Sh. MUHAMMAD IRFAN and others vs SITARA COMMISSION SHOP and others
This petition for leave to appeal challenged a judgment of the Lahore High Court, which upheld a trial court decree for the recovery of money based on two cheques. The petitioners, directors of a limited company, argued that the suit was not maintainable because the company itself was not impleaded as a party, despite the suit being filed against them personally. The core legal question was whether a suit for recovery based on cheques is maintainable against directors without impleading the company as a separate legal entity, particularly when the directors have admitted liability. The Supreme Court held that the petitioners had admitted the issuance of the cheques and their personal responsibility. Furthermore, the conditional leave to defend granted by the trial court had already attained finality. The Court determined that the failure to implead the company was not fatal to the suit under these circumstances. Consequently, the Court dismissed the petition, affirming that the petitioners could not escape liability for admitted debts based on technical objections regarding the non-joinder of the company.
- Is a suit for recovery based on cheques maintainable against directors of a company without impleading the company itself?
- Can a defendant challenge the maintainability of a suit after failing to comply with a conditional leave to defend order?
- Does the admission of liability through the issuance of cheques preclude a defense based on the non-joinder of a company?
- Order XXXVII Rule 1, Code of Civil Procedure 1908
- Order XXXVII Rule 2, Code of Civil Procedure 1908
- Section 151, Code of Civil Procedure 1908
- Companies Ordinance 1984
1. ' TANVIR AHMED KHAN, J.--- Leave to appeal is sought against the judgment dated 1-4-2002 of a learned Division Bench of the Lahore High Court, Multan Bench, Multan, whereby R.F.A. No,384 of .2001 filed by the petitioners was dismissed maintaining the earlier judgment dated 11-10-2001 of the learned Additional District Judge, Sahiwal decreeing the suit of the respondents.
2. ' Briefly stated facts of the case are that the respondents filed a suit for recovery of Rs,14,09,872 under Order XXXVII, rules 1 and 2, C.P.C. Read with section 151, C.P.C. On the basis of two cheques in the Court of learned District Judge, Sahiwal, on 24-3-2001. The same was entrusted to the Court of learned Additional District Judge, Sahiwal. An application for leave to appear and defend the suit was filed by the petitioners seeking un-conditional leave to defend the suit. The learned Additional District Judge, Sahiwal, vide his judgment dated 30-6-2001 granted leave to defend to the petitioners subject to furnishing Bank guarantee to the extent of half of the amount i,e, Rs,7,04,936 and surety bonds for the remaining sum.
3. ' The petitioners, feeling aggrieved by the above leave granting order, filed Civil Revision No,711 of 2001 before the Lahore High Court at Multan on 23-7-2001 and a learned Judge of the High Court dismissed the same on the ground that this Court had already upheld the conditional leave granting ordei through its judgment reported in the case of Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim 1999 SCM R 2832.
4. ' The learned Additional District Judge, Sahiwal, thereafter decreed the suit on 11-10-2001 for a sum of Rs,14,00,000 as, according to him, the suit amount had been admitted by the petitioners through two cheques and the respondents had claimed Rs,9,872 in excess of the above said amount.
5. ' The petitioners assailed the aforesaid judgment dated 11-10-2001 of the learned Additional District Judge, Sahiwal, before the Lahore ,High Court at Multan, which has been dismissed by a learned Division Bench through judgment dated 1-4-2002, impugned herein. Hence, this petition for leave to appeal.
6. ' Learned counsel for the petitioners has argued that as the Company Messrs Chamba Model Industries Private Limited which issued the disputed cheques, is a juristic person registered under the Companies Ordinance, 1984, as such without impleading it as a party the suit was not maintainable simply against the Directors of the Company.
7. ' We have considered the contention raised above by the learned counsel for the petitioners and have gone through the documents appended with this petition. It is reflected from the perusal thereof that the petitioners had not denied the issuance of two cheques amounting to Rs,14, 00,000.
8. The petitioners are admittedly the Directors/shareholders of Messrs Chamba Model Industries Private Limited and the conditional leave granting order by the learned Banking Judge was even upheld by the High Court while dismissing the revision petition filed by the petitioners, as such the same had attained finality. The non-mentioning of the name of the petitioners' Company is not fatal, as already stated, the petitioners had admitted their responsibility. Even if that be so, the question of maintainability could have been objected to after abiding by the leave granting order.
9. In these circumstances, no illegality has been committed by the learned Judges of the High Court in maintaining the earlier judgment/decree dated 30-6-2001 of the learned Additional Distiict Judge, Sahiwal.
10. ' Resultantly, for what has been stated above, the instant petition being without any force is dismissed and leave declined.