Pakistan Case Law
2009 CLD 1313

Malik LIAQAT ALI vs MUHAMMAD SHARIF

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Citation2009 CLD 1313
CourtLahore High Court
Case No.Regular First Appeal No,279 of 2002 Appeal No,279 of 2002 R.F.A. No,15 of
Date2009-04-28
Judge(s)S. Ali Hassan Rizvi and Muhammad Ashraf Bhatti
Authored byS. Ali Hassan Rizvi
ResultAppeal dismissed
AI Summary — generated from this judgment; read the full text below and verify before relying on it.

This Regular First Appeal arose from a suit for recovery of Rs. 2,50,000 based on a promissory note, filed under the summary procedure of the Code of Civil Procedure 1908. The defendant admitted executing the promissory note but contended it was provided as security for a committee payment, not for a loan, and alleged the suit was fraudulent. The core legal question concerned the burden of proof regarding the consideration of a promissory note once its execution is admitted or proved. The Lahore High Court held that once the plaintiff proves the execution of a promissory note, the burden shifts to the defendant to prove the want of consideration, as per the presumption under the Negotiable Instruments Act 1881. The Court found the defendant failed to substantiate his claim that the instrument was merely security. The key principle laid down is that while the burden of proof shifts between parties during trial, once execution is established, the statutory presumption of consideration applies, and the defendant must provide credible evidence to rebut it; furthermore, oral evidence contradicting the terms of a written document is inadmissible.

Questions settled in this judgment
  • Does the burden of proof shift to the defendant to prove want of consideration once the execution of a promissory note is proved?
  • Can oral evidence be admitted to contradict the terms of a written contract once the document is proved?
  • Does the burden of proof in civil matters remain constant throughout the trial?
Laws & provisions referred
  • Order XXXVII Rule 1, Code of Civil Procedure 1908
  • Section 35-A, Code of Civil Procedure 1908
  • Section 118(a), Negotiable Instruments Act 1881
  • Article 102, Qanun-e-Shahadat Order 1984
  • Article 103, Qanun-e-Shahadat Order 1984
promissory noteburden of proofnegotiable instrumentwant of considerationsummary suitrecovery of moneypresumption of consideration

' S. ALI HASSAN RIZVI, J.---Muhammad Sharif respondent/plaintiff had on 8-5-2007 filed a suit under Order XXXVII, rule 1, C.P.C. Against Malik Liaqat Ali appellant/ defendant for recovery of Rs,2,50,000 on the basis of Promissory Note dated 29-5-1999 which according to the plaint was written for repayment of "Qarz-i-Hasna".

2. The appellant/defendant after obtaining leave to appear and defend the suit submitted his written statement on 12-9-2001. Under preliminary objections, it was claimed that the suit was false and vexatious; that the plaintiff/respondent had not come to Court with clean hands; that the alleged promissory note was baseless and without consideration and that the appellant/defendant was entitled to special costs under section 35-A of C.P.C.

3. On facts, it was stated that the defendant/appellant had never borrowed any money from the plaintiff/respondent; that there was a Lucky Committee comprising 500 members; that at the end, some amount of 37 members was due; that the plaintiff/respondent was leader of the members; that a Punchayat was held on 1-8-2000 in which it was settled that if he (the defendant) did not pay the amount, the plaintiff/respondent would pay the same; and that he (the defendant) had signed the blank promissory note on the understanding that it was being given as security.

4. The trial proceeded on the following issues as framed on 12-9-2001:-- "Issues:

(1) Whether the plaintiff is entitled for the recovery of Rs,2,50,000 on the basis of pro-note dated 29- 5-1999 from the plaintiff? OPP

(2) Whether the suit is based on mala fide intention and has been filed to harass the defendant?

OPD

(3) Whether the plaintiff has not come to the Court with clean hands, therefore, the suit is liable to be dismissed? OPD

(4) Whether the suit of the plaintiff is baseless, without consideration and the defendant is entitled for the special costs under section 35-A, C.P.C.? OPD

(5) Whether the pro note in dispute was handed over to the plaintiff by the defendant as security for the payment of committee and the defendant has paid the said amount of committee to the members of the committee? OPD

(6) Whether the suit is in result of fraud and cheating against the defendant? OPD

(7) Relief."

5. On conclusion of the trial, the learned Additional District Judge, Okara vide his judgment dated 2- 3-2002 decreed the suit.

6. The aforementioned judgment/decree dated 20-3-2002 have been challenged in this Regular First Appeal.

7. We have heard the learned counsel for the parties and gone through the record.

8. Issues Nos. 1 and 5 are crucial and are also inter dependent. These are, therefore, taken up together.

9. Issues Nos.1 and 5. In the course of evidence, the plaintiff/respondent examined Haji Sardar Ahmad P.W.1, Haji Khushi Muhammad P.W.2, Haji Muhammad Ahmad P.W.3 and he (the plaintiff) himself appeared as P.W.4. The pro note and receipt were produced as Exh.P.1 and Exh.2 respectively.

10. On the other hand, the defendant/appellant himself appeared as D.W.2. He examined Haji Sardar Muhammad D.W.1 and Jamil Ahmad D.W.3.

11. All the P.Ws consistently testified the execution and correctness of the pro note Exh.P.1 and the receipt Exh.P.2.

12. The defendant/appellant in his pleadings as also appearing as D.W.2 had admitted the execution of the pro note Exh.P.1 and the receipt Exh.P.2. Once the plaintiff/respondent had succeeded in proving the execution of pro note, the burden shifted on the defendant/appellant to prove want of consideration in view of the presumption provided under section 118(a) of the Negotiation Instrument Act. The burden could be discharged either by leading evidence by the defendant/appellant or relying on the evidence of plaintiff/ respondent, which may be contrary to the aforementioned presumption. Reliance may be placed on Mst. Sughran Begum another v. Haji Meer Qadir Bakhsh another PLD 1986 Quetta 232. In an unreported judgment dated 14-4-2009 rendered by a Division Bench of this Court in R.F.A. No,15 of 2003, the aforementioned rule was followed.

12(sic). Articles 102 and 103 of Qanun-e-Shahadat Order, 1984 were to the effect that when terms of any contract relating to disposition of any property reduced to form of a document, is proved, no evidence contrary to its contents would be admitted as between the parties or their representatives in interest. In the present case, the execution of the pro note Exh.P.1 and the receipt Exh.P.2 stood proved to the satisfaction of the Court. It was also proved that the aforementioned documents were handed over by the defendant/appellant to the plaintiff/ respondent. However, there is absolutely no evidence worth reliance to hold that those documents were written as security for the payment of amount of committee or that the defendant/ appellant had paid the amount of the committee to 37 members thereof. The defendant/appellant tried to embellish his case as D.W.2. D.W.1 Haji Sardar Ahmad and Jamil D.W.3 had no direct knowledge as to the background in which the aforementioned documents i,e, pro note Exh.P.1 and the receipt Exh.P.2 were executed. The evidence led by the plaintiff/ respondent outweighed the evidence as led by the defendant/ appellant on all material particulars.

13. The argument of learned counsel for the appellant/ defendant that at all events, burden of proving the due execution of the pro note Exh.P.1 and the receipt Exh.P.2 remained on the plaintiff/respondent and that it never shifted on to the appellant/defendant, is totally misconceived. At the risk of repetition, it is observed that burden of proof in civil matters never remains constant. On the other hand, it remains on being shifted from one party to another. Even otherwise, when entire evidence is recorded, burden of proof would lose its importance. In the present case, the plaintiff/respondent had proved his case to the hilt and the rickety angles set up by the defendant/appellant in his written statement, could not be improved during evidence.

Rather his evidence, re-enforced the claim of the plaintiff/respondent. We, therefore, uphold the findings as recorded by the learned trial Court on Issues Nos.1 and 5.

14. Issues Nos.2, 3 and 4. In view of our findings recorded on Issues Nos.1 and 5, the suit of the plaintiff/respondent could not be dubbed as mala fide. He could not be held to have come to Court with unclean hands. His suit was based on due consideration. Consequently, there was no occasion for awarding special costs in terms of section 35-A, C.P.C. These three issues are also decided against the appellant/defendant and in favour of the plaintiff/respondent.

15. As to Issue No,6 it may be mentioned that the plaintiff/respondent has proved his case to the satisfaction of the Court. Conversely, the defendant/appellant has miserably failed to prove that the suit suffered from any fraud or cheating. No convincing evidence was led by him in this behalf.

This issue is, therefore, decided against the defendant/appellant and in favour of the plaintiff/respondent.

16. Resultantly, we find no merit in this RFA. The same is, therefore, dismissed with costs.

Cited by 3 cases

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