UNITED BANK LTD. Versus BILQUEES BEGUM

1. This appeal calls in question the judgment passed by the learned Sixth Additional District Judge Karachi, dismissing the appellant's suit filed under Order XXXVII, Rules 1 and 2, C.P.C.

2. Briefly stated, the facts of the case are that, the deceased predecessor of the respondents who had obtained a loan of Rs.5,000 from the appellant, had executed a promissory note, dated 14‑11‑1974, for Rs.5,000 in their favour. The deceased had also been operating an account with another branch of the appellant at Rawalpindi which had a debit balance of Rs.3,067. Subsequently, the account at Rawalpindi was also transferred to Karachi at the request of the deceased through his letter, dated 10‑8‑1974. Thereafter, on 8‑4‑1975 the deceased executed another promissory note in the sum of Rs.8,409, promising to pay the aforesaid amount with interest at 4 per cent per annum over the bank rate with minimum of 13 per cent per annum with quarterly rests. On failure of the deceased to pay the two amounts, a suit for the recovery of Rs,12,013.10 was filed by the appellant against the deceased after serving two notices of demand on him, dated 25‑5‑1977 and 29‑9‑1977 respectively. It is also pertinent to point out that during the pendency of the suit the deceased expired and his legal representatives were brought on record of the case as respondents Nos.l to 4. However, the respondents failed to defend the suit and the matter was consequently adjourned by the learned Additional District Judge for filing of affidavit in ex parte proof which was accordingly filed on 21‑7‑1982. Notwithstanding the same, suit was dismissed as pointed out above, and hence this appeal.

3. The following are the reasons which appear to have weighed with the learned Additional District Judge. First of all, the learned Additional District Judge found the entries made by the appellant in the account sheet as suspicious. She also found that the signatures of the deceased on the two promissory notes had not been properly proved by the appellant. It was further found by her that the receipt of consideration by the deceased in respect of the promissory notes had not been established. For such reasons, the suit was dismissed.

4. Mr. Mohammad Asghar Ansari, learned counsel for the appellant, has argued that, since leave to defend the suit had not been applied for by the deceased, the learned District Judge should have proceeded under Rule 2 (2) of Order XXXVII, C.P.C. and decreed the suit in favour of the appellant. He has also assailed the findings of the learned Additional District Judge that the value of consideration for the two promissory notes had not been shown to have been received by the deceased as according to the learned counsel, section 118 of the Negotiable Instruments Act clearly provides that the consideration in respect of a promissory note is to be presumed. The counsel has consequently argued that since there was no evidence produced by the respondents in rebuttal of such presumption, the findings of the learned Additional District Judge are clearly erroneous.

5. I find lot of force in these contentions. As far as the first contention of the counsel is concerned, Rule 2 (2) of Order XXXVII, C . P. C . provides that:

6. "(2) In any case in which the plaint and summons are in such forms, respectively, the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend; and, in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted, and the plaintiff shall be entitled to a decree."

7. Since in the present case, admittedly, no application for leave to defend the suit had been filed on behalf of the respondents or their predecessor in interest, all that the learned Additional District Judge was required to do was to decree the suit as provided in Rule 2 (2). It was not even necessary for her to require the appellant to file an affidavit in ex parte proof. However, in any case, the learned Additional District Judge need not have gone into the issues, reference to which has already been made hereinabove. Such issues were clearly not involved in the present case. I also find that the finding, that the promissory note had been executed by the deceased without consideration, has also been arrived at in clear disregard of the provisions of section 118 of the Negotiable Instruments Act which provides that:

8. "118. until the contrary is proved, the following presumptions shall be made;

(a) that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed negotiated or transferred for consideration:

9. Section 118 thus makes it clear that consideration in respect of the negotiable instruments is to be presumed under the law, and consequently no negotiable instrument can be held to be without consideration unless such presumption has been rebutted by the defendant. Since as already pointed out above, there was no applications filed by the respondents or their deceased predecessor for leave to defend the suit under Rule 2 of Order XXXVII, C.P,C. obviously the presumption referred to in section 118 of the Negotiable Instruments Act was not rebutted in the present case. It appears that the learned Additional District Judge has proceeded on an assumption that the suit in the present case was a suit for accounts which in fact, it was not, and therefore, her findings are uncalled for and the same in no way should defeat the claim of the appellants.

10. The upshot of the above discussion is, that, this appeal is allowed and the findings arrived by the learned Additional District Judge are set aside and the suit is decreed in full against the respondents with interest from the date of the filing of the suit till the payment of the decretal amount. The costs of this appeal shall, however, be borne by the appellants since the respondents neither defended the suit before the learned Additional District Judge nor this appeal.

11. A.A./U‑25/K Appeal allowed.