Law: Contract Act (IX of 1872)

Section: 2-A, 2-B, 2-D, 2-E,124,126,127,135

Law: Negotiable Instruments Act, 1881

Section: 4

Law: Qanun-e-Shahadat Order, 1984

Section: 73,133

Law: Stamp Act, of 1899

Section: 36

SummaryThe High Court of Sindh allowed the appeal, setting aside the earlier judgment that denied liability of respondent No.2. The Court held that the letter (Exhibit 5/16) issued by respondent No.2 was a valid promissory note obligating respondent No.2 to pay the appellant. The letter was not a guarantee due to lack of three-party involvement but rather an acknowledgement of debt substituting respondent No.1’s liability. The Court corrected the interest start date to 09.08.1974 and emphasized that technicalities should not defeat substantive obligations under the letter.Core PointsAppellant sold cotton to respondent No.1; payment cheques bounced.Respondent No.2 issued a letter promising to pay Rs. 515,000 after two months.Earlier court held the letter was not proven or enforceable as a guarantee.The Court found the letter admissible, proven, and binding as a promissory note.Guarantee requires three parties; this letter involved only two, so not a guarantee.Letter met all ingredients of a promissory note under Section 4, Negotiable Instruments Act, 1881.Respondent No.2 became principal debtor by issuing the letter.Interest should be calculated from 09.08.1974, not 1984.Technicalities or mislabeling should…

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