Law:

Section:

(a) Arbitration Act (X of 1940)--- ----S.34---Civil Procedure Code (V of 1908), O.XXXVII, R.I---Stay of proceedings---Recovery of money---Dishonoured cheque---Defendant sought stay of proceedings on the basis of arbitration agreement between both the parties---Validity---For deciding application under S.34 of Arbitration Act, 1940, the pleadings in the suit were to be considered---Cause of action pleaded in the plaint was based on dishonoured cheques which was an independent cause of action not related to dispute under arbitration clause in the agreement---Proceedings were not stayed in circumstances. Messrs Shell Pakistan Ltd. v. Messrs Bhoja Air (Pvt.) Ltd. 2007 MLD 1424; Mst. Suriya Waseem Usman v. L&M Int. (Pvt.) Ltd. 2002 CLD 624 and Cotton Export Corporation of Pakistan v. Asif Cotton Ginners 1995 CLC 1024 ref. (b) Civil Procedure Code (V of 1908)--- ---O.XXXVII, Rr.1 & 2---Negotiable Instruments Act (XXVI of 1881), Ss.79, 80 & 118(a)---Recovery of money---Negotiable instrument---Presumption---Scope---Suit was based on negotiable instruments/ dishonoured cheques and presumption would be that the same were issued against consideration unless rebutted by defendant. (c) Civil Procedure Code (V of 1908)--- ----S.34, O.XXXVII, Rr.1 & 2---Negotiable Instruments Act (XXVI of 1881), Ss.79 & 80---Recovery of money---Dishonoured cheques---Amount of decree---Determination---Inclusion of interest in decree---Plaintiff sought recovery of his money on the basis of dishonoured cheques issued by defendants in favour of plaintiff---Despite service of process in the name of defendants, no body appeared on their behalf---Plaintiff sought decree for Rs.3,47,19,000 against defendant-company and Rs.20,00,000 against private defendant---Validity---From pleadings it appeared that amount of Rs.20,00,000 was included in the sum of Rs.3,47,19,000 as private defendant had issued cheque on behalf of defendant company as personal guarantee---High Court decreed the suit of plaintiff only in the sum of Rs.3,47,19,000 against both the defendants jointly and severally but liability of private defendant would not exceed Rs.20 million in any case, with interest at the…

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