P. S. NARAYANA, J. ( 1 ) HEARD the learned counsel on record. Sri V. Hariharan, learned counsel representing the revision petitioners had drawn the attention of this court, the specific observation made by the learned II additional Senior Civil Judge, City Civil Court, Hyderabad, to the effect that the said court is of the view that the defence of the petitioner to some extent is genuine and bona fide and gives raise to triable issues and had pointed out that having observed so, the learned Judge had not exercised the discretion judicially by granting only conditional leave to defend the above suit by filing written statement on deposit of Rs. 2,00,000/- on or before 22. 08. 2003, in stead of granting un-conditional leave. ( 2 ) THE learned counsel also had drawn the attention of this court in paras 3 to 8 of the affidavit filed in support of the application in I. A. No. 1185 of 2003 in o. S. No. 1408 of 2003 in general and para 9 of the said affidavit in particular and submitted that when the very maintainability of the suit under order 37 of c. P. C. is raised as a ground of attack, apart from the question of limitation and several other triable issues, the learned Judge having been satisfied that such issues are triable issues, should have granted un-conditional leave, instead of granting conditional leave on deposit of an amount of Rs. 2,00,000/ -. The learned counsel had drawn the attention of this court to the relevant provisions of C. P. C. in this regard and the guidelines specified by the Apex court while exercising the discretion either to grant leave or to refuse the leave or to grant conditional leave. ( 3 ) THE learned counsel representing the respondent had taken a stand that this is just a discretionary order made by the learned Judge and specific reasons had been recorded in paragraphs 5 and 6 of the order and prima facie, the learned judge was of the opinion that the defence of limitation is illusory in the light of the peculiar facts and circumstances and consequently granted conditional leave to defend the suit in stead of granting un-conditional leave. The learned counsel also submitted that in view of the fact that the discretion was exercised judiciously, the impugned order need not be disturbed in any way by this court, while exercising the powers under Article 227 of the constitution of India. Heard the learned counsel and perused the affidavit filed in support of the application before the II Additional Senior Civil Judge, City Civil Court, hyderabad in I. A. No. 1185 of 2001 in O. S. No. 1408 of 2002, the counter filed therein and also the reasons recorded in the impugned order. ( 4 ) THE respondent herein had instituted the suit under Order 37 of the C. P. C. , read with Section 26 and order 7 Rules 1 and 2 of C. P. C. (for short as code for the purpose of convenience) for recovery of Rs. 5,91,663-93 ps. In the plaint, the respondent/plaintiff had pleaded as hereunder:"the plaintiff is a Registered Company, registered under Mysore Companies Act and an existing company. Plaintiff is also dealer in A. P. under APGST/cst Acts and a manufacturer and Supplier in Electric motors and a leader in the Trade with a Branch in A. P. at the address detailed in the cause title. The plaintiff submits that the defendant has been placing purchase orders in writing from time to time on the plaintiff for the supply of Kirloskar Motors of various capacities and the plaintiff has been supplying the motors, raising sale invoices/delivery chalans and forwarding the Lorry receipts/ obtaining receipt of acknowledgement of the motors supplied. The plaintiff also has been maintaining a running account for Defendant in the books of the plaintiff and being conciled periodically. The Plaintiff submits that the plaintiff books of accounts have shown a debit balance of Rs. 7. 64,337. 93 against the Defendant as on 25. 08. 1999. The Defendant and his representative met the plaintiff on 25. 08. 1999 to sort out the problems and arrived at written understanding wherein the Defendant and their representative acknowledged provisionally an outstanding balance of Rs. 6. 03 lakhs and agreed to meet again on 26. 08. 1999 to draw up the final mutually agreeable statement of account and to clear the balance. As agreed by the Defendant, his representative met the Plaintiff again on 26. 08. 1999 and reconciled the outstanding balance. It was mutually agreed to present a cheque for Rs. 1. 6. 03 lakhs and agreed to meet again on 26. 08. 1999 to draw up the final mutually agreeable statement of account and to clear the balance. As agreed by the Defendant, his representative met the Plaintiff again on 26. 08. 1999 and reconciled the outstanding balance. It was mutually agreed to present a cheque for Rs. 1. 00 lakh on 31. 08. 1999 which the defendant agreed to honour and the cheques for the balance of Rs. 6. lakhs, cheques given were to be presented by the plaintiff against the outstanding balance. Certified Copy of the Certificate of commencement of business, the Certified copy of the Board Resolutions dated 20. 10. 2k, dt. 14. 11-2k, power of attorney dt. 28. 11. 2000, memorandum of understanding dt. 25th and 26th August 1999, reminder letters dt. 25th July, 99/4-10-2000, Certified true copy of the statement of Account supported by invoices, purchase orders and other relevant documents are filed as Documents Nos. 1 to 8 and 21 to 36. 3-B) The Plaintiff submits that the Defendant having duly acknowledged the outstanding balance and one such reminder being 25th July 2000 which was acknowledged by Defendant No. 2 himself failed to respond to several reminders. The Plaintiff finally issued intimation on 4th October 2000 informing the defendant No. 1 and 2 of the fact of presenting the said cheques for a total sum of Rs. 4. lakhs on 9th October 2000, by registered post acknowledgement due which were returned undelivered with a postal endorsement (addressee not claimed ). The office copy of the letter reminder Dt. 25. 7. 2000 and intimation letter dt. 04. 10. 2000 and unclaimed postal cover are filed herewith as Document No. 7 and 8. 3-C) The Plaintiff presented five cheques mentioned below for realization through their banker "bank of India at Khairatabad. ( 5 ) THE copies of five cheques together with Bankers return Memorandum are filed herewith as Document Nos. 9 to14. D. The Plaintiff submits that these five cheques were dishonoured by the drawer s drawer". The plaintiff also got issued a notice, dated 17. 10. 2000 to the Defendant bringing to the notice the fact of dishonoured cheques and demanded payment in lieu of dishonoured cheques. The Defendant having managed with the postal authority for endorsements " Door locked from 18. 10. 2000 to 25. 10. The plaintiff also got issued a notice, dated 17. 10. 2000 to the Defendant bringing to the notice the fact of dishonoured cheques and demanded payment in lieu of dishonoured cheques. The Defendant having managed with the postal authority for endorsements " Door locked from 18. 10. 2000 to 25. 10. 2000" and Defendant No. 2 "absent for 7 days from 18th October 2000 to 25th october 2000" on the postal covers failed to respond to date. Copy of notice and returned covers are filed as document No: 15 to 17. No doubt, certain other averments had also been pleaded in the plaint. The revision petitioners are defendants in the suit. They filed an application in I. A. No. 1185 of 2002 under Order 37 Rule 3 (5) of the Code praying for grant of un-conditional leave to defend the said suit. No doubt, placing of purchasing orders under certain transactions were admitted. But it was specifically stated that all the transactions of supplies and payments are only bill to bill and the plea taken by the respondent/plaintiff in relation to the maintenance of running account is only to save the limitation. Further, a specific stand was taken that on 25. 8. 1999, the then Manager of respondent and plaintiff company G. Sanjai came to the first revision petitioner and informed that he had been removed from service and also informed that unless he obtains cheques for the outstanding amounts, he would be put into serious loss and on such request, he issued un-dated cheques for Rs. 6,00,000/- with an understanding that presentation of the cheques after confirmation of amount and intimation of date of encashment. As can be seen from para 2 of the affidavit filed in support of the said application, several details had been narrated and specific stand was taken that the revision petitioner had never acknowledged the outstanding balance. After narrating all the details in paras 4 to 8, a specific stand was taken that though there is no legal enforceable debt due to respondent/plaintiff as against the revision petitioners/defendants, two criminal cases were also filed under section 138 of the Negotiable Instruments Act, 1882. Further, at para 9 of the affidavit, a specific stand was taken that the suit itself is not maintainable under Order 37 of the Code. Further, at para 9 of the affidavit, a specific stand was taken that the suit itself is not maintainable under Order 37 of the Code. In fact, it was averred at para 9 of the affidavit: "it is pertinent to mention here that the supplies made by the plaintiff and the payments made by the Defendants are bill to bill and there is no running account maintained by the Defendants. The Plaintiff Company to overcome with the limitation, is alleging as if, the Defendants were maintaining running account with the Plaintiff. As such, the claim of the Plaintiff Company is hopelessly barred by limitation. Besides the suit claim is not only barred by limitation but the same is also liable to be dismissed for misjoinder of parties, as the plaintiff with malafide intentions filed the suit against Defendant No. 2 firm by taking some remuneration, as such, he has no civil liability in respect of the business transactions of the Defendant No. 1 firm. It is submitted that the provisions of sub rule 1 of order XXXVII applies to the following classes of suits:a) upon bills of exchange b) hundis and c) promissory notes. As such, the present suit does not fall under any of the classes mentioned above, as such, on these ground also the present suit is not maintainable under order XXXVII. Besides, there are several issues involved in the suit claim and unless they are tried by conducting thorough enquiry by producing oral and documentary evidence, it would cause grave and irreparable loss and hardship. " a counter in detail had been filed denying the allegations and reiterating the same stand taken by the respondent/plaintiff as averred in the plaint. The learned Judge after hearing both the parties and relying upon the fact that the minutes of the meeting between the parties before 25. 8. 1989 is not in dispute and certain admissions and also the defence taken by the defendants on the question of limitation as illusory, arrived to the conclusion that no doubt that there are certain triable issues, but, ultimately had granted only conditional leave. The learned Judge had also observed that the acknowledgment of the liability of the petitioners/defendants and various defences of the petitioners regarding mis-joinder of parties and the supply of material with defects are the matters to be considered and to be triable issues between the parties. The learned Judge had also observed that the acknowledgment of the liability of the petitioners/defendants and various defences of the petitioners regarding mis-joinder of parties and the supply of material with defects are the matters to be considered and to be triable issues between the parties. As already referred to supra, in view of the peculiar facts of the case, as reflected from the averments made in the plaint, a specific ground relating to the maintainability of the suit under Order 37 of the Code had been raised apart from the other triable issues. It is also pertinent to note that though the learned Judge was satisfied that there are certain triable issues, thought it fit to exercise the discretion in a particular way by imposing a condition of making deposit of Rs. 2,00,000/-, while granting leave to defend the suit. Order 37 Rule 2 of the Code tells about the institution of a summary suit, likewise order 37 Rule 3 of the Code deals about the procedure for the appearance of the defendant. Order 37 Rules 3 (5)specifies as hereunder: "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 ) THE language employed in the first proviso to Rule 3 of order 37 of the Code would assume some importance while deciding the present question of controversy. ( 6 ) THE language employed in the first proviso to Rule 3 of order 37 of the Code would assume some importance while deciding the present question of controversy. The first proviso specifies 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. It is also pertinent to note that the second proviso specifies 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. It is not doubt true that order 37 of the Code was amended by Act 104 of 1976. In SANTOSH KUMAR VS. BHAI MOOL SINGH1, the learned Judge of the Apex Court while dealing with the triable issues, bona fide defence and the discretion to be exercised, observed as follows:"though the court is given a discretionary by O. 37, R. 3 (2) it must be exercises long judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws. Those principles, so far as they touch the matter, are well known. Wherever the defence raises a "triable issue", leave must be given, and when that is the case it must be given unconditionally, otherwise the leave may be illusory. If the Court is of opinion that the defence is not bona fide, then it can impose conditions and it not tied down to refusing leave to defend. But it cannot reach the conclusion that the defence is not bona fide arbitrarily. It is as much bound by judicial rules and judicial procedure in reaching a conclusion of this kind as in any other matter. Where the defence is a good and valid one, conditions cannot be imposed. The power to impose conditions is only there to ensure that there be a speedy trial. If there is reason to believe that the defendant is trying to prolong the litigation and evade a speedy trial, then conditions can be imposed. Where the defence is a good and valid one, conditions cannot be imposed. The power to impose conditions is only there to ensure that there be a speedy trial. If there is reason to believe that the defendant is trying to prolong the litigation and evade a speedy trial, then conditions can be imposed. But that conclusion cannot be reached simply because the defendant does not adduce his evidence even before he is told that he may defend the action. It is always undesirable, and indeed impossible, to lay down hard and fast rules in matters that affect discretion. But it is necessary to understand the reason for a special procedure of this kind in order that the discretion may be properly exercised. Taken by and large, the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of cases where speedy decisions are desirable in the interests of trade and commerce. In general, therefore, the test is to see whether the defence raises a real issue and not a sham one, in the sense that, if the facts alleged by the defendant are established, there would be a good, or even a plausible, defence on those facts". In M/s. MECHALEC ENGINEERS and MANUFACTURERS VS. In general, therefore, the test is to see whether the defence raises a real issue and not a sham one, in the sense that, if the facts alleged by the defendant are established, there would be a good, or even a plausible, defence on those facts". In M/s. MECHALEC ENGINEERS and MANUFACTURERS VS. M/s. BASIC EQUIPMENT CORPORATION2, the Apex Court while dealing with the principles to be followed while granting leave to defend had specified as hereunder:"the following principles are to be followed while considering the question of granting leave to defend: a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the court may in its discretion impose conditions as to the time or mode of trial but not as to payment into court or furnish security. d) If the defendant has no defence or the defence set up is illusory or sham or practically moonishine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence". ( 7 ) IN a decision reported in SANNIDI KASI VISWANADHAM VS. GADE ANNAPURNAMMA3 a learned Single Judge of this Court held that even unconditional leave to defend a summary suit on a pronote cannot be refused where defence "bona fide" alleges that the pronote was concocted. In MILKHIRAM (INDIA) P. LTD. VS. CHAMANLAL BROS4 the Supreme Court held that if the judge is of the opinion that the case raises a triable issue, then leave should ordinarily be granted unconditionally. The same view was expressed by the supreme Court in SANNIDI KASI VISWANADHAM VS GADE ANNAPURNAMMA (Supra-3 ). The High Court of Bombay in a decision reported in the INDIAN RAYON and INDUSTRIES ltd. VS. M/s. SIROHYA ENTERPRISES5, while dealing with the aspect of Order 37 of the Code prior to the Amendment and subsequent thereof, held as follows:" In order to obtain unconditional leave to defend it is now not enough for the defendant to indicate defences which merely give rise to triable issues but the defendant should satisfy the Court that he has a substantial defence to raise. In other words it is now required for the defendant to show that the defence he intends to raise has substance behind it. It is true that this is not the stage for "adducing" evidence, but it is open to the defendant to show the Court what evidence he would adduce in order to satisfy the Court that he has "substantial defence" to raise. If he has documentary evidence in his hands, it is now open to him to show that documentary evidence to the Court. If he has documentary evidence in his hands, it is now open to him to show that documentary evidence to the Court. It may be pointed out that under Order 37 prior to the amendment of 1976 the defendant was requested to disclose facts to the Court upon affidavit, while now he can do this by affidavit or otherwise. Considering the two new provisions, the following principles can be spelled out in the matter of grant or refusal to leave to defend in summary suits". ( 8 ) THE High Court of Madras in a decision reported in RAMALINGAM VS. BASAVALINGAM 6 held that when an affidavit is filed in support of the application for leave to defend has set out the facts clearly and disclosing a triable issue, leave to defend could be granted and imposition of condition of furnishing security for grant of leave to defend the suit is not sustainable. It is no doubt true that the concerned trial Judge while deciding an application of this nature, is expected to exercise his discretion. But such a discretion may have to be exercised only on some judicial lines. This is a case where the learned Judge had in fact recorded that there are certain triable issues, but, however, going a step forward held that the defence of limitation is an illusory and there are certain admissions and hence, a direction to be issued is to make deposit of some amount. The normal rule is that if the court is satisfied that there is a bona fide contest and there are triable issues, ordinarily, leave would be granted unconditionally without giving further directions to make deposit of certain amounts on furnishing security or any other conditions of the like nature. ( 9 ) IN the peculiar facts and circumstances of the case, I am thoroughly satisfied that especially in the light of the elaborate reasons recorded by the learned judge and being satisfied with the affidavit filed in support of the application. Imposing a condition of deposit of Rs. 2,00,000/- while granting leave to defend, definitely cannot be sustained. n view of the same, I am of the considered opinion that the revision petitioners are bound to succeed. Accordingly, the impugned order is set aside. The revision is accordingly allowed to the extent indicated above. No costs.