Muhammad Ishaq Vs Karim Khan

JUDGMENT SHEET

PESHAWAR HIGH COURT, PESHAWAR

(Judicial Department) RFA No.445-P/2025.

Muhammad Ishaq Vs Karim Khan

Mr. Daris Khan, Advocate, for appellant.

Present:

Mr. Daniyal Khan Chamkani, Advocate, for respondent. Date of Hearing: 11.09.2026.

JUDGMENT

MUHAMMAD NAEEM ANWAR, J. This appeal has been directed against the judgment and order dated 24.06.2025 passed in Civil Suit No. CS-31/Neem of 2021, whereby the order granting leave to the appellant to appear and defend the suit was recalled and, consequently, the suit filed by the respondent/plaintiff for recovery of Rs. 27,50,000/- was decreed against the appellant.

2.Arguments heard; record perused.

3.The record reveals that the respondent/plaintiff, Kareem Khan, instituted a suit under Order XXXVII, Rule 2, C.P.C. for recovery of Rs. 27,50,000/- against the appellant and his brother, Mohammed Imran. The claim was founded upon two cheques, bearing No. 6550187 for Rs. 25,00,000/- drawn on Habib Bank and No. 9128613 for Rs. 2,50,000/-, which, according to the plaintiff, had been delivered to him towards the outstanding liability but were dishonoured upon presentation. Defendant No.2 failed to appear despite service and was accordingly proceeded against ex parte. The appellant, however, entered appearance and applied for leave to appear and defend the suit. The application was contested by the plaintiff, but was allowed by the learned trial Court on 13.12.2022 subject to the express condition that the appellant would furnish a bank guarantee for the amount claimed by the plaintiff, together with 10% interest.

4.The subsequent proceedings are material. The matter was fixed for 10.01.2023, whereupon, at the request of learned counsel for the appellant, it was adjourned to 09.02.2023 with a direction to file written statement. On 21.02.2023, issues were framed and the parties were directed to submit their respective lists of witnesses.

Notwithstanding the specific condition imposed in the order dated 13.12.2022, the appellant admittedly failed to furnish the requisite bank guarantee. The matter nevertheless continued to be taken up on several dates, including 31.03.2023, 12.04.2023, 15.05.2023, 26.05.2023, 20.06.2023, 27.07.2023, 08.09.2023, 25.09.2023, and 09.10.2023. During these proceedings, the appellant also moved an application seeking dismissal of the suit, which was contested by the plaintiff and ultimately dismissed by the learned trial Court on 16.01.2024. Thereafter, on 26.11.2024, neither the appellant nor anyone on his behalf appeared before the learned trial Court; consequently, he was proceeded against ex parte. Upon hearing the plaintiff, the suit was decreed on 05.12.2024. The impugned order dated 24.06.2025 was subsequently passed in the circumstances noted above.

5.When confronted with the above factual position, learned counsel for the appellant submitted that the appellant had not been informed by his counsel about the condition requiring submission of the bank guarantee. It was further contended that the appellant was now ready and willing to comply with the said condition and that, in the interest of justice, the matter ought to be adjudicated on merits. The contention, however, does not merit acceptance. It is undoubtedly a settled principle that, ordinarily, a lis should be decided on its merits rather than being defeated on mere technicalities. That principle, however, cannot be invoked to nullify or dilute a specific condition consciously imposed by the Court, particularly in proceedings instituted under Order XXXVII, C.P.C., which prescribe a special summary procedure designed to provide a speedy and efficacious remedy in cases falling within its ambit. Where leave to appear and defend is granted subject to fulfillment of a specified condition, such condition is not merely procedural or directory; rather, it constitutes the very basis upon which the defendant is permitted to contest the claim. The efficacy and continuance of such conditional leave are, therefore, dependent upon compliance with the condition imposed by the Court. The Hon’ble Supreme Court in Murtaza Haseeb Textile Mills v. Sitara Chemical Industries (2004 SCMR 882) upheld the decree passed upon failure of the defendant to comply with the direction of the

trial Court, observing that sufficient opportunity had been afforded for compliance and that the conduct of the defendant in avoiding compliance was contumacious. The same principle is discernible from Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad (PLD 1995 SC 362), Abdullah v. Shaukat (2001 SCMR 60) and Muhammad Ramzan and others v. Ghulam Qadir (2011 SCMR 659). The legal position emerging from these authorities is that where leave to defend is granted conditionally, the defendant acquires no unconditional right to continue contesting the suit. The benefit of such leave remains subject to faithful compliance with the condition imposed. Failure to comply within the stipulated terms renders the conditional leave ineffective, and the defendant cannot subsequently seek to retain its benefit merely by expressing a belated willingness to satisfy the condition.

6.Examined in this legal context, the impugned order suffers from no infirmity. The appellant was expressly directed, as a condition precedent to his right to defend the suit, to furnish a bank guarantee. He neither challenged the said condition at the relevant stage nor complied with it. Instead, he proceeded to participate in the proceedings, filed a written statement, and took other steps in the suit without first fulfilling the condition upon which his leave to defend was predicated. Such participation could not extinguish or override the express condition imposed by the Court. All proceedings undertaken thereafter remained subject to the original conditional order and could not confer upon the appellant an unconditional right of defence. More importantly, the appellant was afforded repeated opportunities over a considerable period to comply with the order, yet the requisite bank guarantee was never furnished. The subsequent explanation that the appellant had not been informed by his counsel cannot, in the circumstances, displace a judicial order or revive a right which was expressly made conditional. The appellant's belated assertion of readiness to comply, after prolonged non-compliance and subsequent absence from the proceedings, is insufficient to undo the legal consequence flowing from his failure to satisfy the condition. The matter assumes greater significance because the suit was instituted under Order

XXXVII, C.P.C. The very object of the summary procedure is to secure expeditious adjudication and prevent a defendant from prolonging proceedings after having been granted leave to defend subject to a condition. Permitting a defendant to disregard such condition, participate in proceedings for an extended period, and thereafter seek restoration of an unconditional right to defend would defeat the very purpose of the procedure prescribed by Order XXXVII, C.P.C. The learned trial Court, therefore, was justified in treating the conditional leave as having lost its efficacy upon non- compliance with the condition and in proceeding in accordance with law. The subsequent absence of the appellant, resulting in his being proceeded against ex parte, further disentitled him to claim any indulgence in the absence of a legally sufficient explanation for his conduct.

7.For the foregoing reasons, the learned trial Court has correctly appreciated the factual and legal position. The appellant failed to comply with the express condition attached to the leave granted to him and cannot derive advantage from proceedings undertaken in disregard of that condition. No illegality, material irregularity or jurisdictional defect has been pointed out in the impugned judgment and order warranting interference in appellate jurisdiction. Consequently, the instant appeal, being devoid of merit, is dismissed. There shall, however, be no order as to costs. Announced.

JUDGE

(SB)Hon’ble Mr. Justice Muhammad Naeem Anwar.

Ijaz S.S.S