IN THE HIGH COURT OF SINDH, KARACHI

Ist Appeal No.63 of 2026

[ Fahad Niazi v. Masood Ahmed ]

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

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Appellant :	Through Mr. Muhammad Qasim Niazi, Advocate
Date of Hearing:	15.09.2026
Date of Decision:	15.09.2026

JUDGMENT

ARSHAD HUSSAIN KHAN, J: Through the instant First Appeal under Section 96 of the Code of Civil Procedure, 1908 (“C.P.C.”), the Appellant has assailed the Judgment and Decree dated 21.04.2026 passed by the learned Additional District Judge-XII, Karachi-East, in Summary Suit No.87 of 2025, whereby the suit instituted by the Respondent under Order XXXVII C.P.C. for recovery of Rs.2,70,40,000/-, was decreed and the Respondent/Plaintiff was held entitled to recover the said amount from the Appellant/Defendant.

2. The essential facts giving rise to the instant appeal are that the Respondent and the Appellant were engaged in business dealings with each other and, in the course thereof, entered into an Agreement of Sale dated 05.07.2023 in respect of Plot No.314, Block-A, measuring 200 square yards, situated in Saadabad Cooperative Housing Society Limited, Scheme No.33, Karachi, for a total sale consideration of Rs.30,000,000/-. According to the Respondent, pursuant to the said agreement and with mutual consent of the parties, he paid an aggregate amount of Rs.27,040,000/- to the Appellant on different dates and occasions, against which the Appellant was obliged to transfer the suit property in his favour. The Appellant, however, allegedly failed to fulfil his obligation to transfer the property. It is further the case of the Respondent that, after repeated efforts on his part, the parties entered into a Mutual Agreement dated 27.11.2023, whereby the Appellant, in acknowledgment and settlement of the amount received by him, handed over fourteen (14) cheques drawn on Bank Islami, Model Colony Branch, Karachi, aggregating to Rs.27,040,000/-. Upon presentation on their respective dates between 10.01.2024 and 10.12.2024, all fourteen cheques were dishonoured, with the respective return memos recording that payment had been stopped by the drawer. The Respondent thereafter allegedly attempted to contact the Appellant for settlement and recovery of the amount, but without success, whereupon an FIR was lodged against the Appellant in respect of the dishonoured cheques. The Respondent ultimately instituted Summary Suit No.87 of 2025 under Order XXXVII, C.P.C. for recovery of Rs.27,040,000/-. Upon service of summons, the Appellant entered appearance and sought leave to defend the suit. The learned Trial Court, vide order dated 29.01.2026, granted conditional leave to defend subject to furnishing surety/security in the sum of Rs.3,000,000/- within thirty (30) days. The Appellant failed to furnish the requisite security within the stipulated period and thereafter filed an applications under Sections 148 and 151, C.P.C., seeking extension of time and recall of the aforesaid order. The learned Trial Court, finding no sufficient justification for non-compliance with the condition imposed while granting leave to defend, dismissed the said applications vide order dated 16.03.2026. Consequently, the defence of the Appellant was struck off and he was debarred from furnishing the requisite surety. The learned Trial Court thereafter proceeded to examine the Respondent’s claim on the basis of the plaint and the documents produced in support thereof, including the Agreement of Sale dated 05.07.2023, the Mutual Agreement dated 27.11.2023, the fourteen cheques and their respective dishonour memos. Upon finding the claim unrebutted and supported by the material on record, the learned Trial Court decreed the suit vide Judgment and Decree dated 21.04.2026. Being aggrieved thereby, the Appellant has preferred the instant appeal seeking setting aside of the impugned Judgment and Decree and adjudication of the matter on merits.

3. Learned counsel for the Appellant contended that the impugned Judgment and Decree are arbitrary, illegal and unsustainable in law. It was submitted that the learned Trial Court failed to properly exercise the jurisdiction vested in it under Section 148, C.P.C. by mechanically rejecting the application seeking extension of time for furnishing the requisite surety. Learned counsel submitted that the delay was bona fide and attributable to circumstances beyond the Appellant’s control, including the international travel of the proposed surety, who was the Appellant’s brother, rescheduling of Court working to four days a week and suspension of Court work on certain relevant dates. Learned counsel further argued that the learned Trial Court erred in striking off the defence without appreciating that the Appellant had raised substantial and triable issues, including the allegation that the cheque book had been snatched at gunpoint prior to the alleged date of issuance, coercion during police custody and material contradictions regarding the nature of the underlying transaction. It was therefore urged that procedural technicalities ought not to defeat substantive justice and that the impugned Judgment and Decree be set aside.

4. We have given careful consideration to the submissions advanced by learned counsel for the Appellant and have carefully perused the available record.

5. The primary question requiring determination is whether, in the facts and circumstances of the case, the learned Trial Court committed any jurisdictional error or material irregularity in refusing further extension of time and, consequently, in proceeding against the Appellant after his failure to comply with the condition attached to the leave to defend.

6. It may be observed that Order XXXVII, C.P.C. prescribes a special procedure for suits falling within its scope and is intended to secure expeditious adjudication of claims based upon written contracts and negotiable instruments. Where leave to defend is granted subject to furnishing security within a specified period, the condition so imposed is required to be complied with within the time prescribed by the Court, unless such time is extended upon sufficient cause being shown. The power under Section 148, C.P.C. is discretionary and is required to be exercised judicially, having regard to the circumstances placed before the Court and the conduct of the party seeking enlargement of time.

7. In the present case, the Appellant was granted conditional leave to defend vide order dated 29.01.2026 and was afforded thirty (30) days to furnish the requisite security. The Appellant, however, failed to comply with the said condition within the stipulated period and, only thereafter, on 16.03.2026, filed an application under Sections 148 read with 151, C.P.C. seeking a further period of thirty (30) days for furnishing the requisite surety. The grounds urged were that the Appellant’s brother, who was stated to be arranging the surety, had gone abroad to perform Umrah and that, owing to the prevailing international situation, the working days of the Courts had been rescheduled to four days a week.

8. The learned Trial Court considered the explanation furnished by the Appellant but found the same insufficient to justify enlargement of time. Significantly, in the application filed on 16.03.2026, the Appellant himself stated that his brother, who was allegedly arranging the requisite surety, had “right now” gone to perform Umrah. Thus, the circumstance relied upon was one existing at or around the time of filing of the application and does not explain what prevented the Appellant from arranging and furnishing the requisite security during the thirty-day period originally granted vide order dated 29.01.2026. No explanation has been offered as to what steps, if any, were taken by the Appellant during the said period to comply with the condition imposed while granting leave to defend. The subsequent non-availability of the appellant’s brother, therefore, could hardly constitute an explanation for the Appellant’s failure to comply with the condition during the period when the order remained capable of compliance. Similarly, the rescheduling of Court working days to four days a week did not preclude the Appellant from arranging and furnishing the requisite security within the stipulated period. The circumstances relied upon by the Appellant, whether considered individually or cumulatively, do not demonstrate any legal or factual impossibility, or any circumstance beyond his control, which prevented compliance with the order dated 29.01.2026 within the time afforded by the Court.

9. 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 can defend the suit only upon obtaining leave of the Court in accordance with the procedure prescribed by the said Order. In the instant case, the learned Trial Court granted conditional leave to the Appellant, subject to furnishing security of Rs.3,000,000/-. The Appellant was thus afforded an opportunity to contest the suit on merits, subject to compliance with the condition imposed by the Court. His failure to comply with the said condition attracted the consequences contemplated under Order XXXVII, C.P.C.

10. It is also significant that the Appellant was not denied leave to defend altogether. Rather, the learned Trial Court exercised its discretion in his favour by granting conditional leave, subject to furnishing lesser security. The Appellant, therefore, had an opportunity to contest the suit on merits, subject to compliance with the condition imposed by the Court. Having failed to comply with the said condition despite the time granted, and the subsequent application seeking extension of time having been considered and declined, the consequences prescribed under Order XXXVII, C.P.C. followed. The learned Trial Court was consequently justified in proceeding with the suit in accordance with the statutory scheme applicable to such proceedings.

11. The plea that the Appellant had raised substantial and triable issues also does not, by itself, furnish a ground for interference at this stage. The merits of the alleged defences could have been examined, if the Appellant complied with the condition upon which leave to defend was granted. The Appellant cannot, after failing to comply with the condition attached to the leave to defend, seek to bypass the procedural consequences of such non-compliance merely by asserting that he had a defence on merits.

12. The same principle applies to the allegations concerning the alleged snatching of the cheque and coercion during police custody. These allegations constitute matters of defence which could have been examined had the Appellant acquired and retained the right to defend the suit by complying with the condition attached to the leave granted by the learned Trial Court. We are, therefore, not called upon in the present proceedings to determine the truth or otherwise of those allegations on their merits; rather, the question is whether such pleas can, in the circumstances of the case, overcome the consequences arising from the Appellant’s failure to comply with the conditional leave order. In our view, they cannot.

13. So far as the cheque is concerned, the statutory presumption arising under Section 118 of the Negotiable Instruments Act, 1881, remained unrebutted on the record, as the Appellant failed to establish his defence in accordance with the procedure applicable to the proceedings after conditional leave had been granted. In this regard, guidance may be drawn from Muhammad Ramzan and others v. Ghulam Qadir [2011 SCMR 659], wherein the Honourable Supreme Court considered the consequences arising from failure to comply with an order granting conditional leave to defend.

14. In view of the foregoing discussion, we find no illegality, material irregularity or jurisdictional error in the impugned Judgment and Decree dated 21.04.2026 warranting interference in appellate jurisdiction. The learned Trial Court, having considered the application seeking extension of time and having found no sufficient justification for the continued non-compliance, rightly proceeded in accordance with the consequences flowing from the Appellant’s failure to comply with the condition attached to the leave to defend. The pleas regarding the nature of the transaction and the circumstances surrounding the cheque could not, in the facts and circumstances of the present case, overcome the consequences arising from such non-compliance.

15. Consequently, the instant appeal, being devoid of merit, is hereby dismissed. The impugned Judgment and Decree dated 21.04.2026 passed by the learned Additional District Judge-XII, Karachi-East, in Summary Suit No.87 of 2025 is maintained. The parties shall bear their own costs.

JUDGE

Naveed PA