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Civil Petition for Special Leave to Appeal No. K. 26 of 1973, decided on 2nd March 1973.
(On appeal from the judgment and order of the High Court of Sind & Baluchistan, dated 17‑I 1‑1972 passed in Suit No. 235 of 1972).
---O. XXXVII, r. 3 and Negotiable Instruments Act (XXVI of 1881), S. 118‑Summary suits on negotiable instruments‑Signatures on instruments not denied but allegations made against plaintiff about manner in which promissory notes manipulated‑Held, initial presumption arises under S. 118 of Act XXVI of 1881, of instrument being made, drawn, ac cepted or endorsed for consideration‑Presumption although rebut table yet onus lies on person denying consideration to prove same Court justified in imposing, on defendant, condition while granting leave to defend suit that amount in suit be deposited in Court or security furnished in lieu thereof.
N. A. Farooqi, Advocate instructed by Vakil Ahmad Kidwai, Advocate‑on‑Record for Petitioner.
Nemo for Respondent.
Date of hearing : 2nd March 1973.
This petition is barred by nine days. , The delay is sought to be explained by saying that the learned counsel for the petitioner had mis‑calculated the period permis sible under the law as spent in obtaining copies etc. We would condone delay, subject to all just exceptions, and proceed to consider the petition on merits.
In a suit for recovery of Rs. 1,23,250 under Order XXXVII of the Code of Civil Procedure on the basis of two promissory notes, each dated the 8th of June 1970, for Rs. 50,000, the present petitioners, as defendants were granted leave to appear and defend the suit, subject to the condition that the amount in suit is deposited in Court or security is furnished in lieu thereof within one month from the date of the order.
The petitioners are aggrieved by the terms imposed by the High Court, and it is submitted on their behalf that the facts surrounding the execution of the two pronotes and the alleged advancing of the loans are such that unconditional leave to defend should have been allowed. In support of these submissions reliance is placed on Fine Textile Mills Ltd., Karachi v. Haji Umar (P L D 1963 S C 163) and Rule 3 of Order XXXVII of the Code of Civil Procedure, which is in the following terms :
"3.‑(1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.
(2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit.
" It will be seen that once the Court is satisfied that the defen dant ought to be granted leave to appear and to defend the suit it has discretion to grant leave unconditionally or subject to such terms as it thinks fit. The decision relied upon by the learned counsel for the petitioners deals mainly with the principles which ought to guide the Court in granting leave to defend. It can, however, be indirectly inferred that unconditional leave might be granted where the defence appears to be incontrovertible. Now in the present case, although the allegations are made against the plaintiff and the manner in which he manipulated the two promissory notes, yet signatures on these documents are not denied. Under section 118 of the Negotiable Instruments Act, 1881, there is an initial presumption that a negotiable instrument is made, drawn, accepted or endorsed for consideration. Although this presumption is a rebuttable presumption, yet the onus is on the person denying consideration to allege and prove the same. In the present state of the record, we are not at all able to say that the presumption attaching to the two promissory notes under section 118 aforesaid stands rebutted. In these circum stances, the High Court was clearly right in imposing terms on the two defendants.
The petition, therefore, fails and is hereby dismissed.
Leave refused.
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