HIGH COURT OF SINDH AT KARACHI

 

Suit No.323 of 2020

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Date                         Order with signature of Judge

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1.         For hearing of CMA No.4950/2020

2.         For hearing of CMA No.7940/2020

3.         For hearing of CMA No.10790/2020

 

 

Dates of hearing 15.01.2021 & 27.01.2021

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Mr. Muhammad Ali Lakhani, advocate for the plaintiff.

 

Mr. Sarmad Hani, advocate for defendant No.2.

 

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SYED HASAN AZHAR RIZVI J:    By this order I intend to dispose of following CMAs:-

(1)       CMA No.4950/2020 filed by the defendant No.2 under Order 39 Rule 4 and 151 CPC to modify / discharge and /or set-aside the ad-interim order dated 25.02.2020 whereby the defendants were directed not to present cheque bearing No.A-26431624 dated 28.02.2020 of Rs.60 Million for encashment, however, that was subject to furnishing appropriate surety of Rs.60 Million to the satisfaction of Nazir of this Court. Further sought order that the Impugned Cheque may not be treated as invalidated / outdated and / or stale after the expiry of six months from the date of its issuance. Furthermore, to reject the documents submitted on behalf of the Plaintiffs by the sureties being either solvent nor appropriate.

 

(2)       CMA No.7940/2020 filed by the plaintiffs under Section 22(7) of the Sindh Chief Court Rules, read with Order XIV Rule II of the CPC for treating present proceedings as ‘short case’ and be decided after framing the issues with regard to Settlement Agreement as mentioned in the application.

 

(3)       CMA No.10790/2020 filed under Order XXIII Rule 1 CPC to withdraw the plaintiff No.2 from the present proceedings unconditionally on the ground that principal dispute insofar present proceedings are concerned is confined to the person of the plaintiff No.1 and defendant No.2.

 

2.         Brief facts of the case are that the plaintiff No.1 is father of the plaintiff No.2 and plaintiffs are associated with the defendant No.1 through personal and professional relation. Plaintiff No.2 and the defendant No.1 were childhood friends, which led them to join resources for the purpose of commercial gain. In pursuance of their relations, the plaintiff No.2 and defendant No.1 initiated various commercial enterprises including M/s. Royal Securities (Pvt) Ltd., (hereinafter referred to as “Royal Securities”). It is stated in the plaint that the operations, administration and management of Royal Securities were vested in the hands of the plaintiff No.2 and the defendant No.1. Photocopies of Certificate of Registration & Form 29 of the Royal Securities are enclosed as annexures “P/1 and “p/2” at pages-29 and 31 with the plaint. It is further stated in the plaint that the defendant No.1 acted to manipulate trading trends and influenced values of a particular security i.e. Unicap Modarba, which resulted in the initiation of an investigation by the Securities and Exchange Commission of Pakistan (“SECP”) and also criminal prosecution viz. Criminal Complaint No.197/2018 lodged by the SECP. It is further averted in the plaint that the defendant No.1 indulged in overtrading, for which he solicited unauthorized investments from third parties including the defendant No.2. On account of global economic recession experienced in (August), 2018, the Royal Securities experienced losses beyond its capacity for correction. Defendant No.2 as a result of such reasons, came to be vested with a claim  against the Royal Securities therefore, lodged claim against the Royal Securities by associating the plaintiff No.2 and the defendant No.1. In April, 2019, the Royal Securities was flooded by investor’s demands for reimbursements and the Royal Securities was unable to cause such reimbursements. In the plaint the plaintiffs have alleged that the defendant No.1 manipulated the plaintiff No.2 into filing suit No.363/2019 in this Court and pleaded that the defendants thereto had obtained negotiable instrument from the plaintiff No.2 under duress and later on it was informed that the actual purpose was to (i) admit to liabilities; and (ii) obtain time for reimbursements through judicial process. Photocopy of the plaint filed by the plaintiff No.2, referred to above, is enclosed as annexures “P/5” with the plaint. Plaintiffs further stated in the plaint that the relationship shared by and in between the plaintiff No.2 and the defendant No.1 compelled investment of blind faith and was as much that without vetting of the pleadings, the plaintiff No.2 proceeded to subscribe his signatures thereon and the plaintiff No.2 remained unware of the deficit which he was being subjected to. It was averred that Plaintiff No.2 on 29.04.2019 at about 0800 P.M. departed to Dubai (United Arab Emirates) where his family resides and he returned to Pakistan on 10.10.2019. It is further mentioned in the plaint that while the plaintiff No.2 was in Dubai, the defendant No.1 informed the persons / claimants that the former had permanently relocated, which compelled the plaintiff No.2’s landlord to break into his premises viz. House No.81, situated in Phase-1 of Malir Cantonment, Karachi and to assume possession thereof. Plaintiff No.2’s landlord was aided and assisted by the defendant No.1. It was further averred that during the conduct of said unlawful exercise, the defendant No.1 removed a briefcase owned by the plaintiff No.2, which contained various Cheque Books and other documents of commercial value to him. It was also stated in the plaint that on his arrival at Karachi the Plaintiff No.2 reported the incident to the concerned authorities. Case of the plaintiffs is that the defendant No.1 has forged signatures of the plaintiff No.2 on the cheque books that were inside the removed briefcase. Details thereof are as under:-

i.         Ibrahim Enterprises           -       JS Bank (Malir Cantonment):   

ii.          Atif Shabbir – Jaima Atif  -        JS Bank (Malir Cantonment):  

iii.         Atif Shabbir                    -        Bank Al Habib (Malir Cantonment):

iv.         Atif Shabbir                    -        Bank Alfalah (Malir Cantonment):

v.         Atif Shabbir                    -        Dubai Islamic Bank(Malir Cantonment):

vi.         Atif Shabbir                    -        Meezan Bank (Malir Cantonment):  

 

            Plaintiffs alleged that following cheques were held by the defendant No.1.

i.                     Dubai Islamic Bank – 01882701 to 50;

ii.                   Summit Bank – 05493296 to 05493345;

iii.                  JS Bank – 40259236 to 20359335;

iv.                 Bank Al Habib – 10524981 to 10525030”

 

 

3.         Case of the plaintiffs is that the defendant No.1 filed backdated complaint at P.S. Malir Cantonment against the plaintiff No.2 stated therein that the plaintiff No.2 has stolen six (06) cheques from a cheque book owned by the defendant No.1 whereas the plaintiff No.2 claimed that the actual complaint was filed in April, 2019 but shown to had been filed on 31.12.2018. It is also stated in the plaint that the plaintiff No.2 and defendant No.1 voluntarily participated in a Share Purchase Agreement dated 10.08.2018 and the transaction under the said agreement ensued in between September 2018 and January, 2019. The claim of the plaintiff is that the defendant No.1 falsely claimed that the plaintiff No.2 had stolen his cheques, the defendant No.1 as per the aforementioned agreement was allegedly engaged in making payments to him. As per the contents of the paint, in September, 2019 a claimant had demanded his investment from Royal Securities when the plaintiff No.2 was away at Dubai and the defendant No.2 was in possession of cheques jointly issued by the plaintiff No.2 and defendant No.1, those cheques were handed-over to the claimant by the defendant No.1 and defendant No.2 proceeded to seek encashment of those cheques in his possession. Since those cheques were dishonoured, therefore, the defendant No.2 lodged FIRs No.222/2019 and 235/2019 at P.S. Malir Cantonment and the defendant No.1 was arrested by police in a case arising out of the FIR No.222/2019.

 

4.         In order to coerce and blackmail the defendant No.2, the defendant No.1 filed Suit No.1432/2019 before this Court against the plaintiff No.2, defendant No.2 and his wife. Per learned counsel for the defendant No.2, the plaintiff No.2 and defendant No.1 tried every possible way to pressurize and coerce the defendant No.2 to withdraw the criminal trials against the plaintiff No.2 and defendant No.1 and settle the dispute against them. The plaintiff No.2 and defendant No.1 through various individuals including but not limited to their brothers used to extend threats to the defendant No.2 and his family. On or about 21.09.2019 various individuals including the brothers of the plaintiff No.2 and defendant No.1 came to the residence of the defendant No.2 and attacked his teenage son whereupon FIR No.256/2019 was lodged. The episode involving his son coerced the defendant No.2 into a settlement, which was entered into by the defendant No.2 on 08.10.2019 with the defendant No.1 and subsequently, into a separate agreement dated 25.10.2019 with the plaintiff No.2. In their individual agreements the plaintiff No.2 and defendant No.1 assumed responsibilities and admitted liabilities to the extent of Rs.101,400,000/- collectively. The defendant No.1 assumed independent liability of Rs.40,000,000/- through agreement dated 08.10.2019 whereas the plaintiff No.2 assumed independent liability of Rs.61,400,000/- through agreement dated 25.10.2019. Defendant No.1 handed over a post-dated cheque bearing No.42465015 of a sum of Rs.40,000,000/- as security. Similarly the plaintiff No.2 made a payment of rs.1,400,000/- in view of his agreement, the plaintiff No.1 father of the plaintiff No.2 became guarantor of the remaining amount of Rs.60,000,000/- and handed over a post-dated cheque of Rs.60,000,000/- bearing No.A-2631624. The Plaintiff No.1 failed to fulfill his obligations pursuant to the agreement. Before the defendant No.2 could encash the security cheque he received summons and notices of Suit No.207/2020 filed by the defendant No.1 in this Court when the defendant No.1 obtained an ad-interim order against the encashment of the security / cheque. Subsequently, the defendant No.2 received summons and notice of the present suit wherein this Court on 25.02.2020 granted ad-interim injunction thereby restraining the encashment of the impugned cheque handed over to the defendant No.2 by the plaintiff No.1 subject to furnishing appropriate surety of Rs.60 Million to the satisfaction of the Nazir of this Court. It reveals from the record that Nazir of this Court submitted report dated 27.06.2020 wherein he shown his dissatisfaction with the documents submitted by the sureties, such documents were not accepted and were returned to the sureties after obtaining receipts. Copies thereof were kept on record. As the plaintiffs have failed to furnish surety in terms of the order dated 25.02.2020 this Court vide order dated 06.08.2020 held that interim order passed on 25.02.2020 is not in field /in operation and has lost its effect, if any. Plaintiffs filed HCA No.148 of 2020 against aforementioned order. However, an order dated 20.08.2020 was passed by the Divisional Bench of this Court whereby aforementioned HCA was disposed of with direction to the appellants (present plaintiffs) to approach the Nazir of this Court with the request to allow the Appellants to furnish fresh solvent surety, who may examine the same in accordance with law and to pass an appropriate order thereon as per Sindh Chief Court Rules (Original Side), after hearing the respondents, who may file objections, if any. Consequent upon the order passed by the Nazir, the learned Single Judge may finally decide the injunction application alongwith pending applications at an early date, preferably within a period of two weeks.

 

5.         This suit was tagged with Suit No.207/2020 filed by the defendant No.1 in this Court against the plaintiffs and defendant No.2. On 08.09.2020 learned counsel for the defendant No.1, who was plaintiff in Suit No.207/2020 informed this Court that the parties in Suit No.207/2020 were negotiating for an amicable settlement outside the Court. Defendant No.1 who is plaintiff in Suit No.207/2020 and defendant No.2 who is defendant No.1 in Suit No.207/2020 entered into an agreement and filed compromise application under Order 23 Rule 3 CPC in Suit No.207/2020. Plaintiff and defendant No.1 in Suit No.207/2020 who are defendants No.1 and 2 in this suit reserved their right to claim all amounts and liabilities due and payable by the defendant No.2 in Suit No.207/2020 (the plaintiff No.2 in this suit). By order dated 24.09.2020 passed in this Suit when the applications were partly heard in presence of all the counsels for the parties, learned counsel for the plaintiffs shown settlement agreement entered in between the plaintiff No.2 and defendant No.2 (copy thereof is enclosed as annexure “P/17” at page-157 with the plaint) and clause-3 thereof was referred, which was reproduced and now is as below:-

“3.       That the 1st party have also agreed to withdraw the cases filed against 2nd party at shortest possible period of time and the 1st party shall not use cheques of second party after clearance amount of Rs.60,000,000/-. The 1st party shall handover cheques No.10525010 amounting to Rs.10,200,000/- to 2nd party”.

           

6.         Learned counsel for the plaintiffs requested for time to take instruction from his client in respect of deposit of the amount of bounced cheques(s) amounting to Rs.60,000,000/- with the Nazir of this Court and thereafter, initiation of proceedings for withdrawal of criminal cases as mentioned in the aforementioned order. Matter was adjourned to a date but instead of filing any statement on 24.09.2020 with regard to the payment of the amount as requested by the learned counsel for the plaintiffs, on 19.10.2020 learned counsel for the plaintiffs filed CMA No.10790/2020 for unconditional withdrawal of the present suit by the plaintiff No.2 on the premise that principal dispute insofar as present proceedings are concerned is confined to the person of plaintiff No.1 and defendant No.2. Learned counsel for the defendant No.2 opposed the application and submitted that CMA No.10790/2020 for undoncditional withdrawal of the present suit has been malafidely filed by the plaintiffs in the present suit. Defendant No.2 filed counter affidavit to the said application. He contended that the plaintiff No.2 has no right to withdraw the present suit. On 15.01.2020 Mr. Muhammad Ali Lakhani learned counsel for the plaintiffs did not press CMAs No.2716/2020 and CMA No.5428/2020 injunction applications in this suit, those were dismissed as not pressed.

           

7.         Heard Mr. Muhammad Ali Lakhani counsel for the plaintiffs and Mr. Sarmad Hani counsel for the defendant No.2.

           

8.         Learned counsel for the plaintiffs contends that the plaintiff No.2 has filed the application for unconditional withdrawal of the present suit bearing CMA No.10790/2020 on the premise that the principal dispute in the present suit is confined to the persons of the defendant No.1 and defendant No.2 and placed his reliance upon the case of the Pakistan Defence Officers, Housing Authority Vs. Muhammad Afsar & others reported in PLD 2015 Sindh 239 wherein it was observed that:-

“6. There is no cavil to the well settled propositions of law that the plaintiff has absolute right to withdraw the Suit at any stage of proceedings, however if he wants to file fresh suit, only then the permission of court is required. In the case in hand, crucial question is that if the permission is not allowed, whether the court will prosecute the case in the absence of plaintiff or in place of plaintiff who will be transposed as plaintiff to proceed further and who will adduce the evidence. The court cannot proceed suit suo motu in absence of plaintiff. It is clear under Order IX Rue 8, C.P.C. that where the defendant appears and plaintiff does not appear when the suit is called for hearing the court shall make an order that the suit is dismissed………………

 

…………..This is because withdrawal of the suit under sub-rule (1) of Order XXIII, C.P.C. is complete as soon as it takes place and in any case when the court is informed. Where the withdrawal of the suit is unconditional such prayer cannot be rejected and in absence of any adjudication of rights there is no question of passing a speaking order….

 

……….The court therefore, in all such cases recognizing plaintiff's absolute right where none was injured. The object was to regulate the exercise of such absolute right for the balance administration of justice when to destroy the right”.

 

9.         Per learned counsel for the plaintiffs, the plaintiffs sought interpretation of term ‘set-out’ as has been set-out in between the parties under the Settlement Agreement entered in between the plaintiff No.2 and defendant No.2 on 25.10.2019. Copy of agreement is enclosed as annexure “P/17” at page-157 with the plaint. Plaintiff No.2 undertook to arrange payment of Rs.14,00,000/- in cash as advance and to hand over post-dated cheque of Rs.60,000,000/- bearing Cheque No.A-26431624 A/c No.99670103998138 titled as “Shabbir Ahmed Arif” of the plaintiff No.1 the father of the plaintiff No.2 as security to the defendant No.2, who acknowledged the same. Plaintiff No.2 undertook to arrange payment within four months and repay to the defendant No.2 well before the due date, if not, the plaintiff No.1 would be responsible and liable for the payment to the defendant No.2 and the defendant No.2 could carry out legal actions on the cheque given by the plaintiff No.1. Plaintiff No.1 was not party to the agreement, as referred to above but he has signed the agreement as witness No.2. Learned counsel for the plaintiffs has placed reliance upon the case of Syed Ali Haider & others Vs. Pakistan International Airline Corporation Limited in Suit No.1798/2016 wherein legal controversy was involved and plaintiffs’ counsel did not wish to lead any evidence and submitted that the entire suit with the pending applications be heard and decided on legal controversy. Learned counsel for the plaintiffs has also placed reliance upon Order XIV Rule 2 CPC and submits that as legal issues are involved in the matter no evidence is required to be produced by the plaintiff No.2 therefore, to the extent of plaintiff No.2 this suit is a ‘short cause’ matter as per Rule 22(O.S.) of the Sindh Chief Court Rules. Learned counsel for the plaintiffs further submits that plaintiff No.2 as per agreement is entitled only to pay cash amount of Rs.14,00,000/- to the defendant No.2.   

           

10.       Learned counsel for the plaintiffs has referred to orders passed on 20.08.2020 in H.C.A. No.148/2020 filed by the plaintiffs against the order passed on 06.08.2020 in this suit when the same was disposed of while observing that all pending applications may be decided within two weeks from the date of the order. Per learned counsel, this Court is merely required to interpret the settlement entered to in between the parties on 25.10.2019. Per learned counsel, interpreting the settlement is a question of law and there is no purpose to determine the issues / disputes subsequent to a full dressed trail which will cause delay in the matter.

           

11.       Learned counsel for the defendant No.2 responding to the arguments of the learned counsel for the plaintiffs contended that the plaintiff No.2 has been declared a proclaimed offender in Criminal Cases No.85/2019 and 86/2019 pending in the Court of IVth Civil Judge & Judicial Magistrate, Karachi (Malir) and the plaintiffs are absconders in law and not entitled to any relief. Per learned counsel, the plaintiffs have filed the present suit in order to malafidely prevent encashment of the cheuqe amounting to Rs.60,000,000/- issued on 28.02.2020 by the plaintiff No.1 in order to protect the plaintiff No.2. Learned counsel for the defendant No.2 urged that on 24.09.2020 learned counsel for the plaintiffs sought time to take instructions from his client to deposit the amount of Rs.60,000,000/- with the Nazir of this Court in terms of the clause-3 of the Settlement Agreement. Learned counsel for the defendant No.2 further submitted that the plaintiffs’ hands in glove together and are abusing the process of law. Per learned counsel for the defendant No.2 in case of fraud and misrepresentation, unconditional withdrawal can be declined by the  Superior Courts. He has relied upon the case of Javaid Iqbal Abbasi & Company Versus Province of Punjab and others reported in 1996 SCMR 1433, the case of Amjad Rashid Khan Malik Versus Mrs. Shahida Naeem Malik and others reported in 1992 SCMR 485, the case of Rafique Hazquel Masih Versus Bank Alfalah Ltd and others reported in 2005 SCMR 72 and the case of Messrs State Engineering Corporation Ltd., Versus National Development Finance Corporation and others reported in 2006 SCMR 619. Learned counsel for the defendant No.2 submitted that as per sub-rule 4 of Order XXIII Rule 1 CPC the Court has no jurisdiction to permit one of several plaintiffs to withdraw without the consent of others and in the present case no consent of the other plaintiff has been brought on record.

 

12.       While responding to the application bearing CMA No.4950/2020 learned counsel for the plaintiffs contended that this Court on 25.02.2020 was pleased to restrain the defendant no.2 from presenting the impugned cheque for encashment. Plaintiffs were called upon to secure the value of the cheque through submission of security before the Nazir. Plaintiffs have failed to furnish solvent surety to the satisfaction of the Nazir of this Court, consequently, on 06.08.2020 the interim order passed on 25.02.2020 had lost its affect and was not in field or in operation. Learned counsel further contended that on passing of order dated 06.08.2020 the defendant No.2 attempted to seek encashment of the cehque but he plaintiff No.1 instructed the concerned financial institution to withhold the payment against the cheque. On such refusal the defendant No.2 registered FIR against the plaintiffs and also filed a summary suit bearing No.798/2020 in this Court against the plaintiffs, which is still pending. Against he order dated 06.08.2020 the plaintiffs preferred High Court Appeal No.148/2020, which was disposed of on 20.08.2020. Learned counsel for the plaintiffs further stated that the criteria given in Rule 22 of the Sindh Chief Court Rules (OS) is not applicable in the present case as the same does not fulfill or attract in the present case. For the sake of convenience Rule 22 of the Sindh Chief Court Rules is being reproduced hereunder:-

22.     What are short causes. The following suits or matters shall be deemed to be short casues:

 

(1)               ex parte suits;

(2)               undefended suits;

(3)               suits in which written statement filed disclose no defence;

(4)               suits under O.XXXVI (in which leave to defend has been granted);

(5)               mortgage suits, rent suits, suits on bonds or acknowledgements;

(6)               objections to commissioner’s report;

(7)               such other suits or matters as may, by special order of the Judge, be directed to be tried as short causes.

Any other suit or matte shall be deemed to be a long cause.”

 

13.       Per learned counsel for the defendant No.2, the plaintiff No.2 is principle debtor and the disputed questions of facts are involved in this suit, which requires recording of evidence of the parties for just, proper and effective disposal of this suit.

 

14.       On perusal of material available on record, it appears that fact of issuance of cheques, execution of settlement agreement between the parties are admitted, the plaintiff No.2 is principle debtor whereas the plaintiff No.1 is father of the plaintiff No.2 who stood surety. Plaintiffs have failed to pay the outstanding amount in terms of the settlement agreement as the plaintiffs themselves approached to this Court and have obtained restraining orders but they were failed to furnish the surety to the satisfaction of the Nazir of this Court. Consequently, the interim order passed on 25.02.2020 was recalled and thereafter, the plaintiffs filed application under Section 22(7) of the Sindh Chief Court Rules read with Order XIV Rule II CPC bearing CMA No.7940/2020 on 08.09.2020 and CMA No.10790/2020 under Order XXII Rule 1 CPC on 15.09.2020. Present suit was filed on 24.02.2020, interim order was obtained on 25.02.2020. Defendant No.2 preferred the High Court Appeal No.148/2020, which was disposed of on 20.08.2020. Both the aforementioned applications were filed by the plaintiffs after disposal of said High Court Appeal filed by them.   

 

15.       In the case of Messrs State Engineering Corporation Ltd supra, it has been observed that :-

5. It is pertinent to mention here that the petitioner had given a guarantee at the time of sanctioning loan facility to the original loanee by the respondent. Guarantee means that it is an undertaking by a 3rd party for one of the parties to the contract whereby the 3rd party binds itself to see that the promise or condition would be fulfilled according to covenant. A contract of a guarantee is a contract to meet the promise or discharge the liability of a 3rd person in case of his default. The person who gives the guarantee is called the surety, a person in respect of whose default the guarantee is given is called the creditor. (see section 126 of the Contract Act).

6. It is also pertinent to mention here that section 139 is not attracted in the present case whereas section 128 is applicable in the given circumstances. The liability of the guarantor/surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract as envisaged in section 128 of' the Contract Act, 1872, unless it B is otherwise provided by the Contract. They are jointly and severally liable to pay the outstanding amount to the creditor. A guarantor cannot shirk from the liabilities incurred by him through the execution of documents as law laid down in the following judgments:--

(i) Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 2005 CLD 95; (ii) Platinum Insurance Company Ltd. v. Daewoo Corporation PLD 1991 SC 1; (iii) Ram Sagar Singh v. Yogendra Narain Prasad Singh AIR 1975 Pat. 239; (iv) Ashrafi Rai v. Parsbadilal AIR 1959 M.P. 26; (v) Dalchand v. State of Rajasthan AIR 1976 Raj. 112; (vi) Madho Sah v. Sitaram Sali AIR 1962 Pat. 405; (vii) Arumugham Chettiar v. Sadasiram AIR 1971 Mad. 321; (viii) Nagpur Nagrik Sahakari Bank Ltd. v. Union of India AIR 1981 A.B. 153; (ix) Budh Singh v. Mukhund Murailal AIR 1975 A.B. 201 and (x) Kali Cheran v. Abdul Rehman AIR 1918 PC 226.

 

16.       The Honourable Supreme Court of Pakistan in another case of Rafique Hazquel Masih supra it has been observed that:-

6. Having given the afore-referred undertaking it is not open for the petitioner to wriggle out of it and raise the plea that the principal debtor should be proceeded against first for the recovery of loan. Furthermore section 128 of the Contract Act specifically mandates that "the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract".

 

17.       In the case of Javaid Iqbal Abbasi & Company supra, the Honourable Supreme Court of Pakistan has held that:-

9. It is true that under Order 23, Rule 1, C.P.C. the respondent No,3/petitioner had the right to withdraw his Writ Petition No.11880/95 unconditionally at any time after its institution and the Court normally could not decline such prayer. It is, however, not correct to argue that the right to withdraw suit unconditionally under Order 23, Rule, 1, C.P.C. is absolute in nature and that under no circumstances the Court would refuse such prayer. The Court may decline the request for unconditional withdrawal of a suit/proceeding where the nature of suit/proceeding is such that both plaintiff and defendant may be entitled to relief in the case. For instance in a suit for administration, for a suit for accounts or a suit for partition of the property the plaintiff cannot claim absolute right to withdraw the suit unconditionally, if the defendants opposed the prayer. Similarly, in cases where the defendant after filing of the suit acquires a right in respect of the subject-matter of the suit, the plaintiff could not be allowed to withdraw the suit where the right acquired by defendant is likely to be defeated by withdrawal of the suit”.

           

18.       In the case of Amjad Rashid Khan Malik supra, the Honourable Supreme Court of Pakistan has held that:-

“3……………….In Sirajuddin v. Mst. Amtul Rauf PLD 1977 Karachi 933, it was observed that although the plaintiff cannot be forced to withdraw the suit but the Court has the discretion to refuse the termination of the proceedings in cases where the defendant has acquired valuable rights or in cases where the plaintiff has sued in representative capacity so that the withdrawal of suit would affect the rights of others or in cases where the parties arrayed as defendants are also plaintiffs in the proceeding so that a decree in their favour must necessarily be passed if the suit culminates in judgment".

4. It is, thus, clear that under Order 23, Rule 1, C.P.C. the plaintiff does not have a right to withdraw the suit at his own free will affecting the rights of the defendants and also the rights of third parties which might have been created by or arising from the orders passed or proceedings taken in the suit”.

 

 

19.       Since learned counsel for the plaintiffs has failed to satisfy this Court for treating this proceeding as ‘short cause’ and for unconditional withdrawal of the present suit by the plaintiff No.2 therefore, both applications bearing CMA No.7940/2020 and CMA No.10790/2020 are hereby dismissed.

 

20.       With regard to CMA No.4950/2020 it has come on record that defendant No.2 has already filed summary Suit No.978/2020 against both the plaintiffs. Certified copy of the aforementioned suit was filed by the learned counsel for the plaintiffs alongwith statement dated 05.01.2021 and is available at page-227 in the Court File. Defendant No.2 has already presented the cheuqes subject matter of this suit after passing of the order on 06.08.2020 before the defendant No.3 and the defendant No.2 had already lodged report when the cheques were dishonoured therefore, present application bearing No.4950/2020 has become infructuous and same is accordingly disposed of.   

 

Karachi

Dated : ____________                                                                    JUDGE


Defendant No.1 filed Suit No.1432/2019 in this Court wherein it is stated that he is not liable to the defendant No.2 and entered into a settlement. After settlement in between the defendants No.1 and 2 Suit No.1432/2019 filed by the defendant No.1 was withdrawn. Defendant No.1 agreed to repayment of Rs.40,000,000/- (Rupees Forty Million only) to the defendant No.1, on that promise he was enabled to obtained bail in FIR No.222/2019 of P.S. Malir Cantonment in Criminal Bail Application No.1388/2019. Defendant No.2 on the basis of the dishonoured cheques initiated adversarial proceedings against the plaintiff No.2 and those proceedings have been settled as against certain promised payments. Plaintiffs on the term that the plaintiff No.2 shall make payment of Rs.61,400,000/- (Rupees Sixty One Million Four Hundred Thousand only) to the defendant No.2 within one hundred and twenty (120) days’ from the execution of settlement agreement and cut-off date for repayment was fixed as 2.03.2020. Plaintiff No.1 as guarantor of the settlement deed has surrendered security payment of Rs.60,000,000/- (Rupees Sixty Million only) through cheuqe bearing No.A26431624 drawn on the Meezan Bank, Malir Cantonment Branch / defendant No.3. Upon repayment of the aforesaid amount the security was liable to be returned to the plaintiff No.1. In consideration Clause-2 of the Settlement Deed, the defendant No.2 extended no objection to the disposal of the pending criminal prosecution as also withdrawal of all cases initiated against the plaintiff No.2. Settlement Deed is enclosed as annexure “P/17” with the plaint. Plaintiffs stated in their plaint that the defendant No.2 has reneged from his contractual obligations as provided under the under the Settlement Deed and has refused compliance of the Clause-2 thereof.

It is further stated in the plaint that the defendant No.1 instituted Suit No.207/2020 before this Court and has attempted to have himself absolved from his independent liability as he accrued against him through the Settlement Deed. Defendant No.1 in his plaint prayed to restrain the defendant No.2 from encashment of the cheques surrendered in pursuance of the settlement and / or initiating proceedings with their assistance. The immediate concern for filing the present suit by the plaintiffs is that beyond 28.02.2020 the defendant No.2 will be able to seek encashment of the security therefore, in such eventuality the plaintiff No.1 would stand exposed to civil and criminal liabilities. Plaintiff confirmed in their plant that payments under the security have been ordered to be withheld on the premise that security cannot be used for any purpose other than as provided therein.  

Per learned counsel for the defendant No.2, the plaintiff No.2 remained as a director of the Royal Securities till late 2018. Initially the defendant No.2 had invested up to Rs.30,000,000/- (Pak Rupees Thirty Million) with the Royal Securities however, subsequently he withdrew his investments. In the year 2018 plaintiff No.2 and defendant No.1 approached the defendant No.2 and persuaded him to invest in the real real estate business which they had started. As the plaintiff No.2 and defendant No.1 were known to the defendant No.2, the defendant No.2 handed over various cheques to them jointly. On the insistence of the plaintiff No.2 and defendant No.1, the defendant No.2 also handed over to them four pay-orders issued in favour of the Chief Executive Officer, Cantonment Board Malir for the purposes of purchasing certain plots through auction. Details of cheques / pay-orders issued to the plaintiff No.2 and defendant No.1 jointly by the defendant No.2 and pay-orders issued in favour of CEO, Cantonment Board Malir through the plaintiff No.2 and defendant No.1. A cheque amounting to Rs.9,000,000/- in the name of the plaintiff No.2 and cash withdrawn and handed over to the plaintiff No.2 amounting to Rs.2,000,000/-. Details thereof are mentioned in para-3 of the written statement of the defendant No.2 and copies of the cheques and pay-orders are enclosed as anenxures “D/7 to D/8. Per learned counsel for the defendant No.2 for the year 2018 and 2019 payment amounting to Rs.76,500,000/- were made to the plaintiff No.2 and defendant No.1 and they informed the defendant No.2 that the profit of Rs.6000,000/- has been accrued on the investment of the defendant No.2, which has been reinvested. Defendant No.2 insisted that they give him some security and/or collateral against his investments. Plaintiff No.2 and defendant No.1 handed over to him various post-dated collateral cheques with a total worth of Rs.101,400,000/-, being the corresponding value of the defendant No.2’s investment alongwith profit accrued thereon. Certain cheques were issued from the joint account of the plaintiff No.2 and defendant No.1 and the remaining cheques were issued by the Plaintiff No.2 from his personal business account. Copies of cheques are enclosed with the written statement of the defendant No.2 as annexures “D/19 to D/25. Details thereof are specified in para-4 of the written statement. In the month of May, 2019 when the defendant No.2 returned from Japan he received information that the plaintiff No.2 had fled the country with investment of numerous individuals / persons, including but not limited to the investments of the defendant No.2. Defendant No.2 confronted the defendant No.1 and his business partner, who are relatives and residing in the same vicinity. Defendant No.1 refused to assist the defendant No.2  and /or to return his money therefore, defendant No.2 approached to the Consulate of Japan and to the police. Defendant No.2 having no other option but to constrained to present/encash the security given to him by the plaintiff No.2 and defendant No.1. On presentation cheques were dishonoured therefore, the defendant No.2 lodged FIR No.222/2019 on 03.09.2019 and FIR No.235/2019 on 14.09.2019 against the Plaintiff No.2 and defendant No.1, both at P.S. Malir Cantonment whereas FIR No.627/2019 on 19.10.2019 against the plaintiff No.2 at P.S. Ferozabad. Defendant No.1 was arrested and the plaintiff No.2 fled away to Dubai and was a fugitive from law. The plaintiff No.2 and defendant No.1 filed various bail applications those were dismissed whereas Criminal Trials No.85 and 86 of 2019 against the plaintiff No.2 and defendant No.1 are pending adjudication.