CONTINENTAL FURNISHING CO. Ltd. Versus HABIB BANK LIMITED, KARACHI

AJMAL MIAN, J.‑‑ This appeal is directed against the judgment and decree dated 6‑3‑1984 passed by the learned Presiding Officer, Special Court (Banking) for Sind at Karachi in Suit No. 18 of 1983 declining the appellants' application for leave to defend and decreeing the suit for sum of Rs. 9,60,314.92. The appellants being aggrieved by the above Judgment/decree have filed the present appeal,

2. In support of the above appeal, Mr. Farook H. Naik, learned counsel for the appellants, has urged as follows:‑‑

(i) That the second promissory note dated 16‑5‑1977 relied upon by the respondents was without consideration.

(ii) That in any case the claim was barred by limitation.

(iii) That it was a fit case in which the learned Presiding Officer should have granted leave to defend as substantial question of law was involved.

On the other hand Mr. I.H. Zaidi, learned counsel for the respondents, has submitted as under:‑‑

(i) That the second promissory note dated 16‑5‑1977 was not without consideration.

(ii) That the suit was not barred by limitation as the acknowldgement was made on 12‑3‑1980, whereas the last payment was made on 4‑2‑1979.

(iii) That since only the point of limitation was involved, the learned Presiding Officer was justified in declining leave to defend.

3. Adverting to the first submission of the learned counsel for the parties that the second promissory note dated 16‑5‑1977 was without consideration, it may be observed that in furtherance of the above arguments Mr. Farooq H. Naik, learned counsel for the appellants, has submitted that factually on the above date no amount was due and payable which could have been lawfully recovered as the claim was barred by limitation. On the other hand Mr. I.H. Zaidi, learned counsel for the respondents, has urged that even if we were to ignore the above promissory note, the suit could have been decreed on the basis of the part payment and acknowledgment contained in the above letter dated 12‑3‑1980.

4. In our view, the question of limitation in the present case was a complex question which needed further examination as the acknowledgment contained in the letter dated 12‑3‑1980 prima facie does not seems to be unconditional but it contains an offer to settle the matter for a reduced amount of Rs. 5,00,000 in place of Rs. 5,61,985 as shown outstanding on 21st December, 1978. Mr. Farooq H. Naik in support of his submission that the above letter does not constitute acknowledgment has referred to the following two cases:‑‑

(i) Rajah Kavali Arunachcllah Row Bahadur v. Sri Rajah Rangiah Appa Row Bahadur and other, reported in I.L.R. 1906 29 Madras 519.

(ii) Konnoth Meenakshi Amma v. Province of Madras, through Collector of South Kanara, Mangalore & others, reported in AIR (33) 1946 Madras 73.

Whereas Mr. I.H.Zaidi has submitted that this point was not specifically taken in the affidavit in support. of the leave application nor this point has been specifically raised in the memo of appeal..

5. In our view, the question whether the above letter constitutes acknowledgment in terms of section 19 of the Limitation Act involves the determination of the question, whether it is unqualified acknowledgment or not and, therefore, even if the above question was not raised specifically in the affidavit in support of the leave application, the same can be urged before us. We are inclined to hold that it was a fit case in which conditional leave ought to have been granted by the learned Presiding Officer.

6. We, therefore, allow the above appeal and set aside the decree on the A condition that the appellants shall furnish security to the satisfaction of the Nazir of this Court of the suit amount within a period of six weeks and the case is remanded to the learned Presiding Officer, Special Court (Banking) for Sind at Karachi. However, in case the appellants fail to furnish the above security in the above terms, the decree will remain intact.

H.B.T./C‑55/K

Appeal allowed/Order accordingly.