Nasir Ali Vs Abid Hussain

Stereo. H C J D A. 38

JUDGMENT SHEET

IN THE LAHORE HIGH COURT, LAHORE.

JUDICIAL DEPARTMENT

RFA No.3547 of 2026 Nasir Ali Versus Abid Hussain

Date of Hearing 24.09.2026 Appellant by Mr. Tanveer Hayat Kharal, Advocate. Respondent by Mr. Majid Karim Khokhar, Advocate.

JUDGMENT

Asim Hafeez, J.:- This Regular First Appeal is directed against judgment and decree dated 02.12.2025, whereby respondent’s suit was decreed, wherein he had claimed recovery on the basis of the Promissory Note. Suit was tried under Order XXXVII of the Code of Civil Procedure 1908 jurisdiction (The Code).

2.Controversy entails determination of two issues. Firstly, whether respondent had extended loan of Rs.1,200,000/- to the appellant. And secondly, whether appellant worked as an employee of the respondent for daily errands – appellant claimed that he had received advance of Rs.120,000/- from respondent and was employed against nominal wage of Rs.20,000/- per month. Aforesaid issues are covered under Issues No.1 and 2. Another significant feature of the case was that appellant had acknowledged thumb-impressions but

categorically denied consideration, which is a specie of contents of the document.

3.Learned counsel for the appellant argues that consideration, in shape of grant of loan, was not proved. Adds that promissory note was not stamped and court failed to perform obligations in terms of Order XIII of the Code, whereby no opportunity was extended to raise objections qua inadmissibility of an unstamped promissory note [Exh.P-1].

Learned counsel for respondent contends that appellant was not employed but used to take loan on various occasions. Adds that witnesses of the receipt note were produced and same proved consideration and grant of loan, incidently.

4.Heard. In terms of section 118 of the Negotiable Instruments Act 1881 (Act, 1881) a presumption has been extended that every instrument was made for consideration, unless contrary is proved. I have examined the decision impugned where court laid much emphasis on issue of execution of the document without focusing that contents thereof, which contents have had to be proved independently.

Respondent pleaded that he enjoyed ‘Itemad ka rishta’ with the appellant and loan was extended on the basis of such relationship of trust/confidence/reliance. This claim of having a relation of trust is a relevant fact and even if it is an irrelevant fact, still it becomes relevant in terms of Article 24 of the Qanun-e-Shahadat Order 1984], which renders a fact

otherwise irrelevant as relevant if there is an element of inconsistency, with a fact in issue of relevant fact, as the case may be. Appellant denied knowledge and concurrence qua the existence and contents of the instrument. Court, however, had brushed aside the allegation of procuring of thumb-impression on blank-paper, on the premise that promissory note was a printed document, hence, no question of blank-document arises. Appellant alleged that he is an illiterate and this fact was not denied. How an illiterate person could be expected to elaborate that material contents, at the thumb-marking of document, were blank – claim of absence of material details was misconstrued by the Court. Factum of extension of loan has to be proved. Respondent failed to produce any document to prove that appellant had been seeking loan routinely. No register was produced to show history of alleged loans. And while appearing as PW-1, respondent admitted that no promissory note was ever procured from appellant, at the time of granting loan on previous occasions. A creditor has to prove actual advancing loan, when contrary claim was that debtor was an employee and financially indigent – no proof was produced that appellant was engaged in cultivation of land and have the capacity to repay handsome amount. Besides, issue of execution there are other facts soliciting proof. Whether money actually passed discernable source of funds utilized for loan availability of Khata [register showing credits], and a

convincing answer that why such a huge amount would be advanced without security – a promissory note is not a security but merely an acknowledgement of loan. Mere production of attesting witness of the instrument was not enough but respondent, in the context of the facts, had to prove transaction of loan through an independent evidence. PW-2 and PW-3 are casual / coincidental witnesses, whose evidence is not enough to prove transaction of loan. It is evident from perusal of the evidence that factum of advancing of loan was not proved, hence, presumption qua consideration stood rebutted.

5.There is another important feature of the case. In terms of section 118 of the Act 1881 presumption was extended as the stamping of the instrument. Clause (f) of said section reads as follows;

“as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped”.

6.It is clear that a rebuttable presumption is provided that a lost promissory note would be presumed as stamped properly. This implies that presumption can be rebutted and if it stands rebutted then no privilege qua presumption, could be claimed. Even for the sake of argument, it is assumed that Court performed its duty under Order XIII Rule(4) of the Code and otherwise no objection was raised at the time of

exhibition of the instrument [Exh.P-1], still an unstamped promissory note stand denuded of alleged presumption and it raises benchmark requirement of substantiating alleged claim based thereupon. And respondent failed to substantiate claim on the basis of alleged promissory note and this deficiency, fatal to the credibility-cum-legality of the claim, was overlooked by the Court. Judgment is not sustainable.

7.In view of the aforesaid reasoning, instant appeal is allowed and the impugned judgment and decree dated 02.12.2025 is, hereby, set aside. And suit of the respondent stands dismissed. No order as to the costs.

Judge.

Approved for Reporting.

A.D. Mian*