Ordinance (XLVII of 1984)---

----S.305---Winding up of company---Object---Conditional order---Duty of Court---

(b) Companies Ordinance (XLVII of 1984)---

----Ss.305, 306(a) & 314(1)---Winding up of company---Failure to repay debts---

Arshad Tayebally for Petitioner.

Nemo for Respondent.

Date of hearing: 16th September, 2008.

NADEEM AZHAR SIDDIQI, J.---This is a petition under sections 305/321 of the

(iv) cost of the petition."

The petition is disposed of in the above terms.

M.H./F-48/K Order accordingly.

Before Mian Saqib Nisar, J

AMIR AYYUB and 4 others---Respondents

F.A.O. No.58 of 2005, heard on 10th May, 2006.

Specific Relief Act (I of 1877)---

----S.12---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Interim injunction,

Mian Zafar Iqbal Kalanauri for Appellant.

Jahangir A. Johja for Respondents.

Date of hearing: 10th May, 2006.

M.H./M-277/L Appeal allowed.

Before Ch. Ijaz Ahmad and Mian Hamid Farooq, JJ

Messrs SHAHEEN PUMPS (PVT.) LTD. through Chief Executive---Appellant

Messrs BEACON ENGINEERING INDUSTRY through Proprietor and another---

Regular First Appeal No.268 of 2003, heard on 19th January, 2004.

(a) Civil Procedure Code (V of 1908)---

(b) Civil Procedure Code (V of 1908)---

----O.XXXVII, R.3(2)---Suit for recovery of money on the basis of dishonoured

(c) Civil Procedure Code (V of 1908)---

----O.XXXVII, R.2(2)(a)---Negotiable Instruments Act (XXVI of 1881), S.79---Suit for

Muhammad Ibrahim for Appellant.

Rana Farman Ali Sabir for Respondents.

Date of hearing: 19th January, 2004.

4. To our mind, pivotal questions, to be determined in the present appeal, are as to

M.I./S-32/L Appeal dismissed.

Before Nadeem Azhar Siddiqui, J

Messrs BAHRIA FOUNDATION, KARACHI---Plaintiffs

ABDUL ALEEM BUTT---Defendant

Civil Suit,No.1110 of 2001, decided on 13th June, 2006.

(a) Civil Procedure Code (V of 1908)---

(b) Stamp Act (II of 1899)---

--S. 11---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Promissory note written

(c) Civil Procedure Code (V of 1908)---

Yasin Azad for Plaintiff.

Date of hearing: 1st June, 2006.

NADEEM AZHAR SIDDIQI, J.---This is a suit for recovery of Rs.5,050,000 under

(I) Naeem Iqbal v. Mst. Zarina 1996 SCMR page 1530.

(1) Muhammad Akram v. Khuda Bux 2000 CLC page 759.