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Regular First Appeal No. 53 of 1982, decided on 17th January, 1987.
‑‑‑S. 19‑‑Civil Procedure Code (V of 1908), O. XXXVII, R.3‑‑Suit on promissory note‑‑Leave to defend‑‑Respondent contending that execution of promissory note by appellant did not constitute acknowledgment of his previous debt and in any case such an alleged acknowledgment occurred after recovery of debt had become time‑barred and, therefore, respondent could not take any benefit, therefore, for enlarging period of limitation for bringing suit‑‑Point constituting a substantial question of law and plausible defence to suit appellant, held, was entitled to be given leave to defend suit‑‑Impugned order Trial Court to the contrary, was not legally justifiable and could not stand test of scrutiny‑‑Appeal accepted, impugned judgment and decree set aside case remanded for fresh trial and decision and appellant given leave to defend suit on his furnishing security.
Ghulam Murtaz v. Mst. Fasiunnissa Bibi A I R 1935 All. 129 and Fine Textile Mills Limited, Karachi v. Haji Umar P L D 1963 S C 163 ref.
Ch. Khurshid Ahmad for Appellant.
Nemo for Respondent.
Date of hearing: 18th January, 1987.
This appeal is directed against the order of the learned Special Court Banking, Lahore, dated the 1st March, 1982, refusing to grant leave to the appellant to defend the suit brought by the respondent under Order XXXVII of the Code of Civil Procedure for the recovery of outstanding debt amounting to Rs.2,68,617.99 and consequently decreeing the suit. The respondent, Habib Bank Limited, Lahore, alleged that it had received the appellant's documents for collection of price of goods exported by him from the United States of America and had advanced him loan of Rs.1,80,165 against the foreign bills. According to the respondent the documents were not retired and on the appellant's request his goods were sold and sale proceeds (Rs.73,211) were adjusted in his account on the 26th September, 1975. The respondent averred that the appellant had executed promissory note on the 30th October, 1979, in confirmation and acknowledgment of his liability of the debt. As the appellant failed to repay the loan the respondent instituted suit on the 3rd December, 1980, for the recovery thereof.
2. In his application under Order XXXVII, Rule 3 of the Code soliciting leave to defend the suit the appellant, besides raising other points took the pleas that the suit was time‑barred, that it was the respondent's duty to collect the price of goods exported to the United States of America and that it had received a considerable amount from the consignee who had duly received the goods. However, the learned trial Court was not inclined to grant leave because it thought that the suit was within time and that the respondent's claim was in order.
3. The respondent despite proper service of notice chose not to enter appearance. Therefore, the appeal was heard ex parte against it.
4. Relying upon what has been laid down in Ghulam Murtaza v. Mst. Fasiunnissa Bibi A I R 1935 All. 129, the learned counsel for the respondent contended that the execution of the promissory note by the appellant on the 30th October, 1979, did not constitute acknowledgment of his previous debt and in any case such an alleged acknowledgment occurred after the recovery of debt had become time‑barred and, therefore, the respondent could not take any benefit thereof for enlarging the period of limitation for bringing the suit. He submitted that in view of such an important question raised by the appellant the learned trial Court ought to have in face of what had been laid sown by the Supreme Court of Pakistan in Fine Textile Mills Limited; Karachi v. Haji Umar P L D 1963 S C 163, granted leave to the appellant. This point constituted a substantial question of law and plausible defence to the suit. Therefore, the appellant was entitled to be given leave to defend the suit. The impugned order of the learned trial Court to the contrary is not legally justifiable and cannot stand the test of scrutiny by this Court. The appeal is accordingly accepted, the impugned judgment and decree are set aside and the suit is remanded to the learned Special Court Banking for fresh trial and decision according to law. The appellant is given leave to defend the suit on his furnishing security of immovable property in the sum of Rs.2,68,617.99 to the satisfaction of the learned trial Court within a month. The appellant has been directed to appear before the learned trial Court on the 2nd February, 1987. The appellant will bear his own costs of the appeal.
S.Q./M‑6/L Appeal accepted.
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