M/s. HOECHST PAKISTAN LTD. vs M/s. COOPERATIVE INSURANCE SOCIETIES

' MUNIR A. SHAIKH, J.---The plaintiff appeals against order dated 17-6-1991 passed by learned Civil Judge, Lahore, through which the plaint of the suit filed by the appellant for recovery of an amount of Rs,4,92,595.74 has been rejected under Order VII, Rule 11, C.P.C.

2. The appellant filed a suit for recovery of the abovementioned amount against respondents, alleging that respondent No,1 secured the said amount through Insurance Guarantee issued by it, which was recoverable from respondents 2 and 3, as price of pesticides supplied to them. The respondent No,1 as such was impleaded as defendant in the capacity of a guarantor.

3. In the written-statement filed by respondent No,1 a preliminary objection was raised that the plaint was liable to be rejected in limine, because statutory notice as contemplated by section 70 of the Cooperative Societies Act, 1925 had not been served.

4. The learned trial Court reflected the controversies arising from the pleadings of the parties in the following issues framed by it:

(1) Whether suit is within time? OPP.

(2) Whether suit is not maintainable in view of preliminary objection No,1 of the written statement?

OPD.

(3) Whether this Court lacks territorial jurisdiction? OPD.

(4) Whether the plaintiff is entitled to recover Rs,4,92,595.74 with interest from the defendants? OPP.

(5) Relief.

' It is manifest that issue No,2 relates to the said objection regarding service of notice and without waiting for the trial of the suit on the issues framed, and producing evidence in support thereof the respondent No,1 made an application under Order VII, rule 11, C.P.C. for the rejection of the plaint on the same ground which has been accepted through the impugned order dated 17-6-1991.

5. The main burden of argument presented by learned counsel for the appellant in support of this appeal inter alia was that respondent No,1 was impleaded as defendant in the suit, in the capacity of a guarantor, against whom a decree was sought in the same capacity and as such section 70 of the Punjab Cooperative Societies Act, 1925, wich contemplates issuance of notice before filing a suit if the dispute related to business of a society was not attracted as cause of action against respondent No,1 as guarantor was not relatable to the business of the society. He maintained that since issue No,2 had already been framed regarding this controversy, therefore, the learned trial Court committed an illegality in passing the impugned order for rejection of the plaint in which the question whether the institution of the suit against the Cooperative Society as a guarantor was relatable to the business of the Society as contemplated under section 70 of the said Act has neither been adverted to nor decided and without the decision of the said point the plaint could not have been rejected. He further argued this controversy could not be decided without recording evidence because the respondent No,1 was bound to produce evidence to show that the matter related to the business of the Society.

6. The submissions, in our opinion, have considerable force. The learned trial Court after having reflected the said controversy in issue No,2 should have decided the suit after recording evidence on the issues already framed and has committed an illegality in passing the impugned order on miscellaneous application which amounts to dismissal of the suit and decision of issue No,2 without affording opportunity to the parties to produce evidence. The impugned order is not sustainable.

7. This appeal is accepted. The order dated 17-6-1991 is set aside and the suit is remanded to the learned trial Court to decide it after recording evidence of the parties on the issues framed. The parties are directed to appear before the learned trial Court on 5-12-1992. The learned trial Court shall decide the suit before 31-7-1993 and report compliance.

' The parties are left to bear their own costs.