Messrs UNITED DISTRIBUTORS PAKISTAN LIMITED vs AHMAD ZARIE SERVICES

ORDER

2 Plaintiffs dealing in the sale of pesticides used in agricultural farming appointed the defendants as their dealer on commission basis. In January, 1987 the defendants applied for dealership to the plaintiffs and got themselves registered. Plaintiffs agreed to appoint the defendants as their dealer at Vehari and an agreement was executed between the parties. The defendants received deliveries of pesticides from time to time from the plaintiffs and made partial payments with intervals. Some time the defendants returned certain stocks to the plaintiffs and were accordingly issued Sales Returned Memos giving its benefits to the extent thereof while the plaintiffs issued Credit Notes to the defendants giving them discount against cash payments in relation to the pesticides supplied. After repeated demands and efforts of the plaintiffs, defendants issued a post dated cheque in favour of the plaintiffs in the sum of Rs.30,00,000 as on 20-10-1988. They also executed a promissory note by way of security in the sum of Rs.25,00,000 initially shown in the plaint as Rs.30,00,000 as on 10-11-1988 in favour of the plaintiffs. Allowing due allowance for the value of the stocks returned to the plaintiffs, not amount payable by the defendants comes to Rs.23,03,495.46 which calculated with interest at 14% per annum as per terms and conditions comes to Rs.29,84,704.20 which has been claimed in the suit.

3. Summons were issued to the defendants in terms of Order XXXVII, Rule 2, C.P.C. Calling upon them to obtain leave of this Court within 10 days from service to appear and defend the suit. Upon service of the summons defendants moved C.M.A. 9821 of 1993 for leave to defend the suit and C.M.A. 1675 of 1994 as well as C.M.A. 377 of 1995 seeking an order to return the plaint for want of territorial jurisdiction. Since C.M.A. 1675 of 1994 was not accompanied by an affidavit as required by the Sindh Chief Court Rules defendants were obliged to move second application with same prayer duly supported by an affidavit.

4. At the hearing learned counsel for defendant contended with vehemence that the defendants carry on their business and ordinarily reside at Vehari within the Province of Punjab far beyond the jurisdiction of this Court. He further submitted that even the goods were supplied to the defendants in the Province of Punjab and the alleged cheque as well as promissory note were executed at Vehari within the Province of Punjab. On these averments it was maintained that the plaint was incompetently filed before this Court which cannot be maintained and is liable to be returned for presentation to proper Court.

5. At the outset it may be observed that in a suit based upon negotiable instrument in which summons have been issued in Form No.4 Appendix B, the defendant is not entitled to appear or defend the suit as a matter of course unless he obtains leave from the Court so to appear and defend. In default of his obtaining such leave for his appearance and defence in pursuance thereof the allegations in the plaint shall be deemed to be admitted and the plaintiffs shall be entitled to a decree. The advantage in adopting the procedure prescribed by Order XXXVII, C.P.C. Is that the defendant is not as a matter of right entitled to appear or to defend, but if he deserves to be heard he must apply to the Court for permission to appear and defend within 10 days of service of summons as envisaged by Article 159 of the Limitation Act. Till such time as leave to defend is granted the defendants cannot even file interlocutory application in order to agitate the point of jurisdiction or to question the transactions between the parties or to challenge validity, and legal effect of the promissory note and crossed cheque issued by them in favour of the plaintiffs. In my view these issues can be decided at the trial after recording evidence after leave to defend is granted to the defendants on disclosing a sufficient cause.

6. For the purpose of jurisdiction a Court is required to accept the contents of the plaint as correct and legally speaking the pleas raised by the defendants in rebuttal or otherwise cannot. Be considered for declining to assume jurisdiction. From the averments of the plaint as they are, I am fully convinced that within the meaning of clause (a)(b)(c) of section 20 of the Code of Civil Procedure, this Court has the jurisdiction to proceed with the suit and the objection is without merit.

It is accordingly overruled.

7. It was next contended that suit under summary procedure can only be based on negotiable instrument and not on the basis of business transactions between the parties. There is no substance in this contention as well because the plaintiffs are legally entitled to sue the defendants under the summary procedure on the strength of promissory note as well as crossed cheque notwithstanding the circumstance that they have pleaded transactions between the parties. Although no authority is needed for this proposition yet I may refer to unreported judgments in Suit No.665 of 1990 by "Abdur Rahim Qazi, J. (as he then was) decided on 30-1-1992, Suit No.779 of 1988 decided by Mukhtiar Ahmed Junejo. J. (as he then was) on 10-9-f990 and recent judgment by my learned brother Rasheed Ahmed Razvi. J. In Suit No.771 of 1989 decided on 25-5- 1995.

8. Reliance on Khawaja Mehmood Hassan and another v. Zubair Ahmed and another 1988 CLC 1914 Lahore on behalf of the defendants is completely misconceived as the reported case has no bearing on the facts of the case.

9. For these reasons both the applications are dismissed as misconceived. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.