PLJ 2026 Lahore 326
The respondent instituted the summary suit on the basis of cheques and the petitioners entered appearance and contested the claim by filing an application for leave to defend. During the pendency of proceedings, the petitioners voluntarily admitted their liability of Rs.1,33,00,000/- and entered into a compromise whereby they undertook to discharge the admitted amount in nine installments. In pursuance thereof, the first installment of Rs.14,77,777/- was paid on 31.03.2017, and the suit was conditionally consigned to the record room with the clear stipulation that in case of default the respondent would be entitled to seek restoration.
It is not disputed that the petitioners subsequently defaulted in making payment of the remaining installments, as a consequence whereof the suit was restored by the learned trial Court. The payment of the first installment thus formed part of a judicially recorded compromise during pendency of proceedings and was not a payment made prior to institution of the suit against the negotiable instrument in the ordinary course of business.
The distinction between part-payment made prior to institution of the suit and payment made pursuant to a compromise recorded before the Court during pendency of proceedings is significant. The former may attract the implications of Section 56 of the Negotiable Instruments Act, 1881, whereas the latter constitutes performance of a settlement acknowledging the original liability and does not alter the foundational basis of the suit.
In the present case, the petitioners not only admitted their liability before the learned trial Court but also secured the benefit of conditional consigning of the suit on the strength of their undertaking to liquidate the liability through installments. Having failed to honour their commitment, they cannot now be permitted to challenge the jurisdiction of the same Court by invoking technical objections.
It is by now well settled that a statement or undertaking given before a Court of law carries binding force and creates an estoppel against the maker thereof.
A litigant who voluntarily acknowledges liability before the Court and obtains a concession on that basis cannot subsequently be permitted to resile from the same in order to defeat the proceedings. Reference in this regard may be made to the settled principle that a party cannot approbate and reprobate simultaneously.
Furthermore, the scope of Order VII Rule 10, C.P.C. is confined to cases where the Court lacks inherent jurisdiction to entertain the plaint. The provision cannot be pressed into service where the Court otherwise possesses jurisdiction and the objection is raised merely to defeat the proceedings. In the present case, the suit was competently instituted under Order XXXVII, C.P.C. on the basis of cheques, which falls squarely within the definition of negotiable instruments. The subsequent compromise and partial payment made in pursuance thereof did not divest the learned trial Court of its jurisdiction.
Civil Revision.13854/26
Mudassar Aleem Babar Vs Rana Nisar Asim
