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2007 DIGILAW 833 (AP)

BANSILAL AGARWAL v. HARYANA TRADING CO. ,Ltd. , RAMAVATHAR

2007-09-03

L.NARASIMHA REDDY

body2007
( 1 ) THE revision as well as the appeal arise out of O. S. No. 1325 of 2003, on the file of the learned i Senior Civil Judge, City Civil Court, hyderabad. ( 2 ) FOR the sake of convenience, the parties are referred to as arrayed in the CCCA. ( 3 ) THE sole respondent filed the suit against the appellant for recovery of a sum of Rs. 7,00,000/-, covered by a cheque dated 23. 9. 2000, invoking the procedure under order 37 of the Code of Civil Procedure (for short 'the Code' ). On receiving the summons, the appellant entered appearance and filed LA. No. 314 of 2004 with a prayer to grant leave to defend, stating that there is triable issue. The application was opposed by the respondent. Through its order dated 15. 3. 2004, the trial Court accorded permission to the petitioner to defend himself in the suit, but imposed a condition that half of the suit amount shall be deposited, on or before 15. 4. 2004. The petitioner filed CRP No. 1941 of 2004 on 13-4. 2004 against the order in the I. A. , feeling aggrieved by the condition. On the ground that the appellant failed to deposit 50% of the suit amount within the stipulated time, the trial Court decreed the suit on 15. 4. 2004. The appeal is filed against the decree passed in the suit. ( 4 ) SRI S. Ravi, the learned Counsel for the appellant, submits that once the trial court was convinced that there is a triable issue in the suit, the only course to be adopted, was to grant leave and imposition of a condition, requiring the appellant to deposit half of the suit amount, is contrary to sub-rule (5) of Rule 3 of Order 37 of the code. He places reliance upon the judgment of the Supreme Court in Mechalec engineers and Manufacturers v. M/s. Basic Equipment Corporation, AIR 1977 sc 577 and a judgment of this Court in m. V. Prasad v. Sri Durga Engineers, 2002 (3) ALD 56 = 2002 (3) ALT 435. ( 5 ) SRI Adesh Varma, learned Counsel representing Sri K. V. Simhadri, the learned counsel for the respondent, on the other hand, submits that the CRP is not maintainable, since the suit was decreed, by the time it was presented before this Court. ( 5 ) SRI Adesh Varma, learned Counsel representing Sri K. V. Simhadri, the learned counsel for the respondent, on the other hand, submits that the CRP is not maintainable, since the suit was decreed, by the time it was presented before this Court. He further contends that the trial Court, exercised its discretion and instead of denying leave, had granted it by imposing a condition, which is reasonable by any standard, particularly having regard to the admission made by the appellant about the issuance of cheque for the suit amount. ( 6 ) THE preliminary objection raised on behalf of the respondent that the revision is not maintainable needs to be dealt with, first. The respondent proceeded as though the revision was filed before this Court after the suit was decreed. The record, however does not support his contention. The revision was presented on 13. 4. 2004, whereas the suit came to be decreed on 15. 4. 2004. Therefore, the objection cannot be entertained. ( 7 ) THE suit was filed by the respondent by invoking the procedure under Order 37 of the Code. It was decreed on account of non-compliance with the condition imposed by the trial Court in its order dated 15. 3. 2004 in LA. No. 314 of 2004. Therefore, the result of the CRP as well as the appeal would depend upon the correctness or otherwise of the order passed by the trial court in the said LA. No. 314 of 2004. ( 8 ) IN the ordinary course, a suit for recovery of money has to be decided in accordance with the procedure contained in various sections and orders of the Code. A defendant in such a suit would have the right to defend himself by filing a written statement and by adducing evidence. A judgment would entail only after trial, focused on the issues, identified by the Court, on the basis of the pleadings. Order 37 of the code, however, carves out a special and summary procedure for disposal of certain categories of suits. In the suits of this nature, the right of the opposite party to defend itself is virtually taken away, unless it is granted by a trial Court on being satisfied that there exists a triable issue. Order 37 of the code, however, carves out a special and summary procedure for disposal of certain categories of suits. In the suits of this nature, the right of the opposite party to defend itself is virtually taken away, unless it is granted by a trial Court on being satisfied that there exists a triable issue. A strict time frame is fixed for disposal of the suit and any non-compliance on the part of the defendant would give rise to a decree, virtually without contest. Therefore, strict compliance is to be ensured at every stage, in suits of this category. ( 9 ) ON receiving summons in the suit filed by the respondent, the petitioner filed an application under Rule 3 Rule 37, seeking leave to defend itself. On considering the matter from various angles, the trial Court ultimately, came to the conclusion that certain controversies exist between the parties and they, in turn, lead to triable issues. Once this finding was recorded, the trial Court was under obligation to accord permission to the petitioner to defend itself. Having regard to the rigour that arises on account of the operation of the various rules of order 37, proviso to sub-rule (5) of Rule 3 thereof mandates 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. The finding recorded by the trial Court had, in fact, conferred a right upon the appellant to defend the suit. The trial Court, however, accorded permission, but imposed a condition to the effect that the appellant herein shall deposit half of the suit amount within one month. ( 10 ) A close examination of the various rules, particularly Rule 3 of Order 37 of the code, discloses that the permission that is to be accorded to a defendant to defend the suit is absolute and not conditional. The court cannot travel beyond the scope of rule 3 in the matter of according permission. There does not exist any element of distinction in the whole exercise. The supreme Court in its judgment referred to mechalec Engineers and Manufacturers v. M/s. Basic Equipment Corporation (supra), had set aside a similar condition, imposed while granting permission to defend a suit filed under Order 37 of the Code. There does not exist any element of distinction in the whole exercise. The supreme Court in its judgment referred to mechalec Engineers and Manufacturers v. M/s. Basic Equipment Corporation (supra), had set aside a similar condition, imposed while granting permission to defend a suit filed under Order 37 of the Code. ( 11 ) STRICTLY speaking, the CRP has become redundant inasmuch as the order in the LA. has merged with the decree passed in the suit. However, the specific order passed in the I. A. , gave rise to the decree on account of non-compliance. Therefore, the necessity to examine its validity exists. ( 12 ) THE learned Counsel for the respondent submits that the petitioner admitted the issuance of cheque and at least that should result in granting relief to his client, without requiring him to undergo the ordeal of full-fledged trial. In this regard, it needs to be observed that in case any clear admission as regards the whole or part of suit claim emanates from the appellant in the written statement, it can certainly give rise to a decree to that extent, as provided in Rule 6 Order 12 of the code. ( 13 ) FOR the foregoing reasons, the CRP as well as the CCCA are allowed and the decree passed in O. S. No. 1325 of 2003 is set aside. The order in I. A. No. 314 of 2004 is modified by deleting the condition as to deposit of half of the suit amount, subject to the condition that : (a) The appellant shall deliver his written statement within 2 weeks from today and the suit shall be listed before the trial Court on 24. 9. 2007. (b) In case the respondent is able to point out to the satisfaction of the trial Court that there is admission by the appellant, as to any portion of the suit claim, the trial Court shall consider the feasibility of passing a decree in terms of Order 12 Rule 6. (c) The suit shall be disposed of by the end of February 2008. There shall be no order as to costs.