2004 C L C 1640

[Lahore]

Before Ali Nawaz Chowhan, J

MUHAMMAD ISHAQUE KHAN—Petitioner

Versus

NAVEED AHMAD—Respondent

Civil Revision No. 199 of 2004, heard on 24th June, 2004.

(a) Civil Procedure Code (V of 1908)—

—-O. XXXVII, Rr. 1, 2, 3 & 4—Limitation Act (IX of 1908), S. 5 & Art. 181—Suit based on negotiable instrument—Ex parte decree, setting aside of—Procedure—Limitation—Conditions—Principles.

In matters of suits based on negotiable instruments, a summary procedure is prescribed under Order XXXVII of C.P.C. Order XXXVII, rule 4, C.P.C. prescribes a procedure for setting aside, of an ex-parte order passed under Order XXXVII, C.P.C.

The law provides that the decree may be set aside under Order XXXVII, rule. 4 upon the defendant showing special circumstances for his inability to appear and obtain leave within 10 days prescribed under Order XXXVII, rule. 3. The limitation provided under section 5 of the Limitation Act, is attracted for purposes of limitation in filing of applications for leave.

The provisions of Order XXXVII, Rule 4, C.P.C. take the case out of the provisions of the Limitation Act with respect to the powers of the Court in considering setting aside of the decree. It lays down the condition of showing special circumstances for setting aside the decree.

Since a special circumstance has to be shown, an application is, therefore, to be made under Article 181 of the Limitation Act and not Article 164 of the Limitation Act.

Habib Bank Limited v. Musarrat Ali Khan PLD 1987 Kar. 86 fol.

(b) Civil Procedure Code (V of 1908)—

—-Os. VII, VIII, IX & XXXVII—Interpretation and comparative study of Orders VII, VIII, IX & XXXVII, C.P.C.

Habib Bank Limited v. Musarrat Ali Khan PLD 1987 Kar. 86 quoted,

—O. XXXVII, R. 4—Suit for recovery based on cheque—Power to set aside ex-parte decree—Special circumstances—Case of the defendant, in the present case, was that he had ‘not executed the cheque under reference, neither he was a guarantor nor a beneficiary and that the only allegation made against him was that he was present at the relevant time with tits executant of the cheque who happened to be his relation-¬Validity—Suit was to be instituted against the executor of the negotiable instrument and not against an outsider—Defendant, in circumstances, was able to advance special circumstance for setting aside of the ex-parte decree against himself If — Decree, in question, however would continue to be valid as far as the executant was concerned.

National Security Insurance Co. and another v. Hoechst Pakistan Ltd. and others 1992 SCMR 718 fol.

Muhammad Aurang Zeb for Petitioner.

Zulfiqar Khalid Maluka for Respondent.

Date of hearing: 24th June, 2004.

JUDGMENT

Muhammad Ishaq Khan was the plaintiff below. He filed a suit under the provisions of Order XXXVII, rules 1 and 2, C.P.C. for the recovery of money against the respondents basing his claim on a cheque, the details of which are provided in the plaint itself, said to have been issued by Naveed Ahmad Khan, respondent No. 1. This cheque had bounced, therefore, the suit had to be filed.

2. It seems that no one amongst the defendants appeared before the trial Court. The learned trial Court recorded the statement of Muhammad Ishaq Khan (plaintiff) and decreed the suit on 6-1-2001.

3. Thereafter Aziz Ahmad Khan, respondent No.2, filed an application for setting aside of the ex parte decree claiming that he was not aware of the suit and that on the basis of false reports against him, he was proceeded ex parte. His second plea was that he never executed or issued any cheque to the plaintiff and, therefore, an ex parte decree had been obtained against him through suppression of facts and mechanically.

4. The first objection raised before the trial Court was on the maintainability of the application which was stated to be time-barred having been moved on 23-6-2003 after about 2-1/2 years of the passing of the ex parte decree. It was contended before the trial. Court that under Article 164 of the Limitation Act, 1908, an application for setting aside the ex parte decree could have been moved within 30 days from the date of knowledge. Whereas. it was said that he had acquired knowledge several months before 23-6-2003 as he had appeared before the executing Court at Lahore.

5. The first question would be as to which Article of the Limitation Act would be applicable in such a case.

6. According to the learned’ counsel for the petitioner, the application would be filed under the provisions of Order IX. rule 13 of the C.P.C. for setting aside of the ex parte order attracting the provisions of Article 164 of the Limitation Act and which prescribes a period of one month for this purpose.

7. This Court finds that In matters of suits based on negotiable instruments, a summary procedure is prescribed under Order XXXVII of A C.P.C. Order XXXVII, rule 4, C.P.C. prescribes a procedure for setting aside of an ex-parte order passed under Order XXXVII, C.P.C., which reads as follows:–

“Power to set aside decree.— After decree the Court may under special circumstances, set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit.”

8. The law provides that the decree may be set aside under rule 4 upon the defendant showing special circumstances for his inability to appear and obtain leave within 10 days prescribed under. Order XXXVII, rule. 3. The limitation provided under section 5 of the Limitation Act, is attracted for purposes of limitation in filing of applications for leave.

9. The provisions of Order XXXVII, rule 4, take the case out of the provisions of the Limitation Act with respect to the powers of the Court in considering setting aside of the decree. It lays down the condition of showing special circumstances for setting aside the 10. Since a special circumstance has to be shown, an application is, therefore, to be made under the Article 181 of the Limitation Act instead of Article 164 of the Limitation Act. In this connection, reference may be made to the case of Habib Bank Limited v. Musarrat Ali Khan PLD 1987 Kar. 86 and which would start from the date of the knowledge of the applicant.

11. The following relevant excerpt from the case of Habib Bank Limited ibid gives a comparative study of the various Orders of the Civil Procedure Code and takes us to the belief as reflected in the aforementioned paragraph:

“A comparative study of Orders VII, VIII, IX and XXXVII, C.P.C. will reveal that the incidents of these Orders are distinct in their nature and scope. Orders VII, VIII and IX deal with all kinds of suits, whereas Order XXXVII is concerned with suits of a special nature i.e. suits upon bills of exchange, Hundies or promissory notes. In a suit under Order VII, C.P.C. after the plaint is admitted, the summons is issued to the defendant for appearance on a fixed’ date mentioned in the summons. On receipt of the summons, the defendant may, and if so required by the Court, shall present a written statement of his defence at or before the first hearing or within such time as the Court may permit provided that the period allowed for filing the written statement shall not ordinarily exceed ninety days. Under Order VII, rule 10 if the party fails to present a written statement called for by the Court, the Court may pronounce judgment against him, whereas under Order XXXVII, rule 2 the defendant shall not appear and defend the suit (by filing written statement) unless he obtains leave from the Court within 10 days of the service of the summons. Further, the provision of Order IX, rule 6, which provides for ex parte decree, applies where the plaintiff appears but the defendant does not appear when the suit is called for hearing. In other words the principle underlying Order IX, rule 6 is that the defendant could appear in law, but, in fact, has not appeared, whereas in a summary suit under Order XXXVII, rule 2(2) the defendant cannot appear or defend the suit unless he obtains leave from a Judge. Similar is the case under Order IX. rule 7 that if an ex parte hearing of a suit is adjourned and if the defendant appears at the adjourned hearing and assigns good cause for his non-appearance on’ the previous date, it is open to the Court to permit him to be heard in answer to the suit as if he had appeared on the date fixed for his appearance. If an ex parte decree is passed against the defendant in an ordinary suit his remedy is provided under Order IX, rule 13 for setting aside the same and if he satisfies the Court that the summons was not duly served, or that he was prevented by any `sufficient cause’ from appearing when the suit,’ was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs payment into Court or otherwise as ‘ it thinks fit, and shall, appoint a day for proceeding with the suit, whereas in a C summary suit decreed ex parte against the defendant, the remedy is provided in Order XXXVII, rule 4. which provides that the Court may, under `special circumstances set aside the decree and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do.”

12. The next question is whether there were special circumstances calling for interference under the, provisions of Order XXXVII, rule 4. The answer is to the affirmative because the case of Aziz Ahmad Khan was at he had not executed the cheque under reference, neither he was a guarantor nor a beneficiary and that the only allegation made against him was that he was present with Naveed Ahmad Khan when he had issued the cheque and who happened to be his relation.

13. A suit is to be instituted against an executor of negotiable instrument and not against an outsider. In this connection, reference may be made to the case of M/s National Security Insurance Co. and another v. M/s Hoechst Pakistan Ltd. and others 1992 SCMR 718. The respondent Aziz Ahmad Khan, therefore, was able to advance special circumstances for setting aside of the ex parte decree against himself. The decree, however, continues to be valid as far as Naveed Ahmad Khan is concerned.

14. This Court after hearing all sides does not find any error with the findings of the Courts below in this connection and dismisses this civil revision.

M.B.A./M-608/L Civil revision dismissed