Law: Code Of Civil Procedure, 1908.

Section: 2, 3 & 4, 34, 13

Law: Limitation Act, 1908

Section: 181, 164

Law: Negotiable Instruments Act, 1881

Section: 79 & 80

Law: Pakistan Penal Code (PPC),1860

Section: 489-F

Summary

The appellant filed a summary suit under Order XXXVII CPC for recovery of Rs. 20,00,000 based on a dishonoured cheque allegedly issued by the respondent. Since the respondent failed to file an application for leave to defend within the prescribed time, the trial court decreed the suit ex parte on 04.07.2016.

The respondent later applied under Order XXXVII Rule 4 CPC to set aside the ex parte decree, contending that he was in jail during the proceedings, could not effectively contact his lawyer, was not a party to the original sale agreement, and that the underlying transaction had already been cancelled. He also pointed out that criminal proceedings under Section 489-F PPC had ended in his acquittal and that other related civil litigation had revealed disputed questions of fact.

The trial court accepted the application and set aside the decree. The High Court upheld that order, holding that the respondent had successfully established "special circumstances" under Order XXXVII Rule 4 CPC, including his incarceration and the existence of substantial triable issues. The Court further held that an application under Rule 4 is governed by Article 181 of the Limitation Act, 1908 (three years), not Article 164 (30 days). Since the application was filed within three years, it was within limitation. Consequently, the appeal was dismissed.