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2000 DIGILAW 588 (AP)

Raghavendra Rice Mills v. Anant Kabra

2000-08-08

VAMAN RAO

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VAMAN RAO, J. ( 1 ) THIS Civil Revision Petition is directed against the order of the Fourth Senior Civil judge, City Civil Court, Hyderabad dated 29-10-1999 passed in LA. No. 1010 of 1999 in o. S. No. 1845 of 1997 under which the application of the petitioner defendant under Order 37 Rule 3 (5) C. P. C. for leave to defend the suit was dismissed. ( 2 ) THE plaintiff filed a summary suit under Order 37 C. P. C. for recovery of a sum of Rs. 1,47,325/ -. Summons for judgment were served on the defendants upon which the defendants filed the petition in question for leave to defend the suit. The case of the plaintiff is that the defendant No. 1 used to supply rice and rice bran to the plaintiffs by taking advance and in the course of these transactions they became due in a sum of rs. 60,000/- by 6-7-1993. As the petitioner-Company was irregular in payment of the amounts, the plaintiff decided to discontinue the business with the petitioner and there was mutual agreement under which the defendants agreed to repay the balance of Rs. 60,000/- treating it as hand-loan with interest at three per cent per month from 6-7-19993. The petitioner paid a sum of Rs. 16,000/- and for the balance of rs. 71,000/- a promissory note was executed agreeing to pay the amount within two months. This amount was not paid. Hence the suit. After service of summons for judgment the defendant No. 1 applied for leave to defend the suit. In the affidavit filed in support of the petition it is stated that the defendants have a strong case to win. As noted by the learned Senior Civil Judge except this there was no other averment constituting a ground for defending the suit and no other contentions were raised. It is pointed out that the execution of the pronote was not denied and the earlier transaction culminating in the execution of the pronote was also not denied. No other substantive contention was raised. The learned Judge dismissed the petition holding that no other substantive contention was raised constituting a ground for allowing the petitioner to defend the suit. This order is now being challenged in this revision petition. No other substantive contention was raised. The learned Judge dismissed the petition holding that no other substantive contention was raised constituting a ground for allowing the petitioner to defend the suit. This order is now being challenged in this revision petition. ( 3 ) THE learned Counsel for the petitioner points out that though in the affidavit the defendants may not have raised specific issues but written arguments have been filed on behalf of both sides before the court below. This fact is not disputed in the course of hearing in this Court. The contention of the learned Counsel for the petitioner is that in the written arguments various questions were raised by way of ground for defending the suit. A copy of the written arguments filed on behalf of the defendants has been filed with this petition. It would be seen that among other questions raised in the written arguments filed by the defendant No. 1 there is one question relating to insufficiency of stamp on the promissory note relied on by the plaintiff along with other questions. ( 4 ) THE learned Counsel for the respondent, however, contends that inasmuch as this question is not stated in the affidavit filed by the defendant No. 1, this defence cannot be taken note of merely on the basis of written arguments filed on his behalf. ( 5 ) ORDER XXXVII Rule 3 (5) of the Civil procedure Code, which governs the matter relating to grant of leave to defend is extracted below for ready reference:" (5 ). ( 5 ) ORDER XXXVII Rule 3 (5) of the Civil procedure Code, which governs the matter relating to grant of leave to defend is extracted below for ready reference:" (5 ). The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court or Judge to be just: provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious: provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court. " ( 6 ) IT is obvious from this provision, the disclosure of facts as may be deemed sufficient to entitle the defendant for leave to defend may be made by affidavit or otherwise for enabling the Court to grant leave to defend the suit. It is thus obvious that affidavit filed by the defendant is not the only means of disclosure of grounds. Such grounds may be brought to the notice of the Court by any other means also. In this case, the written argument must be deemed to satisfy the requirements of disclosure by means otherwise than affidavit. This is all the more so when the plea disclosed in this case is not based on any questions of fact within the knowledge of the defendant. The defence disclosed relates to some defect in the form of the document on which the plaintiff s claim is based. This is all the more so when the plea disclosed in this case is not based on any questions of fact within the knowledge of the defendant. The defence disclosed relates to some defect in the form of the document on which the plaintiff s claim is based. ( 7 ) AS held by the Supreme Court in the case of Raj Duggal vs. Ramesh Kumar Bansal, a question of law could be as much of defence for the purpose of granting leave to defend as a question of fact as is obvious from the following observations:"summary judgments under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The Court should not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency. " ( 8 ) THE question of insufficiency of stamp on a promissory note is though a technical defence, but nevertheless is a legal defence which a defendant is entitled to raise. As mentioned in the commentary on Civil procedure Code by MULLA abridged edition (12th edition, 5th reprint) based on a case from Gujarat, the triable issue raised by the defendant may be about one of consideration, execution, want of legality or want of formality of execution, want of compliance with mandatory statutory obligations etc. ( 9 ) IN view of this, it cannot be said that the defence raised on behalf of the defendants is frivolous or vexatious. It certainly raises a triable issue and the issue raised by the defendants may in fact be determinative of the suit though on a technical and formal ground. ( 10 ) IN the light of the statutory provisions concerned and in the light of the authorities mentioned above, I am constrained to hold that the refusal to grant leave to defend by the trial Court was not proper and the trial Court must be held to have failed to exercise jurisdiction vested in it. ( 11 ) IN the result, I. A. No. 1010 of 1999 in o. S. No. 1845 of 1997 on the file of the fourth senior Civil Judge, City Civil Courts, hyderabad shall be deemed to have been allowed and the leave to defend the suit is granted to the defendants. The Civil revision Petition is accordingly allowed.