M/s.Mllwala Sons Ltd. (Appellant) VS M/s. Jaymissco & Ors. (Respondent)

I

IN THE HIGH COURT OF SIND HAT KARACHI

High Coufi Appeat No.l50 of I989

Present: I4L Justice Khilii Arif Hussain Mr. Justice Muhammad Karim Khan Asha

Dates of hearing: 22.4.2009 ond23.4.2009

t Appellant; Millwala Sons Limited through Mr. eazi Faez Issa, advocare. Respondents: Messrs Jaymissco and another through Mr. Fazle advocate.

JUDGMENT

MUHAMMAD KARIM KHAN AGHA. J., This High Courr Appeal a ses Ghani Khan,

out

of judgment dated 19.4.1989, passed by leamecl Single Judge of this Court (hereinafter refered to as the,,lmpugned Judgment").

In essence, there are two

main points of Appeal, raised by the appellants. Firstly, that the Iearned Single

Judge ened in allowing interest from 09.8.19g4 instead of from 09.8.1974.

Secondly, that the leamed Single Judge found that the alleged guaranree letrer.

exhibit 5/16 (the Letter), had not been proven in accordance with rhe law and thar even then the Letter, in effect, amounted to a substitution of the debtor. which was not waranted by any provisions of law and as such respondent No.2 could

not be legally liable for its commitment made in the Letter.

I 2. The brief facts of the case are that the appellant sold and delivered to respondent No.l, 500 bales of cotlon for the price of Rs.515,461/42. In paft_ payment of the goods, the respondent No.l made payment to the appellant through five different cheques. These cheques on presentation were dishonored.

3.As a result the appellant threatened to institute recovery proceedings for the unpaid amount. The respondent No.l, however, offered to ensure payment of the goods and to this end respondent No.2,pursuant to a letter dated 25.05.1974 from Respondent No 1, on 28.5.1974 guaranteed the payment of Rs.515,000/- l.I and issued a credit note in favor of the appellant i.e. the Letter. The respondent

No.2 agreed to pay the said amount on or before 2g.7.1924.

IIt the evefl! neither respondent No.l Dor the rcspondent No.2 lnade ary paneft to the appellant bar a payment made by rcspondent No.l for a sum ofRs.S0,000/_.

4.The upshot was thar the appellant filed recovery Suir bearing No'309/1974 against both respondents No.l and 2. The respondents filed their rsspective written statements in the said suit, the Court framed the issues at page 4 ofthe Impugaed Judgment and after recording evidcnce nrd hearing the parties

a passed the Impugned Judgment.

5, Leamed counsel for the appellant, reiterated that the leamed on the fiIst ground of appeal, has single Judge ened in allowing interest frora 0g.g.lgg4 instead of09.8.1974, which, according to him, was a typographical enor as the suit wss instituted on 09.8. I

6.With regard to the seco[d ground, the appellant,s counsel argued that the Letter, was an admissible document under Adicle 73 ofthe eanoon_e-shahahdat Order, 1984, and since it had not been cha.llerged in cross examination it stood proven wder Article 133 ofthe eanoon_e_shahahdat Order, ,9g4,.

7.Furthermore, according to him by the Letter, respondent No.2 had undeftaken to pay to the appellant the sum ofRs.5l5,000/_ afler rwo months. The * said Letter had bee,, given by respondent No.2 in consideration ofthe promise of the appellant not to sue Respondent No I and was a guarantee which wns I enforceable by the appelant against respondelt No.2 regardress whether or not it was a substitution of suety. That the leamed Single Judge had ened in holding that the substitution of respondent No.2 for respondent No, r was not warranted by any provision of law. ' I According to the leamed counsel for the appellant, under the law, the document amounted to a guarantee and the appellant was entilled to rely a upon it and the respondent No.2 was obliged to make payment under it. In support ofhis +J arguments, especially that the Letter amounted to a guarantee, he refered to the I 'l

Contact, Act, 1872 (.,Act, Ig72) and, in particuiar, he placed reliance on Sections 2-A, 2-8, 2-D. 2_E and Sections l26and l2ToftheAcr, 1g72.

9.When asked by the Court, leamed counsel for the appellart conceded that the Letter could not amount to an indemnity under Section 124 of Act, 1872.

Leamed counsel for the appe,ant has placed rcliaoce on the forowing case raw in support of his various colltentionsi

(r)NIJR JEHAN BECUM v. MUJfABA ALI NAeVI (lqql SCMR

2J00)

(ii){ (iii) :*}fz ENGINEERING slAtE Il11!y, srArE (2007 scMR 5r8).

CORpN. LTD. v. NATIONAL

DEVTLOPMENT FINANCE CORPN. (2006

SCMR ;i;;,

(iv)GH^U-LAM RASoOL v. NAZTR OF THE snrort r+icritouar

0992 CLC 2490),

(v)NA_IIONAL BANK OF pAKtS tAN v. LTD. (PLD 1992 Karachi 295)-

ALAM INDUSTRIES

(vi)YIlguE HAZQUEL rr4eSru v. BANK ALFALAH LrD. (2005 scMR 72).

(vi, lylYJ, RAGHT,NANDAN (AtR te55 RAJASTHAN (VoI.42, C.N.28), 8s

(viii)ADAM ALI AGARIA v. ASIF HUSSAIN (j

996 MLD 322),

(ix)I1A^B-IB^-BjNK LtMlrED v. SHALiM^R

( 1993 CLC 1295),

srLK Mril;,LrD.

(x)GOPALDAS v. RAMDEO (AIR 1957 Rajasrhan 360 (V 44 C 138 Nov.)

(xD FARID^ AKHTAR HADI v. MUHAMMAD (1993 CLC 2015), and

LATIF GHAZI

(xii)RAHIM BAKHSH v. ALLAH JIWAYA (19

92 CLC 2433)

l0 0n the other hand, leamed counser for rcspondent No.2 has refuted the * arguments of the appellant, in particular, he has contended that the Letter was not a gua*ntee. This was because, according - to him, a guarautee [eeded to be made { b"t*""n ttr"" panies but in this case it had only * -r" 0",**, *" O*n" i.e, the appellant and Respondent No 2.

ll. He contended that this was simply a business transaction betwee! the parties and had nothing to do with the law of guarantee. He agreed with the findings of the leamed Single Judge that, in essence, the lespondent No.l had simply passed on its liability to respondent No.2 and the Letter was nor enforceable against respondent No.2 by the appellant. Ir suppod of his contention that the Letter could not amount to a guarantee he placed reliance on

.!} the case ofF-AI4CHANDRA v. SHApURJI (AIR I940 Bombay 3 t5).

12.Furthelmore, he contended that even if the Letter could be regaded as a guarantee this had been frustrated by the subsequent paymcnt of Rs.50,000/_ by respondent No.l to the appelrant which the appellant admitted receiving ir its Plaint In support of this contention he placed reriance on section 135 ofAcr.

lJ. We have reviewed the fiie in detail and carefully considered the submissions ofleamed counsel for the respective parties.

{ 14' The first point of appear rcgarding the e,,or in the yenr when payment for ioterest should start, would seem to be a typo$aphical efior since the Court record shows that the institution ofthe proceedings was on 0r.g,1974 rather than on 09.8.1984. The respondents, counsel in his submissions has not addressed this point. We, therefore, find that the date from when interest should run in the Irnpugned Judgment was ircorectry mentioned as 09.g.r9g4 aod should have been read as 09.8.1974.This point ofappeal is. rherefore. allowed.

l5 The second point of appear revolves around the interpretation ofExhibirs 5/l 7 and 5/1 6. For convenience sake both these exhibits are set out as under

Exhibir 5/r7

Messrs Al-Ata Textile Mills Ltd.. "May 25,19?4 Adamjee House

f I.I. Chundrigar Road Karachi - 2.

Dear Sirs,

Please refer to the discussions rhat Chairman the orher day when it was the wriler had with vour

agreed as unj".,'-."

That there is an amount of Rs.10.4g.099.g{ (Rupees ten lakhs. fony eight thousand. nin"ry nine and eighry tbur Daisas only) as due and payabte by you to us heinfih. ittll";""r#i:;

the raw cohon supplied to you by us.

., fhu,.a sum of Rs.s.t5.000r (Five lakls and fifteen liousand.only) oul of rhe above amount i, puyufrt" Uy-r.-io Messrs .Millwalla Sons Lrd as rhe cosr of rhe pan ;;; .Jjt supplied to you. "i,#

tli,jY,t'.i:::!il',fl L;::.i,f.T*i,"j,1J:,1i""i:l: yi*_.:l,l. Frere Road. Karachi. for the amounl ot Rs.5.t5,000/_ oebttrng the same to our account.

We w-ould. therefore. request you necessary credit lefler as approvedty kindly to issue rhe the Chainnan.

Thanking you, Yours faithfirllv- For JAYMtSSCd.;

c{: MessN Millwalla SoDs Ltd..

Kasimji Musabhai Bldo.- Opp; Sird Madressah, "

a.

+ Frere Road, Karachi.

Exhibit 5/16 (the Lctterl

Messrs Millwala Sons Ltd..

'28d'May, lg74 Kasimj i Musabhai Buildins Opp. Sindh Madressah. ' Frere Road

KAXACHI.

Dear Sirs,

As.per instructions of M/s JAyMISSCO, you a credil letrer for the amount we hereby issue of Rs.5.t5.000r_ iR;pie"s;*i"' trneen thousand only) which amounr shall b" afler rwo months fiom the receipt lhereof. p"y"bl;;;;;t;;

Yours faithfully,

(SYED MOINUL HAQUE)

General Manager,'

,,- 16. The preliminary point arises whether or not these documents, in particular, Exhibit 5/16 (the Letter), stands pioven. According to the Impugned a- ;udgrn"rrt, fxhibit 5/16 was found not to be proven.

l'7. Only one witness gave evidence in this case and he was pW-I, Noor Bhai, who, in his evidence, stated that the lespondent No.l provided them a guarantee letter and he produced two such letters in this context from rcspondent No.l as Exhibits 5/16 and 5/17. No objection to the admissio.r of these documents was made at that time. During cross_examination neither rf flre 6!sy.

two exhibits were ever brought into question. No witness appeared for the Defense refuting either the admissibility or proof of the J documerts.

18, Article 73 of the eanoon_e-shahahdat Order. 19g4, provides for the admissibility of primary evidence thrcugh docunentary folm.

Under this Anicle both exhibits were admissible.

19.Under Article 133 of the eanoon_e-shahahdar Order, 19g4, it is well settled law that if any evidence is not disputed in cross_exarnination then it is deemed to be an admitted fact. Reliance is placed on the case of SIIERAZ

I TUFAIL v. STATE (2007 SCMR

5 I 8).

20.In rhe case of NUR JEHAN BEGUM v. ?r repoded as l99l SCMR 2300 it was held as under:_

MUJTABA ALI NAQVI

"The principle enunciated in lhe commenlaries .rnd r,,lings is thal marerial parr of his evidence a \^[ness ::.j:-:l examrned irt ma1 be inlerred lhal is nol cross_ the lruth Deen accepted. "f.r"f, "r".""ii".;; .Slatemenl of a uirness which i, .",;;i-;; conlroversy ofthe case pafiicularl) wtren it srares tris case ana itre same is nor challenged b1 the othei side dire"fl ,,, 1",,i[",il.if,., ,ui;

such.. unchallenged slaremenr should b" gi;;; tuii ' .'#;

usually accepled as lrue unless displaced by ..liubl.. ;;;;i clear evidence.,' ;;

21.Accordingly, we find that the leamed Single Judge ir the Impugned Judgment ened in finding that documents, Exhibits 5/16 and 5/17, were not proven. We find both ofthese documents to be prcven.

22.The next issue, is-- what ....*. actually is the status of the Letter. The appellant,s counsel has argued that by vifue of vadous sections of Act, Ig72, which he has cited above, the Letter amounted to a gu[antee. In order to appreciate the a, appellant,s aryumerrts that under Act, 1g72, the Letter amounted to a guarantee. it is helpful to reproduce Sections 126 ari 12.1 of Act, lB72:_

"1.26. A -conlract of guarartee.. is a n- _ the promise. discharge the liabilir) of conlract to oerform a third person i" $lfi:]]., T.

person. who girei rhe gua.antee. surery . the person in respecl of whose is "d-;;;l:

caled the default tf,c gua.anree is grven is called.rhe ..principai debtor..and rf,. p.r.on ti *f,orn ii.

guarantee is given is called the ,,creditor,,. d d;r";;;;;; either oral or wriften.,'

I27. Anyhing done. or an1 promise made. for lhe benefit of_the?rincipal debror may be a"sufficient ,$ .on.la"ru,io"',o ii" suely tor grving the gu,uanlee...

23.ln support of his contention that the document is a guarantee, leamed counset lor the appellant has in panicular placed reliarce on the following cases:_

(i)STATE ENCINEERINC CORPN DrvglopMENiiiNorirc!"#rrliro#t.r'*o,f .,o"o, (iD RAFIQUE HAZQUEL MASIH v BI f

\NK ALFALAH LID (2005

scMR72);

(iiD ffiJ35i,?i}: JJ,} T#&ilT,''1?HSTRIAL CREDIT 7 /- 24. We are, however, not pemuaded by the arguments -* of the appellant,s counsel that the Letta amounts to a guarantee under the above cited sections and case law. A guarantee needs the invol,r'emeot ofthtree padies, however, it seems that the Lettfl only involves two parties, therefore, it cannot fall within the definition of a guqantee. This is more so since the Letter was given by respotdelt No.2 afier the cont&ct of sale between the respondent No.l and the appellanr had alrcady been breached by respondent No.l.

25.We are ofthe considered view that the leamed Single Judge rightly foun<t that the effect ofthe Letter was a substitution of liability from respondent No.l ro resporldellt No.2 and was not a guarantee. Reliance is placed on the case of BACHA CO-OPEP"ATIVE SOCIETY v.

DEBI MANGAI PRASAD (AIR

I937

Patna 410) and the case of RAMCEANDRA v. SHAPURII (AIR 1940 Bombay 3 I 5). I[ the latter case it was held as under!

".....A contract of guarantee involves -? l.-::y,,g rhe principar 0"0.. p.uu(s are pnv). here musl

I

-otl"ii,,#,":

a contract. first ofall.

be 'ff,ill;:X:

hetween the p ncipal debtor and the creditor. That lays the founiai;;;; whole trarsaction. Then there must be ;; a contract between the surety and the credilor. by which lhe surely guaranlees lhe debt, considerarion lor rhal conrracl m:ry move rurr rne9"rq.th.

creolor or hom rhe principal debtor or either both. Bur ilthose conrracrs.^rhe cu.e i, one of indemniry. T--1T:rl, conracr f, i" ::r:li:l" .?

of guarantee rhere musr be if,ira "ra., oJ_ltrch the_principal debror expressly or impliedli" ,"qr.ai;;;; *r*.i sulery to acl as sulely. Unless that element impossible to work oul ihe rjghrs and liabiliri* ir;r"r;ri, ir'i;

the Contract Act.....'. "frf,J,i*"iy r"a".

26.Du.i.g his arguments, leamed counsel for the appella[t had submitted .6 that ifthe Letter was not a guarantee then in the altemative it could amount to a

promissory note, in which case he could rely on it in that context. This is supported by his Memo ofAppeal, which sets oul at ground ,.B,,as follows!

"8. That rhe leamed Single Judge failed lo appreciate letrer of lhe respondenr No.; rhat fie daled 28.5.74 (E_;:;i;;;l;,.;;:; admitted document which cleart N^o 2 had undenaken r. p"y ," ,h:ptilb;liTl aner two monlhs. The said docume-nt_ .li li;_,:..p:gH rcspondent No.2 in consideratiol h"rlr;;;r";;;;; ;;II:

not ro sue therespond;'i;l'#,:l li: xji#;T,"::'*"3il1,,,7 any event, and without prejudice to the abor" le cr clea y amounted to an acknowledgm";,';i;;;,;;";;;ir; ".r*r1ir,*,i"irr) t. respondenl No.Z to the Dlaihtiff oJ on amount o! Rs 5 t5 0000 ' aaaeai r} ritalics

27' Ll our view it is opcn to the appellant to argue in the altemative that the Letter is, in fact, a promissory note, which is enforceable against Respondent No 2' Furtirermore, there is authodty that where a document can be consfued to fall within a number of categories the! it is up to the court to determine the category/nature of the document and that its labeling is oot critical. Reliance is placed on the case of MUHAMMAD RAFIQUE v. MUHAMMAD NAWAZ (2001 CLC 318), where it was held as underi

".-.,.[t is the contents ofrhe document which bring such document within the definition of a promissoru rhe headins siven to 'u"r, ao"u,n"n,l.'noi ffi ,; ;:il'#.,1. ::f 28 For a document to be regaded as a promissory note. il must fulfill the defilition as set out in Section 4 of the Negotiable Instruments Act, l ggl, (.Act, 1881'). Section 4 ofAcr, 1881 is reproduce herein below:_

Y- "4. ...promissory note... A ..promissoD nore.. is an wriring.(nor being a bank_nore or :1r_T,T:r,in a currL,ncy nore) cont:trnrng an uncondirional undenaking. ,igr"d by lh. ;;;.,;,j pay lon demand or at a fixed o, a.i.-iruUi. 'n.,rrl" ,irn"j I ce(ain sum of money only to. or lo lhe order of. *;;i" or the bearer ofthe instrument... " ;;;r;

29, The ingredients of a promissory note, as set out in Section 4 of Act, 1g72, have been affrrmed in the cases of GOPALDAS v. RAMDEO (AIR 1957 RAJASTHAN 360 (V 44 C 138 Nov.)) and BADHAVA SINGH v. CHARAN

SINDH (AIR 1955 RAJASTHAN 85 (Vol. a2, C.N. 28)). In the latter case ir was ,/ held as under:-

"(2) The question is whether the document, with which we are is a promissory nore or nor. lt i, i, ri,i'f"ril*iLg

;T::1"0.

'Shriman Sahu Raghunandan Sharanji. Sarnbhar Lake,

ln your account Rs.4-668/t s/- are due from Malesh Chandra. I shall pay tlal amounl my ,t son by December. e"eg.

You rcst assured.

Brijraj SIaran."

f The definition of a promissory note is given Instruments Act, in these word;:

"A promissory note is an instr a bank. noie in S. 4, Negotiable

". " ;';;;;;" ;,:;""ffiH;'#'';i"*"J,ff undertaking. signed by the maker- io onry ro. or-ro d" lnstrument " ;;# ;;:,';ill;';.ilJ,:;:i;,,i:HJi,Tfil [i

therelore rhar a documenr should l1l^,1.?I* note. tl ls necessary that lhere should be be a promissory {r).an uncondjtional undenaking to pay, jl]],,:_...:T.th"ltd,k a sum ofmoney and should be cenain, tI,U ue payment should be lo or lo rhe order of a p.rson *ho is certain, or tothe bearer of the instrument, (iv) and the maker should sign it.

ll^$1 ,*. condilions are prcsent, a docurr,ent becomes a promrssory note. We have, therefore, to see whether in this document all these four conditions are present. we may mention that the Cout below has held that his ao"".", 'i"-'r"i"u promis-sory nole because it is not cenajn ro *f,orn rf,.,non.fi, be paid. The_other three conditions. namely ti (:] rhal there should be an unconditional urdenaking ro pay.

(ii)thal the amount should be an ascertained .". ;i and r;;;;y, (iiD that the document should be signed by the maker, 'a present in this case. Now all that ias to be s"* i, ;;d;;

are

the person lo whom the payment is to be mad" ;, ;.;;;;

not."

t 30. The question, therefore, adses, whether based on the requirements of Section 4 ofAct, l88l the Letter can be construed as a promissory Note.

31.It is importarf to read Exhibits 5/16 Md Sll.7 together. Exhibit 5/16 cannot be construed without reference to Exhibit 5/17. When read together, these documents show that the leamed Single Judge has rightly held that the respondent No.l has passed on his liabilities to respondent No.2. In accepting this liability, respondent No.2, pursuant ro respondent No,l,s letter dated I 25.5.1974, on,28.5.1974 issued the appellant a credit letter for the amouot of

IO

Rs 515,000/-, which was to be payable by respondent No.2 within two months from receipt thereol

32.In our view, the Letter itself was the credit letter. There was no other additional credit letter, which had to be issued. In our interpretation ofthe Letlcr read in context with Exhibit 5/17 the final word in the paragraph ought to have read as "hereof, instead of,.thereof,. This was a mircr technicality which could not in our view defeat the intention ofthe l_€tter which was lo oblige respondent No.2 to pay the appellant the sums mentioned in the Letter. Reliance is placed on Maxwell on the Interpretation of Statutes, Twelfth Edition, cn page 212, which siates as under!

principles of avoiding in-jr_rsrice and absurdirl, "91^,1"^.r_:T., any conslruclion uill. if possible. be rejecre; (unless tie Act requires it) if ir would enable a person lh. ;;1il;i by lis own acr m impair. an. obligation which he has undenaken. or ;;

profit b1 his own wrong. A man may "rh;;; nor rake adva,rrage oihis o*n yoLg. He may nol plead in his own interesl necessitv '' ,.li"r.ui.j

33.Although the above citation is said to be applicable to Statutes we see no reason why it should also not be used as an aid to iuterpletation with respect to other documents such as (in this case) the Letter. In our view it wourd cause an injustice if we do not interplet the final word ,.hereof,as as opposed to ,1hereol,, which may cause the intention of the lener f to be defeated. In our view a liabilitv which is properly payable should not be defeated by a legal technicalitv.

t/ 34 Based on our interpretation ofthe Letter, we consider that it contains:

(i)an uncondirional undertaking to pay;

(ii)a sum ot money which is certain;

(iii)a payment that is to be made to a person;

(iv)a srgnature on behalf of Respondent No 2 .

35, As such the Letter meets all the requirements ofa proNissory note. The position, therefore, is that the Letter is a promissory note. lt is conect that the promissory note has not been stamped, however, this will not exclude it from .1} being enforceable. Reliance is placed on the case of FARID AKHTAR HADI v.

l1

MUHAMMAD LATIF OHAZI (1993 CLC

2015), where at page 2020 it was held as follows:-

".....However, sectio[ 36 of the Stamp Act provides that document once admitred in evidence allhough the vinue of section 15 of rhe Acr .outa t, no, ua.i.rjif" nor fr. _ '- ' 'o'- *' dr) subsequent stage of lhe same suil or n "1^ri.*;;';'"::

on the eround ,ot;"ffiril;J:::eedrnss tr'ur tr'. .u*e r'ij

36.The two letters i.e. Exhibits 5/16 and SllT when read together clearly

A show that respondent No.l, on the basis ofpast and cunent business transactions ? \rith rcspondent No.2, with the consent of respondent Iiability to respondent No.2. The appellants No.2, had passed on his

were aware of this rang€ment as the letter from respondent No.l to Respondent No 2 (Exhibit 5/17) was copied to them and agreed to it as pursuant to Exhibit 5/17 the Letter by.espondent No.2 was sent to them (and was thereafter relied upon by them as can be seen by them sending a legal notice for payment to lespondent No.2). According to the appellatt, respondenl No 2 even iqitially accepted his obligation by asking for time to make payment

37.This conespondence (Exhibits 5/16 an<l 5/17) convened respondent No2 into the principal debtor, who was liabre to the appellant under a promissory note.

-t :S. In our vieq respondent No.2 had full knowledge ard was well aware of his obligation to pay the appellant by virtue of the Letter but has delibemtely rf- tried to wiggre our from his obligation to make payment on technical $ounds,

39, As mentioned earlier, technicalities should not be used in order to circumvent the true intention of the agleement between the parties or as an excuse to avoid genuine liability properly and willingly incuned..

40, In this legard, we rely on the cases of RAHIM BAKHSH v,

ALLAH

JIWAYA (1992 CLC 2433) and 1TNITED BANK LTD. v. PAKTSTAN .d INDUSTNAL CREDTT TNVESTMENT CORPN. LTD. (2IO2CLD lTsl). In

thq latter, case, it was held by the Hon,ble Supreme Court on the point of technicalities as underi.

".....- Ihe guaranlor in lhis case particulaJl) the banl cannot avoid irs liabiliry- on all lhese rechnic;lilies. Rei.erence l" Jammu and Kashir. Smre erop"nl ,;;;;;Ji, TT:.1:-M-uC"l.

v. Khuda yar and anorher r pLD t975 in eiti.-r- SC 678) *1".," il.

Judges of this Coun slared rhat mere rnsurmountable hurdle should not f

"#lj rechnl.urirl", ,nl"i" oiErinl U. rff"*"a," a"l""rii.

lust,ce. ""ar.?

4r' The contention of rcspondent No.2 that the guamntee had been ftustrated \ and his reliance on Section 135 ofAct, lg72 is, therefore, no longer relevant as we have found the Letter not to be a guarantee but a prcmissory note. In ary event, with regard to the alleged new alraflgement that had been put in place by the appellant, there is no evidence on record to prove the existence ofany such arrangement. The respondent No.2 may be conect irl asserting that this was a business arrangement between the tivo parties. Neverthelcss. if a party issues a promissory note to another party then he is boturd by such obrigations contained therein

42, The fact that a document, like the Letter, was unoiear in its labeli[g and its legal effect of passing on liability from respondent No.l to respondent No.2 was not fidly appreciated by the appelant at the time should not deba! the appellant liom seeking to rccover money * rightrully owed to him.

43, Whether you call the Letter a guaraltee, a promissory note, an indemnity

?_ or by any other nomenclature its intention, as evidenced by the correspondence (and with the consent of respondent No,2), was to crcate an obligation on rcspondent No.2 to rnake payment to the appellant. In our view, based on the facts and circumstances of this palticular casc, it would nol meet the ends of justice to allow the rcspondent No.2 to w ggle out ofhis cbligation to pay the appellant under the Letter simply because the appellant bona fide, based on an unclearly labeled and worded lefter but which intention was clear at tbe time, v sued him as the guarantor as opposed to the judgment debtor. In this rcgard we

plac, reliance on the cas€ of RAHIM BAKHSH (supra), wherein it was held as

under:-

".-.,..\}ritten doc-uments which appear to ha\c been executed wllnout ot Iiaud and compulsion are entilled preal .ttnge respecl. rn order lo confer securily on human to dealings. lf oi'the mere aliegatrons of persons inreresled in destroying a rhe rransacrion is desrro5ed. luirt oi p.ofiJ llT::-:li.:.

sanctrly ot \,!ri[en agreemenrs uill be i,irr,i shaten. and rhere will be no assurance lo the parties lo the agreement rhat il will sunive Daseless aflacks and uill remain effectire. lt will be t)rann) to the.people if they are made to live ir a state of affairs, ;de;

wfiich humaa dealings are deprived ,,f *,:"riO'li survlval,solemn

44.Accodingly, bas€d on the facrs and circumstances relaring to this appeal.

we set aside the findings ofthe leamed Single Judge in the Impugned Judgment

that respondent No.2 canrlot be held legally liable under Exi,iLit 5/i6 and hold

that Exhibit 5/16 was a promissory Note and can be relied upon by the appellant

against the respondent No 2.

45.As such, we allow this High Cout Appeal No.l50/1989 for the foregoing reasons Euld decree the suit against the respondents Nos.i arld 2, jointly and severally, with interest from 09.g.1924 till realization. howevcr, with no order as

to costs

-* Karachi, Dated: .05.2009

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