Lahore High Court Upholds Decree in Rs. 1.62 Million Loan Recovery Suit, Dismissing Appeal over Procedural Lapses
Islamabad 10-02-2025: In a significant ruling, the Lahore High Court, Multan Bench, has dismissed an appeal against a decree ordering him to repay Rs. 1.62 million to the respondent. The Court upheld the original decision of the trial Court, emphasizing the importance of procedural compliance in summary suits filed under Order XXXVII of the Code of Civil Procedure, 1908.
The dispute arose when respondent filed a suit on July 10, 2019, claiming that the appellant had borrowed Rs. 1.62 million and issued cheque No. 31681794 dated March 8, 2019, as repayment. The cheque was dishonored upon presentation. The respondent initiated legal proceedings under the summary procedure provided in the CPC, which allows expedited recovery of debts based on negotiable instruments.
Though the Appellant, was granted leave to defend on August 6, 2019, he failed to file a written statement despite multiple Court directives. This non-compliance led to ex-parte proceedings, and the trial Court decreed the suit in the respondent’s favor on November 26, 2019. The appellant subsequently filed an appeal, challenging the decree on procedural grounds.
The appellant’s legal counsel, argued that the trial Court erred by not treating the leave application as a written statement. They cited precedents under the Financial Institutions (Recovery of Finances) Ordinance, 2001, where Courts permitted such procedural flexibility.
The respondent’s counsel, contended that the appeal was a deliberate attempt to delay the enforcement of the decree. He emphasized that the appellant had no substantive defense, as evidenced by his failure to deny the authenticity of the cheque. The respondent cited Section 118 of the Negotiable Instruments Act, 1881, which presumes the validity of negotiable instruments, and referenced the case Haji Muhammad Siddique Vs. Rana Muhammad Sarwar (2003 CLD 1003) to argue that, once leave is granted, the ordinary procedure of civil suits must be followed.
Mr. Justice Sultan Tanvir Ahmad, presiding over the case, dismissed the appeal, affirming the trial Court’s decree. The Court underscored the following key legal principles:
- The Court ruled that after leave to defend is granted in a summary suit, the defendant is obligated to file a written statement under the procedures applicable to regular civil suits. The judge cited Order XXXVII Rule 7 of the CPC, emphasizing that summary suits, once leave is granted, follow the ordinary civil procedure.
- Referring to Order VIII Rule 10 of the CPC, the Court reiterated that failure to file a written statement empowers the Court to proceed ex-parte and pronounce judgment without recording additional evidence. The Court referenced Sh. Abdus Saboor and Brothers Vs. Ganesh Flour Mills Ltd. (PLD 1967 Lahore 779) and Mst. Hakumat Bibi Vs. Imam Din (PLD 1987 SC 22), reinforcing the Court’s discretion in such cases.
- The Court upheld the presumption under Section 118 of the Negotiable Instruments Act, 1881, stating that the Appellant’s failure to rebut the authenticity of the cheque strengthened the Respondent’s case.
Key Case Law Cited in the Judgment
- Haji Muhammad Siddique Vs. Rana Muhammad Sarwar (2003 CLD 1003)
- Haji Abdul Wahid Vs. Hoechst Pakistan Limited (1993 CLC 1291)
- Muhammad Ali Khalid Vs. Muhammad Talha (2024 CLC 1184)
- Sh. Abdus Saboor and Brothers Vs. Ganesh Flour Mills Ltd. (PLD 1967 Lahore 779)
- Mst. Hakumat Bibi Vs. Imam Din (PLD 1987 SC 22)
Concluding that there were no procedural errors in the trial Court’s decree, the Lahore High Court dismissed the appeal and upheld the order for the appellant to repay Rs. 1.62 million. The judgment serves as a reminder of the strict procedural requirements in summary suits and the Courts’ limited tolerance for procedural non-compliance.
