Law: Civil Procedure Code (V of 1908)

Section: 3,2

Law: Negotiable Instruments Act, 1881

Section: 118

Civil Procedure Code (V of 1908)--- ----O. XXXVII, Rr.3 & 2---Negotiable Instruments Act (XXVI of 1881), S.118---Suit for recovery---Summary Procedure on Negotiable Instruments---Application for leave to defend, grant of---Principles---Question before High Court was whether an application for leave to defend should be allowed where factum of execution of cheque was denied by defendant and there existed no arrangement/agreement between the parties requiring consideration---Contention of plaintiff, inter alia, was that said cheque was to be deposited in his account and subsequently be paid to a Bank, as plaintiff had been a guarantor in a finance facility obtained by defendant, upon which defendant had defaulted---Validity---Under S. 118 of the Negotiable Instruments Act, 1881 no doubt a presumption was attached to a negotiable instrument and burden lay upon person denying same to prove such presumption contrary, however said presumption was rebuttable by evidence---In the present case, there was nothing on record to show any agreement/ arrangement between parties whereupon negotiable instrument in shape of a cheque was issued in favour of plaintiff and said cheque was issued without any consideration---Defendant also brought on record evidence to suggest that said cheque had been misplaced and then forged---In absence of any document showing an agreement / arrangement between the parties, the logic for issuance of subject cheque in name of plaintiff, which was to be deposited by plaintiff first in his account and then after encashment thereof, funds were to be paid to the Bank, could only be determined after evidence was led---Requiring deposit of amount of subject cheque in Court would only tantamount to imposing an unduly onerous obligation and would stifle the very grant of leave by rendering it illusory---High Court observed that defendant was entitled to grant of leave to defend, as factum of execution of cheque as well as consideration for payment of said cheque remained clouded and required evidence---Application for leave to defend was allowed, in circumstances. Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 and Kodak v. Alpha Film…

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