K. M. YOUSUF Versus MAHMOOD AHMAD SHAIKH

This appeal is directed against the judgment and decree in suit No. 21/78 passed by Additional District Judge, Karachi on 2‑10‑1978. A suit for recovery of Rs.23,625.99 spas filed against the appellant by the respondent under Order XXXVII, rule 2, C.P.C. The same was based on a dishonoured cheque for the same amount, dated 19‑10‑1977. It was disclosed in the plaint that the cheque had been issued by the appellant in consideration of the supplies made by the respondent to the appellant. The appellant filed an application under Order XXXVII, rule 3, C.P.C. for leave to defend and submitted an affidavit to the effect that he had already paid to 'the plaintiff for whatever purchases he had made from the plaintiff and that last purchase was in September, 1975 and that he did not make any purchase thereafter. 1t was further alleged that the disputed cheque was issued from the appellant's cheque book which was in use of the appellant in January, 1974 and that a cheque before the disputed cheque and a cheque after the disputed cheque were issued in January, 1974 in the name of the plaintiff and that the disputed cheque had been obtained blank from the appellant by his servant, Abdul Hameed, which was to be drawn in favour of P.I.A. but the said Abdul Hameed had in collusion with the plaintiff drawn the said cheque in favour of the plaintiff and thus misused the signature of the appellant.

2. These allegations were denied in the counter‑affidavit filed by Y the respondent and it was stated that since the signature on the cheque had not been disputed, therefore, the defence was untrue.

3. The learned A.D.J. dismissed the application for leave to defend on the ground that since the alleged cheque had been executed by the appellant and delivered through his authorised agent, therefore, the right of the plaintiff /respondent cannot be defeated.

4 have heard Mr Ashiq Ali and Mr Obaidur Rehman. The learned counsel have cited many authorities as to how leave to defend should be granted. The leading case on this point is P L D 1963 163 (168) the famous case of the Fine Textile Mills where it was held by the Supreme Court that if the defendant's affidavit shows plausible defence or some substantial questions of law or facts which needs to be tried then leave to defend is to be granted. It was further observed by the Supreme Court that even if the defence be vague or unsatis factory, leave may be granted on terms.

5. A similar case had again come before the Supreme Court in 1975 S C M R 393(394) where unconditional leave to defend a suit filed under Order XXXVII, rule 2 had been granted by the High Court and the Supreme Court refused to grant leave to appeal from the said judgment after observing that it was satisfied that leave should have been granted in the said case. In respect of the matter about the conditions or terms when the leave is to be granted the Supreme Court observed that the same was a matter within the jurisdiction of the Court granting leave.

6. Mr. Obaidur Rehman has referred 1984 S C M R 568 where the Supreme Court had allowed an appeal of the defendant in a case under Order XXXVII, rule 2, C.P.C. against the order of the High Court which had granted leave to defend but attached condition requiring him to furnish a surety equal to the sum of rupees in suit within two months. The High Court had required the defendant in that case to provide surety in the sum of Rs.22,59,483.70 but the Supreme Court reduced the amount of the security in the sum of Rs.2,75,000 in the circumstances of the case.

7. In C L C 1983 Kar. 456 it was held that if a defence is made out which is plausible or even illusory leave to defend should be granted.

8. It appears to me that the trend of authority is in favour of granting leave to defend in cases under Order XXXVII, C.P.C where even some vague or unsatisfactory defence is raised by the defendant. 1 do not wish to comment upon the merits of this case in detail because I am granting leave to the appellant to defend the suit but I may observe that since the defendant had submitted that it had made payments A for the purchases made by it in July, 1975 and that the cheque in question was from a cheque book which was in use in 1974 but the disputed cheque bears a date of 19‑10‑1977, therefore, there was some justification for the investigation into the case set up by the defendant that the cheque in question, although bearing his signature, was not issued for consideration. I may not be understood for a moment to hold that the defence of the appellant was true but I am only suggesting that there was some defence raised requiring investigation.

9. Consequently, I set aside the judgment and, decree of the tower Court, dated 2‑10‑1978 and grant leave to appeal to defend Suit No. 21/78 provided he furnishes surety in the sum of Rs.23,625 plus interest of 68 per annum from the date of the suit. Surety may be furnished within 3 months from today in the trial Court. The R & P may be sent back to the trial Court for fresh decision. The surety furnished in the High Court will stand discharged from the day that the surety ordered to be furnished now is accepted' by the trial Court.

A. A. Leave to defend suit granted