Mst. SUGHRABAI AND 10 Others vs FIDA HUSSAIN MOHAMMADALIKERAI AND Another
This petition for special leave to appeal challenged a High Court judgment that dismissed a suit for the recovery of money based on a promissory note. The original plaintiff alleged the defendant borrowed money, while the defendant contended the promissory note was executed for 'pugree' (a premium for possession of premises), which he argued was illegal consideration. The trial court and the first appellate court decreed the suit in favor of the plaintiff, but the High Court reversed this, finding the consideration was indeed for 'pugree' and thus unenforceable. The Supreme Court examined the evidence, specifically noting that while the plaintiff argued the consideration was for the 'goodwill' of a shop, the evidence indicated the amount was for the possession of the premises. The Supreme Court upheld the High Court's finding, concluding that the promissory note was based on illegal consideration (pugree) and that the High Court's appreciation of evidence was correct. The petition for leave to appeal was dismissed.
- Is a promissory note executed in consideration of 'pugree' (premium for possession of premises) enforceable in law?
- Does the definition of 'goodwill' in law require evidence of the use of a firm's name and reputation?
- Can an appellate court interfere with findings of fact if they are based on a proper appreciation of evidence?
ORDER
1. WAHIDUDDIN AHMAD, J.-This petition for special leave is directed against the order of the High Court of Sind and Baluchistan, Karachi, in Second Appeal No. 91 of 1965. By this order, a Division Bench of the High Court allowed the appeal and dismissed the claim of the petitioners.
2. Briefly, the facts leading to this petition are that Badruddin M. Ismailjee filed a suit in the Court of 5th Sub-Judge, First Class, Karachi, against the respondents on the allegation that respondent Fida Hussain had borrowed Rs. 10,000 from him and out of this loan he had only repaid a sum of Rs.
3. 2,400 and on the 29th June 1356, he executed a promissory note for the balance of Rs. 7,600 in favour .Of respondent No. 2 and respondent No. 2 was holding this pronote as benami on his behalf.
4. On these allegations he filed a suit for the recovery of a sum of Rs. 8,968 inclusive of a sum of Rs.
5. 1,368 as interest. The suit was contested by the respondents. Respondent No. 1 denied having received any consideration for the promissory note and also denied that he had borrowed Rs.
6. 10,000. He pleaded that he had purchased a shop for Rs. 10,000 under an agreement witnessed by a partner of Messrs Ameejee Valeejee & Sons and under this agreement, Rs. 2,4.0 was fixed for goods lying in the shop and the balance of Rs. 7,600 was the pugree fixed for the premises. He further pleaded that as the title of the deceased Badruddin was not clear, the pugree was payable for two Sears after the transfer of the shop to him. He, therefore, contended that the pronote was for consideration which was illegal and could not be, therefore, enforced. He also pleaded that deceased Badruddin had no cause of action as the promissory note on which he has sued had not been endorsed in his favour.
7. In the suit as many as 14 issues were framed. The learned Sub-Judge, after recording the evidence of the parties and their witnesses, decreed the suit in favour of the petitioners by judgment dated the 29th January 1963. This judgment was also upheld by the District Judge, Karachi in Civil Appeal No. 54 of 1963 by order dated the 16th December 1964. The order of the Appellate Court was challenged in Second Appeal No. 91 of 1969 in the High Court and a Division Bench, by judgment dated the 3rd September 1970, allowed the appeal: The High Court held that the promissory note was for illegal consideration in respect of pugree and dismissed the suit filed by the predecessor- in-interest of the petitioners.
8. Mr. A. Aziz Khan, learned counsel for the petitioners, has contended that the High Court should not have upset the findings of the two Courts below that the consideration of the pronote was the goodwill of the shop which was sold to respondent No. 1. The learned counsel contended that respondent No. 1, in his statement, has also admitted that the consideration of the pronote was the goodwill of the shop. The contention of the learned counsel has not impressed us. In the first place, deceased Badruddin has not based his claim on the ground that the pronote was executed in respect of the goodwill of the shop which he sold to respon--dent No. 1. In fact he alleged that respondent No. 1 had borrowed Rs. 10,000 out of which he paid Rs. 2,400 and executed a promissory note in favour of respondent No. 2 for the balance of the amount. Apart from this, there is no evidence on the record to show that respondent No. 1 has been using the name of the deceased's firm. In law, goodwill means the use of the name of the business and the reputation acquired by a firm. In the present case, no such evidence is available to support this contention. It is true that respondent No. 1, in his statement, has stated that the pronote in question was executed in favour of respondent No. 2 for the goodwill of the shop but as pointed out by the High Court in the same breath, respon--dent No. 1 has stated that it was executed in consideration of the pugree of the shop. If the statement of respondent No. 1 is read as a whole it gives an impression that what he really meant was that the pronote in question was executed by him in respect of the pugree amount.
9. The evidence of the parties discloses that furniture and timber Worth Rs. 2,400 was sold to respondent No. 1 by deceased Badr--uddin. The rest of the amount was for possession of the shop.
10. This is clear from Exh.
3. In such circumstances the finding of the High Court that the pronote for Rs.
11. 7,600 was executed in respect of pugree cannot be said to be as erroneous one. After going through the judgment of the High Court we are satisfied that the finding arrived at by it is based on proper appreciation of the evidence, led by the parties. We, therefore, find no ground to interfere in this matter. The petition is dismissed.