IN THE HIGH COURT OF SINDH, KARACHI

Ist Appeal No. 78 of 2025

[ Ghulam Sarwar Sheikh v. Muhammad Siddique Brohi another ]

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

***

Appellant

Through Mr. Muhammad Ali Lakhani, Advocate.

Respondents

Date of Hearing:

Through Mr. S. Yousuf Ali, Advocate

25.08.2026

Date of Decision:

25.08.2026

JUDGMENT

ARSHAD HUSSAIN KHAN, J: This First Civil Appeal under Section 96 of the Code of Civil Procedure, 1908, has been directed against the Order and Decree dated 15.04.2025 passed by the learned IV-Additional District Judge, Karachi-East, in Summary Suit No. 222 of 2024. By virtue of the impugned order, the learned Trial Court dismissed the Appellant’s application for leave to defend the suit and decreed the summary suit in favor of the Respondents/Plaintiffs for the recovery of Rs.1,38,00,000/- along with mark-up at the prevailing bank rate from the date of institution of the suit i.e. 17.08.2024 till amount is realized from the appellant-defendant but with no order as to costs. Feeling aggrieved and dissatisfied with the impugned order and decree, the Appellant has approached this Court by filing instant Appeal.

2. The essential facts giving rise to the present appeal are that the Appellant purchased land measuring 30 acres and 39 ghuntas, comprising Survey Nos.41, 42, 43, 45 and 46, situated in Deh Halkani, Tapo Manghopir, District West, Karachi, from the Respondents through a registered Sale Deed executed in the year 2020 for a total sale consideration of Rs.58,900,000/-. Out of the agreed consideration, an amount of Rs.41,500,000/- remained outstanding and payable by the Appellant. For recovery of the said amount, the Respondents initially instituted Suit No.1969 of 2023 before the learned XII Senior Civil Judge, Karachi-West. During the pendency of the said suit, at the request of the Appellant and upon assurances made by him for payment of the outstanding amount, the parties entered into a settlement agreement dated 16.05.2024. Pursuant thereto, the Respondents withdrew the earlier suit, while the Appellant issued four post-dated cheques aggregating to Rs.13,800,000/- towards partial discharge of the outstanding sale consideration. Upon presentation, however, the said cheques were dishonoured by the concerned bank on account of insufficient funds. Consequently, the Respondents instituted a summary suit under Order XXXVII Rule 2, C.P.C. for recovery of the amount covered by the dishonoured cheques. The Appellant filed an application seeking leave to appear and defend the suit; however, the same was dismissed by the learned Trial Court and, consequently, the suit was decreed in favour of the Respondents. Hence, the present appeal.

3. Learned counsel for the Appellant argued that the impugned judgment and decree are illegal, arbitrary and contrary to the settled principles of law. He contended that the learned Trial Court failed to appreciate that the suit was not maintainable on account of misjoinder and non-joinder of necessary and proper parties. He further argued that the application for leave to defend was dismissed on mere a technicality, inasmuch as the reference to “SSGC Ltd.” in the verification clause thereof was nothing but an inadvertent clerical/typographical error on the part of counsel, for which the Appellant ought not to have been penalized or deprived of an opportunity to contest the suit on merits, particularly in view of the right to fair trial guaranteed under Article 10-A of the Constitution. On merits, learned counsel submitted that the subject cheques had not been issued in discharge of an existing and unconditional liability but merely by way of security/guarantee, subject to re-measurement of the land and delivery of vacant possession of the remaining 8 acres by the Respondents, which obligation, according to him, was never fulfilled. He further contended that the subsequent summary suit was barred by the principle of res judicata in view of the earlier proceedings between the parties and that bank return memos in respect of all four cheques had not been produced. According to learned counsel, these circumstances raised substantial triable issues warranting grant of leave to defend. He, therefore, prayed that the impugned judgment and decree be set aside and the Appellant be afforded an opportunity to contest the suit on merits.

4. Conversely, learned counsel for the Respondents supported the impugned judgment and decree and contended that the appeal is devoid of merit. He submitted that the Appellant had voluntarily executed the settlement agreement dated 16.05.2024 and, in pursuance thereof, issued the subject cheques towards payment of the outstanding sale consideration. He emphasized that neither the settlement agreement nor any other contemporaneous document suggested that the cheques were issued merely by way of security or guarantee, as subsequently alleged by the Appellant. Learned counsel further submitted that the Appellant had taken inconsistent and evasive pleas before the learned Trial Court and failed to disclose any bona fide or substantial defence giving rise to a triable issue. He maintained that the application for leave to defend was not supported by a properly verified affidavit and that the defect in verification was substantive in nature and went to the root of the application. According to him, the learned Trial Court was, therefore, justified in declining leave to defend and decreeing the suit. He accordingly prayed for dismissal of the appeal.

5. We have heard learned counsel for the respective parties, given due consideration to their submissions, and carefully examined the material available on record.

6. Before examining the respective contentions of the parties, it would be appropriate to advert to the scope and object of the summary procedure contemplated under Order XXXVII, C.P.C. The provision constitutes a special procedure intended to secure expeditious adjudication of claims founded upon negotiable instruments and other claims falling within its ambit, without subjecting a plaintiff to the delay ordinarily associated with a regular trial where no bona fide defence exists. It is for this reason that the right of a defendant to contest a summary suit is not absolute, but is subject to obtaining leave to defend in accordance with Rule 3 of Order XXXVII, C.P.C. For grant of such leave, the defendant is required to disclose, through his application and supporting affidavit, material facts which, if ultimately established, would constitute a substantial defence or otherwise give rise to a genuine triable issue requiring determination upon evidence. Conversely, where the defence is merely vague, evasive, illusory or unsupported by material particulars and does not disclose any bona fide triable issue, the Court would be justified in declining leave to defend and proceeding in accordance with the summary procedure prescribed by law.

7. Furthermore, where a summary suit is founded upon negotiable instruments, the provisions of Order XXXVII, C.P.C. are to be considered alongside the statutory presumptions contemplated under Sections 118 and 139 of the Negotiable Instruments Act, 1881. Once the execution of the negotiable instrument and the signatures thereon are admitted, a presumption arises, unless the contrary is shown, that the instrument was made or drawn for consideration and that the holder received it for discharge, in whole or in part, of a debt or other liability. The burden, therefore, shifts upon the defendant to bring forth sufficient material to rebut such presumption or, at the stage of leave to defend, to disclose facts capable of raising a bona fide and substantial triable issue regarding the existence or enforceability of the underlying liability. A mere assertion that the cheques were issued by way of “security”, without disclosure of the circumstances in which they were so issued or any supporting material consistent with such plea, would not, by itself, be sufficient to displace the statutory presumption or entitle the defendant to unconditional leave to defend. The defence must be examined in the context of the underlying transaction, the contemporaneous documents and the admitted circumstances to determine whether it is genuine and substantial or merely an afterthought intended to avoid or delay an otherwise enforceable liability.

8. At the same time, an application for leave to defend under Order XXXVII, C.P.C. is required to conform to the procedural requirements governing pleadings and affidavits and must disclose, with sufficient particularity, the material facts upon which the defendant seeks permission to contest the suit. The supporting affidavit must be sworn by a person competent to depose to the facts stated therein and should clearly demonstrate the defence sought to be raised. Compliance with the requirements of verification under Orders VI and XIX, C.P.C. is intended to ensure authenticity and responsibility for the assertions made before the Court. However, it may be observed that every defect or irregularity in verification does not necessarily render an application for leave to defend non-existent or liable to rejection irrespective of its nature and effect. A distinction must be drawn between a defect which goes to the substance of the application or creates uncertainty as to the identity, authority or knowledge of the deponent, and a mere clerical, typographical or formal error which neither causes prejudice to the opposite party nor affects the substance of the defence. The consequence of such defect must, therefore, be determined having regard to its nature and the attending circumstances. Ultimately, the Court is required to examine whether the application, read as a whole along with the supporting affidavit, discloses a bona fide and substantial defence or a genuine triable issue warranting leave to defend.

9. Applying the above principles to the facts of the present case, the material question is whether the Appellant disclosed any bona fide or substantial defence, or raised a genuine triable issue, sufficient to rebut the statutory presumption attached to the subject cheques and warrant grant of leave to defend. The record shows that the Appellant neither disputed the execution of the settlement agreement dated 16.05.2024 nor denied his signatures upon the four subject cheques aggregating to Rs.13,800,000/-. These admitted documents, therefore, constitute the starting point for examining the defence sought to be raised by him. The principal defence of the Appellant is that the subject cheques were issued merely by way of “security” and were conditional upon re-measurement of the land and delivery of vacant possession of the remaining 8 acres by the Respondents. However, a careful examination of the settlement agreement dated 16.05.2024 does not disclose any stipulation making encashment of the subject cheques conditional upon fulfillment of either of the aforesaid obligations, nor does it describe the cheques as security or guarantee instruments. In the absence of any contemporaneous material supporting such assertion, the plea sought to be raised by the Appellant is inconsistent with the express terms of the written settlement and, by itself, does not constitute a bona fide defence or a genuine triable issue warranting grant of leave to defend.

10. From a perusal of the impugned judgment, it appears that while declining leave to defend, the learned Trial Court did not rest its conclusion merely upon the procedural defects in the application but also examined the defence raised by the Appellant on merits and found the same insufficient to warrant grant of leave. The learned Trial Court additionally noticed that the application did not contain a specific prayer seeking leave to defend and that its verification clause erroneously referred to an unrelated entity, namely, “SSGC Ltd.” In our view, although an application under Order XXXVII, C.P.C. ought to be properly framed, verified and accompanied by an appropriate prayer, such defects must be considered in the context of their nature and effect and cannot invariably be treated as fatal. The reference to “SSGC Ltd.” in the verification clause, when the application is read as a whole, appears to be an inadvertent clerical or typographical error and, by itself, would not justify treating the application as non-existent or void ab initio. Similarly, absence of a formally worded prayer would not necessarily warrant rejection where the tenor and substance of the application clearly demonstrate that the defendant seeks leave to contest the suit. Nevertheless, these procedural irregularities do not materially advance the case of the Appellant, since the learned Trial Court also considered the defence on merits. Even if such defects are overlooked, the Appellant was still required to disclose a bona fide and substantial defence or a genuine triable issue. As discussed above, the admitted settlement agreement and the subject cheques, read in the context of the underlying transaction, do not support the subsequent plea that the cheques were issued merely as security or that their encashment was subject to the conditions asserted by the Appellant. Thus, notwithstanding our observations regarding the procedural defects, we find that the ultimate conclusion of the learned Trial Court declining leave to defend does not call for interference.

11. The Appellant’s plea regarding non-delivery of a portion of the land and the pendency of the earlier Suit No.1969 of 2023 also does not advance his case. The record reflects that, during the pendency of the said suit, the parties voluntarily entered into a subsequent settlement agreement dated 16.05.2024, pursuant to which the Respondents withdrew the earlier proceedings and the Appellant issued the subject cheques towards payment of the agreed outstanding amount. The rights and obligations of the parties, for purposes of the present proceedings, are therefore required to be examined in the light of the terms of the subsequent settlement.

12. Significantly, the settlement agreement does not make payment of the amounts represented by the subject cheques conditional upon re-measurement or delivery of possession of the alleged remaining portion of land. Nor has the Appellant pointed to any contemporaneous document demonstrating that the Respondents’ alleged failure in that regard entitled him to withhold payment of the cheques issued pursuant to the settlement. The plea relating to the earlier dispute, therefore, cannot, in the absence of supporting material connecting it with the obligations undertaken under the subsequent settlement, constitute a bona fide defence or genuine triable issue warranting grant of leave to defend.

13. For the foregoing discussion and reasons, we find that, notwithstanding our observations regarding the procedural defects noticed in the application for leave to defend, the ultimate conclusion reached by the learned Trial Court does not suffer from any illegality, perversity or material irregularity warranting interference in appellate jurisdiction. The Appellant failed to disclose any bona fide or substantial defence, or to raise any genuine triable issue, so as to entitle him to leave to defend the summary suit under Order XXXVII, C.P.C. Consequently, the instant First Civil Appeal, along with all pending applications, is dismissed and the impugned Order and Decree dated 15.04.2025 passed by the learned IV-Additional District Judge, Karachi-East, are maintained. There shall be no order as to costs.

JUDGE

Naveed PA