IN THE HIGH COURT OF SINDH, KARACHI

Ist Appeal No.147  of 2025

[ Shoukat Ali Vs. Umais Yaqoob ]

 

 

            PRESENT:

            Mr. Justice Arshad Hussain Khan

                                                   Mr. Justice Amjad Ali Sahito        .

 

*************

 

Appellant

Through Mr. Khawaja Muhammad Azeem, Advocate

 

Respondent

Through Mr. Javed Haleem, Advocate

 

Date of Hearing:

01.04.2026

Date of Decision:

01.04.2026

 

JUDGMENT

 

ARSHAD HUSSAIN KHAN, J:         The appellant, through the instant First Appeal under Section 96, C.P.C., has assailed the judgment and decree dated 25.09.2025 passed by the learned District Judge, Karachi-South, in Summary Suit No.31 of 2024, whereby the suit filed by the respondent under Order XXXVII, C.P.C. for recovery was decreed in the sum of Rs.40,00,000/- along with simple interest at the rate notified by the State Bank of Pakistan, from the date of institution of the suit till realization of the decretal amount.

2.         Briefly stated, the respondent/plaintiff entered into an agreement with the appellant/defendant for purchase of a flat situated at Mahmoodabad No.1, Karachi, for a total sale consideration of Rs.24,00,000/-, which was paid partly in cash and partly through bank transfer. Despite lapse of considerable time, the appellant neither handed over possession of the flat nor refunded the amount. Subsequently, the appellant issued a cheque for Rs.40,00,000/-, which, upon presentation, was dishonoured. Despite repeated demands, the amount remained unpaid, whereupon the respondent also lodged FIR No.271/2023 under Section 489-F, P.P.C., and thereafter instituted the subject summary suit for recovery.

Upon service, the appellant entered appearance and sought leave to defend, which was allowed conditionally vide order dated 10.04.2025. However, despite sufficient opportunity, the appellant failed to furnish the required surety; consequently, the matter proceeded ex parte. The respondent led ex-parte evidence in support of his claim, and the learned trial Court, after hearing the parties, decreed the suit vide judgment and decree impugned herein. Being aggrieved, the appellant has preferred the present First Appeal.

3.         Learned counsel for the appellant, while reiterating the contents of the memo of appeal, contends that the impugned judgment and decree are unsustainable, as the learned trial Court failed to appreciate that the cheque in question was a blank security cheque, not issued in discharge of any legally enforceable liability of Rs.40,00,000/-, particularly when part payment had already been made. It is further contended that the dispute arises out of a property transaction involving contested questions of fact and, therefore, was not amenable to summary procedure under Order XXXVII, C.P.C. It is also argued that after grant of leave to defend, the matter ought to have proceeded on merits, and non-furnishing of surety should not have resulted in ex-parte proceedings. Lastly, it is urged that the decree exceeds the admitted amount, resulting in unjust enrichment. Hence, it is prayed that the impugned judgment and decree be set aside and the matter be remanded to the learned trial Court for fresh decision on merits.

4.         On the other hand, learned counsel for the respondents, while supporting the impugned judgment and decree, contends that the same has been passed strictly in accordance with law and does not call for any interference by this Court. It is submitted that the appellant, having failed to comply with the order whereby conditional leave to defend was granted to him to defend the suit, rightly attracted the consequences thereof, and the learned trial Court was fully justified in proceeding against him and decreeing the suit. Learned counsel further submits that the present First Appeal is devoid of merit and liable to be dismissed with costs.

 

5.         Heard learned counsel for the parties and perused the material available on record.         

6.         From the record, it transpires that vide order dated 10.04.2025, the learned trial Court granted conditional leave to defend, subject to furnishing security equivalent to the cheque amount within fifteen (15) days. Admittedly, despite sufficient opportunity, the appellant failed to comply with the said condition. Consequently, vide order dated 10.07.2025, the learned trial Court, having no other option, proceeded ex- parte against the appellant.

7.         It is observed that the primary purpose of Order XXXVII, C.P.C. is to facilitate the expeditious disposal of cases involving commercial transactions and negotiable instruments. In such summary proceedings, the defendant does not possess an inherent right to defend the suit; rather, such a right is contingent upon obtaining leave from the Court. In the instant case, the learned Trial Court exercised its discretion by granting conditional leave to the appellant, subject to the furnishing of security equivalent to the cheque amount. This condition is a standard judicial safeguard to ensure that the recovery of documented debt is not frustrated by protracted litigation. The appellant’s failure to comply with this condition, despite being afforded an opportunity, legalized the consequences under Rule 3(6) of Order XXXVII, whereby the allegations in the plaint are deemed admitted and the plaintiff becomes entitled to a decree[1]. Even in appeal, such disability continues, and the defendant cannot claim a better right to contest the case on merits merely by filing an appeal.

8.         In the circumstances, the appellant cannot now be permitted to raise the plea that the cheque in question was issued as a guarantee or as a blank instrument, and not in discharge of any legally enforceable liability of Rs.40,00,000/-, as such defences could only have been agitated upon compliance with the conditional order and by availing leave to defend. His failure to do so entails the presumption under Section 118 of the Negotiable Instruments Act, 1881, in favour of the holder, and the averments in the plaint are deemed to be admitted. Guidance is drawn from the judgment of the Honourable Supreme Court of Pakistan in Muhammad Ramzan and others v. Ghulam Qadir (2011 SCMR 659), wherein it has been authoritatively held that a defendant who fails to comply with a conditional order granting leave to defend cannot subsequently assail the decree on merits.

9.         In view of the above, no illegality or perversity is found in the impugned judgment and decree warranting interference in appellate jurisdiction. The only scope available to the appellant was to demonstrate a legal error in passing the decree despite non-compliance of the conditional order; however, no such ground has been made out. Consequently, the instant appeal, being devoid of merit, is hereby dismissed. Parties shall bear their own costs.

JUDGE

JUDGE

 

 

 

Naveed PA


[1] Haji Ali Khan & Company, Abbottabad and 8 others  v. M/s. Allied Bank of Pakistan Limited, Abbottabad, [PLD 1995 SC 362], Naeem Iqbal v. Mst. Zarina  [1996 SCMR 1530] and Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim [1999 SCMR 2832].