U. B. L. Versus MUHAMMAD KHAN

MUHAMMAD ASADULLAH, J.‑‑The appellant filed a suit under Order XXXVII of the C.P.C. for recovery of Rs.4,803 alongwith interest and costs against the respondents alleging that the loan amounting to Rs.2,962 had been obtained by respondent No.1 and its payment had been guaranteed by respondent No.2 but the same remained unpaid and with the addition of interest the amount ' due from the respondents by the time of the institution of the suit rose to Rs.4,803. Respondent No.1 did not appear after service and was proceeded against ex-parte. Although respondent No.2 contested the case yet it was found that he had failed to substantiate his case. Therefore, the learned District Judge, Mianwali, vide order dated 4‑3‑1982 decreed the suit (ex parte against respondent No.1). Respondent No.1 filed an application under section 12(2), C.P.C. on 27‑11‑1982 for setting aside the ex-parte decree alleging that he was not duly served and he came to know of the ex parte decree only about 15 days before the filing of the said application. The application was resisted by the appellant. However, after recording evidence the learned trial Court set aside ex parte decree vide order dated 13‑2‑1983. The respondents then sought leave to defend the suit which was allowed by the learned trial Court vide order dated 8‑5‑1983. Respondent No.1 resisted the suit on the ground that he had never obtained any loan and that if any amount was obtained from the Bank that was obtained by respondent No.2. The latter, however, alleged that he never obtained any loan but he signed some paper on the asking of respondent No. 1 just as a witness and not as a guarantor. Respondent No.2 also pleaded that the pronote on which the suit was based bore Revenue stamps which had not been cancelled according to law and the pronote, therefore, was not admissible in evidence. On the pleadings of the parties the following issues were framed:

(1) ?????? Whether the suit is incompetent in its present form and particularly due to the non‑cancellation of stamps? OPD No.2.

(2) ?????? Whether defendant No.2 stood 'surety for the re‑payment of the loan?

(3) ??? ?? Whether defendant No.1 obtained the loan and executed promote and is bound to make the payment of the loan?

(4) Relief.

Issue No.1 was treated as preliminary issue and was decided against the appellant. The learned Additional District Judge I, Mianwali, as a consequence, dismissed the suit vide judgment and decree dated 22‑12‑1983. This appeal has been filed to challenge the said judgment and decree. We have perused the record and have heard arguments.

2. The learned counsel for the appellant has contended that the ex parte decree passed on 4‑3‑1982 was wrongly set aside by the learned 'trial Court, vide order dated 13‑2‑1983 because no proper application for setting aside the same was made and because the same was time‑barred. He also contends that no cogent evidence was produced to prove that respondent No.1 was not duly served. The application for setting aside of the ex parte decree has been made under section 12(2), C.P.C. Whole of the body of the application shows that the application was not, in fact, made under the said section but was made for setting aside the ex parte decree. From the application filed under section 5 of the Limitation Act, 190.8, alongwith the said application, for condonation of delay, it is clear that the application in fact, was filed for the setting aside of ex parte decree. There can be no dispute that wrong quotation, of law in the heading of such an application cannot adversely affect the case of an applicant. Therefore, simply because section 12(2) C.P.C. was quoted on the said application, it cannot be said that no proper application for setting aside of an ex parte decree was made. The learned trial 'Court on The questions of fact relating to the service of respondent No.2 and his knowledge about the decree has given a finding on the, basis of the evidence produced before it that he had not been duly served and that he came to know of the decree as alleged by him ? There are no reasons to disagree with the said finding of fact. Accordingly, the learned trial Court has rightly set aside the ex parte decree.

3. ????????? The learned counsel for the appellant has also contended that the leave to defend the case could not be allowed to respondent N0.1 as he did not seek permission to defend the case within 'the prescribed time of ten days. This argument has no legs to star‑1 upon because the period of ten days has to begin from ? time a defendant is served through a process issued in the prescribed form. In this case service of respondent No.1 was never effected through any such process issued on any such form. He filed an application seeking permission to defend the case within the time allowed to him by the Court and, therefore, it was within time. It may be added that even if no permission were granted to respondent No.1 that would have made no difference because respondent No.2 was there to defend and contest the case.

??? 4. ????? The main contention of the learned counsel for the appellant is that even if the pronote produced by them was not admissible in evidence the suit could not be thrown out by the learned trial Court. The pronote bears the requisite Revenue stamps but the same are not cancelled in accordance with law. The learned counsel for the appellant does not dispute that the said pronote is not admissible in evidence. However, he contends that sufficient evidence was available on record to prove the case of the appellant even if the said pronote was altogether excluded from the evidence. It may be pointed out that the ‑learned trial Court recorded all the evidence on all the issues reproduced above. It is on the basis of the said evidence that he argues that the appellant 'succeeds in proving his case. Before entering into the ‑question of fact relating to the proof of the case the point arises whether with the exclusion ‑of the pronote the suit had to be thrown out or could proceed on the basis of the other evidence on record. Sub‑rule (1) ? of Rule 2 of Order XXXVII of the Civil Procedure Code, 1908 is as follows:

(1) All suits upon bills of exchange, hundies or promissory notes, may, in case the plaintiff desires to proceed hereunder, be instituted by presenting a plaint in the form prescribed; but the summons shall be in Form No.4 in Appendix B or in such other form as may be from time to time prescribed."

Its first three words "all suits upon' are very important. The said words mean that a suit based on a pronote can be filed under Order XXXVII, C.P.C. and can be dealt with thereunder. However, the said rule does not say that it should be on a pronote which is valid according to law or which has been executed according to law or which is admissible in evidence' according to law. Similarly it does not say that the suit cannot proceed on any other evidence apart from the concerned pronote. This would mean that a suit on the basis of a pronote can be filed under the said order and can be tried under the provisions thereof irrespective of the fact whether the pronote is admissible it. evidence or not. However, if the suit is based only on the pronote and not or. any other evidence and the pronote is found ‑to be inadmissible the suit will obviously fail even if witness to prove the said pronote have been produced. However, I if in a case where apart from a pronote which is inadmissible in evidence there is independent or sufficient evidence to prove the loan or debt the Court cannot throw out a case altogether. The Court has to exclude the pronote from the evidence because it is of ? inadmissibility and has then to weigh the evidence to find whether it can independently suffice to prove the case or not. A perusal of the evidence will show that there ‑was sufficient evidence on record, apart from the pronote to prove the case of the appellant‑ Therefore, the learned trial Court could not dismiss the suit simply because the pronote was not admissible in evidence. Hon'ble the Supreme Court has in a very recent ruling entitled Sh. Abdul Majid v . Syed Akhtar Hussain Zaidi (P L D 1988 S C 124) laid down that where A suit was not triable by resort to the procedure prescribed in Order XXXVII, its trial could proceed as an ordinary suit. In view of this law well the suit of the appellant could not be dismissed. As such the finding of the learned trial Court on issue No.1 is illegal and is reversed. The issue, as a consequence, is decided in favour of the appellant.

5. There is no decision of the learned trial Court on issues No.2 and 3 relating to the merits of the case. However, as already stated above, whole of the evidence of the parties has already been recorded and is before us. In these circumstances it will be in the interest of justice that we decide issues Nos. 2 and 3 ourselves instead of remanding the case and burdening the parties with unnecessary expenditure 'apart from facing the consequential delay. The learned counsel for the parties agree that the issues may be disposed of now on the basis of the evidence on record. Respondent No.1 while appearing as D.W.1 denied his signatures on all the documents. Therefore, it is to be seen whether respondent No.1 obtained any loan and executed the requisite documents or not. The appellant produced Mr. Aftab Ahmed Khan, their Manager, as P.W.1 and Abdul Rahim Khan Sumbal, P.W.2, an officer of their Bank, to prove the statement of accounts Exh.P.2, application for loan Exh.P.3, receipt for the loan Exh.P.4, acknowledgement of loan Exh.P.5 and guarantee form Exh.P.6. In fact, their statements are sufficient to prove the said documents. However, it may be added that on the application for loan Exh.P.3 apart from signatures of respondents Nos. 1 and 2 a duly attested photograph of respondent No.1 is pasted. D.W.1 conceded that it was his photograph, but he still avoided to admit the execution. Again, respondent No.2 while appearing as D.W.a supported the case of the appellant and stated that the said documents were executed by respondent No.l. Similarly he has stated that the asked respondent No.1 to return the loan to the appellant and he promised to do so if the interest was waived, but later did not pay back anything. He does not seriously deny his signatures on guarantee form Exh. P.6. Therefore, the documents Exhs.D.2 to P.6 read with the evidence of P.Ws.1 and 2 as also D.Ws. 1 and 3, but independent of the pronote, prove that respondent No.1 obtained the loan in dispute and respondent No.2 guaranteed the payment back of the same. Accordingly, issues Nos. 2 and 3 are decided in favour of the appellant.

6. ????? The suit as a result has to be decreed. However, it may be stated that the suit was filed on the basis of a pronote which in itself was inadmissible in evidence and the parties were, therefore, dragged into a long litigation due to a legal defect in the same which was due to the negligence of the appellant‑Bank. In these circumstances the Bank can neither be allowed the costs of the suit nor can it be allowed interest for the period up to the passing of the decree. He, however, is being allowed interest from, the date of the passing of the decree because the same is mandatory under section 34‑B, C.P.C.‑‑‑?Accordingly, the impugned judgment and decree of the learned trial Court are set aside. A decree for recovery of Rs.4,803 alongwith interest at the rate of 2% above the Bank rate from the date of this decree till realization‑, is passed in favour of the appellant and against the respondents. The parties shall bear their own costs throughout.

? A. A. /U-21/L ?????????????????????????????? Appeal allowed.