JUDGMENT Ajit Prakash Shah, C.J. 1. This is an appeal from an order passed by the learned single Judge on Interim Applications taken out by the defendants (appellants herein) in a summary suit for leave to defend, by which the learned single Judge granted leave to the defendants to appear and defend the suit on their depositing Rs. 1,00,00,000/-(Rupees one crore). 2. The present suit has been filed by the respondent herein under Order XXXVII of the Code of Civil Procedure on the basis of a cheque for an amount of Rs. 2,22,47,516/-, which had been issued by the defendant No. 1 i.e. appellant No. 1, of whom the defendant No. 2 i.e. appellant No. 2 was the authorised signatory being one of the Directors. The said cheque having been received by the respondent was presented for payment but the same could not be realised on account of the fact that the appellants had issued a stop payment instruction. It is an admitted position that the cheque was issued and that the stop payment instruction was also issued. On behalf of the appellants a defence was raised that the appellants have a counter claim against the respondent for virtually the same amount and a suit had been filed by the appellant No. 1 in the District Court at Ghaziabad, UP against the respondent. It was contended that since the issues in both the suits were same, apart from the fact that leave to defend should be granted to the appellants, the present suit should also be stayed in view of the provisions of Section 10 of the Code of Civil Procedure. The learned single Judge, however, noticed that the respondent herein, who was the defendant in the suit at Ghaziabad, moved an application for stay of the suit at Ghaziabad and in the reply given by the appellants herein it was stated that the suit at Ghaziabad and the present suit did not involve common issues and that the subject matter was different. The contention of the appellants was accepted by the Court at Ghaziabad and that formed the basis of the dismissal of the respondents application for stay of the suit at Ghaziabad. The learned single Judge held that the appellants cannot be allowed to raise a contrary case before this Court that the two suits are similar. The contention of the appellants was accepted by the Court at Ghaziabad and that formed the basis of the dismissal of the respondents application for stay of the suit at Ghaziabad. The learned single Judge held that the appellants cannot be allowed to raise a contrary case before this Court that the two suits are similar. The only other plea which was raised before the learned single Judge was that there was some oral understanding between the parties that the cheque, although issued, ought not to be presented by the respondent till the accounts were settled between the parties. The learned single Judge noted that the respondent has denied any such oral understanding and that in any event the purported oral understanding could not override the written correspondence between the parties. Taking into consideration the totality of the circumstances, learned single Judge permitted the appellants to defend the suit on their depositing Rupees one crore in this Court. 3. Mr. Phoolka on behalf of the respondent has raised a preliminary point that the order made by the learned single Judge is not a judgment within the meaning of Section 10 of the Delhi High Court Act, and, therefore, no appeal lies from the order. He referred to the decision of the Calcutta High Court in Hiralal Deb Gupta v. Salil Kumar Paul and Anr. AIR1973Cal320 where a Division Bench has held that the appeal against the order of the learned trial Judge granting conditional leave to defend is incompetent and not maintainable. It has been held in that decision that no appeal lies from such an order and the course left open to the aggrieved party is to prefer an appeal from the decree and in the said appeal from the decree the said ground of not granting unconditional leave, may be taken. Reference was also made to a decision of the Supreme Court in Ajay Bansal v. Anup Mehta and Ors. AIR2007SC909 concerning maintainability of an application under Article 227 against an order refusing to grant leave in a summary suit under Order XXXVII of the Code. In this case the learned Civil Judge refused to grant leave to defend and on the same day passed a final judgment and decree and application filed there against by the respondent was allowed by the High Court. In this case the learned Civil Judge refused to grant leave to defend and on the same day passed a final judgment and decree and application filed there against by the respondent was allowed by the High Court. Allowing the appeal it has been held that a decree passed in a summary suit where leave to defend the suit has been refused is almost automatic. The consequence of passing a decree cannot be avoided. The appeal lay from the decree under Section 96 of the Code. Where an appeal could be filed, ordinarily, an application under Article 227 of the Constitution of India would not be entertained. We do not think that this decision has any relevance on the issue raised before us. 4. In reply Mr. G.S. Raghav submitted that the word "judgment" in Section 10 of the Delhi High Court Act ought to be construed liberally in the light of the decision of the Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania and Anr. [1982]1SCR187 . He submitted that the order under appeal adversely affects the valuable rights of the appellants and decide an important aspect of the trial and as such would be qualified as a "judgment" and would, therefore, be appealable in terms of Section 10(1) of the said Act. He placed strong reliance on the decision of the Bombay High Court in Ramanlal Shantilal & Co. v. Chunilal Damodardas and Ors. AIR 1932 Bom 163 in which a Division Bench has held that the effect of the order made by a Chamber Judge on a summons taken out by the defendant in a summary suit for leave to defend, subject to his depositing in Court the amount of the claim, is to determine the rights between the parties since, in substance, it entitles the plaintiff to the order claimed in the plaint. That being so such an order is technically a judgment within the meaning of Clause 15 of the Letters Patent. .5. Section 10(1) of the Delhi High Court Act, 1966 provides as under: .10. Powers of Judges. .(1) Where a single Judge of the High Court of Delhi exercises ordinary original civil jurisdiction conferred by Sub-section (2) of Section 5 on that Court, an appeal shall lie from the judgment of the single Judge to a Division Court of that High Court. .(2) xxx xxx xxx xxx xxx xx xxx 6. Powers of Judges. .(1) Where a single Judge of the High Court of Delhi exercises ordinary original civil jurisdiction conferred by Sub-section (2) of Section 5 on that Court, an appeal shall lie from the judgment of the single Judge to a Division Court of that High Court. .(2) xxx xxx xxx xxx xxx xx xxx 6. What would be a "judgment" for the purpose of Section 10(1) of the Act has been subject matter of judicial scrutiny and interpretation in a number of decisions. The interpretation of Section 10(1) came up for consideration before a Full Bench of this Court in University of Delhi v. Hafiz Mohd. Said AIR1972Delhi102 . While considering the purport and scope of the expression "judgment", the Full Bench held that only appeals from those orders enumerated under Order 43 Rule 1 of the Code could qualify as "judgment". In other words, apart from the orders which have the force of the decree, appeals will lie only against those orders passed by the learned single Judge which are mentioned in Section 104 read with Order 43 Rule 1 of the Code and no appeal will lie against other orders which are outside these two provisions. In Jugal Kishore Paliwal v. S. Sat Jit Singh and Anr. (1984)1SCC358 , the Supreme Court held that the University of Delhis case had cased to be good law in view of the Supreme Court decision in Shah Babulal Khimjis case: Thus, in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment. 7. This takes us to the discussion of the decision of the Supreme Court in Shah Babulal Khimjis case. In Shah Babulal Khimjis case the term "judgment" as used in Letters Patent of the Bombay High Court came up for examination. The decision has settled by and large the controversies raging for about a century on the connotation of the term "judgment". In Shah Babulal Khimjis case the term "judgment" as used in Letters Patent of the Bombay High Court came up for examination. The decision has settled by and large the controversies raging for about a century on the connotation of the term "judgment". It will be useful to examine the law laid down and the tests and principles enunciated therein in detail. 8. In Shah Babulal Khimji the Court considered the tests laid down by Sir Arnold While C.J. (of Madras High Court) and Sir Couch C.J. (of Calcutta High Court) as modified by later decision of Calcutta High Court itself and observed that the view taken by Sir Couch C.J. makes a very strict and narrow interpretation of the word "judgment" and became subject matter of similar criticism by several Judges of that very High Court thereafter. The tests laid down by Sir Arnold White C.J. were then analysed vide para 91 as laying down the following tests to determine what would be a "judgment": 1) It is not the form of adjudication which is to be seen but its actual effect on the suit or proceeding; .(2) If, irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment; .(3) Similarly, the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment; (4) Any order in an independent proceeding which is ancillary to the suit (not being a step towards judgment) but is designed to render the judgment effective can also be termed as judgment within the meaning of the Letters Patent. So far as this test is concerned, the learned Chief Justice had in mind orders passed by the trial Judge granting or refusing ad interim injunction or appointing or refusing to appoint a receiver. .(5) An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings. .(6) An adjudication based on a refusal to exercise discretion the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would certainly amount to a judgment within the meaning of the Letters Patent. 9. .(6) An adjudication based on a refusal to exercise discretion the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would certainly amount to a judgment within the meaning of the Letters Patent. 9. Vide para 93, the Court observed on the tests laid down by Sir White C.J. as under: We are inclined to agree generally with these tests though we feel that some of the tests laid down are far too wide and may not be quite correct. The correct test seems to lie somewhere in between the tests laid down by the aforesaid jurists. 10. The Court then proceeded to note that the concept of "judgment" used in Clause 15 of the Letters Patent is much broader than the concept of "judgment" as defined in the Code of Civil Procedure: The concept of a judgment as defined by the Code of Civil Procedure seems to be rater narrow and the limitations engrafted by Sub-section (2) of Section 2 cannot be physically imported into the definition of the word judgment as used in Clause 15 of the Letters Patent because the Letters Patent has advisedly not used the term order or decree anywhere. The intention, therefore, of the givers of the Letters Patent was that the word judgment should receive a much wider and more liberal interpretation than the word judgment used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a Trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. It seems to us that the word judgment has undoubtedly a concept of finality in a broader and not a narrower sense. 11. The Court held that a judgment can be of three kinds: .(1) A final judgment – A judgment which decides all the questions or issues in controversy so far as the Trial Judge is concerned and leaves nothing else to be decided. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the Trial Judge indisputably and unquestionably is a judgment within the meaning of the Letters Patent and even amounts to a decree so that an appeal would lie from such a judgment to a Division Bench. .(2) A preliminary judgment. – This kind of a judgment may take two forms: (a) where the Trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Here also, as the suit is finally decided one way or the other, the order passed by the Trial Judge would be a judgment finally deciding the cause so far as the Trial Judge is concerned and therefore appealable to the Larger Bench. (b) Another shape which a preliminary judgment may take is that where the Trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to maintainability of the suit, e.g., bar of jurisdiction, res judicata, a manifest defect in the suit, absence of notice under Section 80 of the Code and the like, and these objections are decided by the Trial Judge against the defendant, the suit is not terminated but continues and has to be tried on merits but the order of the Trial Judge rejecting the objections doubtless adversely affects a valuable right of the defendant who, if his objections are valid, is entitled to get the suit dismissed on preliminary grounds. Thus, such an order even though it keeps the suit alive, undoubtedly decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a larger Bench. 3. Intermediary or interlocutory judgment. – Most of the interlocutory orders which contain the quality of finality are clearly specified in Clauses (a) to (w) of Order 43 Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. 3. Intermediary or interlocutory judgment. – Most of the interlocutory orders which contain the quality of finality are clearly specified in Clauses (a) to (w) of Order 43 Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders which are not covered by Orders 43 Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. For instance, where the Trial Judge in a suit under Order 37 of the Code of Civil Procedure refuses the defendant leave to defend the suit, the order directly affects the defendant because he loses a valuable right to defend the suit and his remedy is confined only to contest the plaintiffs case on his own evidence without being given a chance to rebut that evidence. As such an order vitally affects a valuable right of the defendant it will undoubtedly be treated as a judgment within the meaning of the Letters Patent so as to be appealable to a larger Bench. Take the converse case in a similar suit where the Trial Judge allows the defendant to defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defense is false and succeed in the suit. Thus, such an order passed by the Trial Judge would not amount to a judgment within the meaning of Clause 15 of the Letters Patent but will be purely an interlocutory order. Thus, such an order passed by the Trial Judge would not amount to a judgment within the meaning of Clause 15 of the Letters Patent but will be purely an interlocutory order. Similarly, suppose the Trial Judge passes an order setting aside an ex parte decree against the defendant, which is not appealable under any of the Clauses of Order 43 Rule 1 though an order rejecting an application to set aside the decree passed ex parte falls within Order 43 Rule 1, Clause (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. The fact, however, remains that the order setting aside the ex parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of the decree passed in his favor. In these circumstances, therefore, the order passed by the Trial Judge setting aside the ex parte decree vitally affects the valuable rights of the plaintiff and hence amounts to an interlocutory judgment and is, therefore, appealable to a larger Bench. The Court further observed that: 114. In the course of the trial, the Trial Judge may pass a number of orders whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to one party or the other, e.g., an order refusing an adjournment, an order refusing to summon an additional witness or documents, an order refusing to condone delay in filing documents, after the first date of hearing an order of costs to one of the parties for its default or an order exercising discretion in respect of a procedural matter against one party of the other. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the order passed against the party concerned in the appeal against the final judgment passed by the Trial Judge. And finally the Court concluded that: 115. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the order passed against the party concerned in the appeal against the final judgment passed by the Trial Judge. And finally the Court concluded that: 115. Thus, in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the Trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment. 12. Vide para 119 the Court observed that apart from the tests laid down by Sir White, C.J., the following considerations must prevail with the Court: (1) That the Trial Judge being a senior Court with vast experience of various branches of law occupying a very high status should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice. Thus, any discretion exercised or routine orders passed by the Trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice to one party or the other cannot be treated as a judgment otherwise the Appellate Court (Division Bench) will be flooded with appeals from all kinds of orders passed by the Trial Judge. The Courts must give sufficient allowance to the Trial Judge and raise a presumption that any discretionary order which he passes must be presumed to be correct unless it is ex facie illegally erroneous or causes grave and substantial injustice. .(2) That the interlocutory order in order to be a judgment must contain the traits and trappings of finality either when the order decides the questions in controversy in an ancillary proceedings or in the suit itself or in a part of the proceedings. .(3) The tests laid down by Sir White, C.J. as also by Sir Couch, C.J. as modified by later decisions of the Calcutta High Court itself which have been dealt with by us elaborately should be borne in mind. 120. .(3) The tests laid down by Sir White, C.J. as also by Sir Couch, C.J. as modified by later decisions of the Calcutta High Court itself which have been dealt with by us elaborately should be borne in mind. 120. Thus, these are some of the principles which might guide a Division Bench in deciding whether an order passed by the Trial Judge amounts to a judgment within the meaning of the Letters Patent. .13. The Court then illustrated the above propositions by specifically giving illustrations of interlocutory orders (vide para 120) which may be treated as "judgments" and an order refusing leave to defend the suit in an action under Order 37 of the Code is included therein. Finally, all the illustrations given are followed by a note of caution i.e.: .It is not possible to give such an exhaustive list as may cover all possible cases. Law with its dynamism, pragmatism and vastness is such a large ocean that it is well-nigh impossible for us to envisage or provide for every possible contingency or situation so as to evolve a device or frame an exhaustive formula or strategy to confine and incarcerate the same in a strait-jacket. .14. In Central Mine Planning and Design Institute Ltd. v. Union of India and Anr. (2001)ILLJ1069SC , following the earlier decision in Shah Babulal Khimji (supra), the Supreme Court concluded that: From the above discussion, it follows that to determine the question whether an interlocutory order passed by one Judge of a High Court falls within the meaning of judgment for purposes of Letters Patent the test is: Whether the order is a final determination affecting vital and valuable rights and obligations of the parties concerned. This has to be ascertained on the facts of each case. 15. Applying the tests laid down in Shah Babulal Khimjis case we have no doubt in our minds that in this case the order made by the learned single Judge is a "judgment" within the meaning of Section 10. This is a summary suit, and the procedure laid down in Order XXXVII Rule 2 of the Code, would apply to such a suit. This is a summary suit, and the procedure laid down in Order XXXVII Rule 2 of the Code, would apply to such a suit. The effect of Sub-rule (2) of Rule 2 of Order XXXVII, is that if the defendant is refused leave, then he cannot appear and defend the suit, and he will be deemed to have admitted the allegations contained in the plaint, and the plaintiff would be entitled to a decree as a matter of course. The result, therefore, of a refusal of an application for leave to defend will deprive the defendant of the right to defend the suit, and as far as the defendant is concerned the order practically determines the whole cause. The order refusing leave is held to be appealable in Shah Babulal Khimjis case. If this is the true effect of an order made refusing leave, then it is obvious that a conditional order would stand on the same footing. In case the defendant is not able to comply with the condition, the result is that the plaint is taken to be admitted and the plaintiff is entitled to an order on that basis. It is true that it will be open for the defendants to file an appeal against the decree that may be passed on account of the inability of the defendant to comply with the condition and in the appeal the grounds for not granting unconditional leave can also be agitated. But in the meantime the plaintiff, having got his final decree, may have levied execution, and it may be too late for all practical purposes for the defendant to challenge the interlocutory order. We have to look at the substance of this order and what the real effect of the order is, having regard to the provisions of Order XXXVII Rule 2 of the Code and in our opinion the effect of the order is to determine the rights between the parties, since in substance, it entitles the plaintiff to the order claimed in the plaint. That being so, the order granting conditional leave is clearly appealable under Section 10 of the Delhi High Court Act. .16. Coming back to the merits of the Mr. That being so, the order granting conditional leave is clearly appealable under Section 10 of the Delhi High Court Act. .16. Coming back to the merits of the Mr. G.S. Raghav contended that as laid down by the Supreme Court in Mechalec Engineers and Manufacturers v. Basic Equipment Corporation [1977]1SCR1060 , the Court can impose a condition of deposit only if the defendant has no defence or the defence set-up is illusory or sham or practically moonshine. He submitted that when the learned single Judge has not recorded any finding that the defence taken by the defendants was sham or moonshine, there was no occasion for imposing a condition for grant of leave to defend. We find no merit in the submission of the learned Counsel. On going through the entire records we find that the defendants are unable to raise any plausible defence in the suit. In considering the totality of the circumstances the learned single Judge cannot be said to be wrong in imposing condition of deposit of Rupees one crore. In a recent case of Anil Arora and Anr. v. Anand Kumar FAO (OS) No. 333-334/2005 disposed of on 20th May, 2008 this Court following the decision of the Supreme Court in Milkhiram (India) Private Ltd and Ors. v. Chamanlal Brothers AIR1965SC1698 has held that where the Court has has doubt that the defence is not in good faith or it is improbable and wants to protect the plaintiff specially when there is no ground of hardship to the defendant in asking to deposit money in court or to furnish security therefor, the Court may in its discretion grant conditional leave. 17. Lastly, a plea was raised by Mr. G.S. Raghav that the claim for a pre-suit interest @ 27% per annum being more than statutory rate of interest prescribed under the provisions of the Negotiable Instruments Act in respect of unpaid cheque does not fall within the scope and ambit of Order XXXVII of the Code of Civil Procedure and it is nowhere explained in the plaint that the claim of pre-suit interest @ 27% per annum is covered by Order XXXVII of the Code. Mr. Phoolka, on instructions from his clients, stated that the respondent does not want to press the claim of interest @ 27% per annum and confine its claim only to 18% per annum which is permissible under the Negotiable Instruments Act. Mr. Phoolka, on instructions from his clients, stated that the respondent does not want to press the claim of interest @ 27% per annum and confine its claim only to 18% per annum which is permissible under the Negotiable Instruments Act. Therefore, the plea about the rate of interest is also liable to be rejected. 18. In the result, the appeal fails and is hereby dismissed with costs. Appeal dismissed