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2010 DIGILAW 104 (JK)

Gh. Mohd. Akhoon v. Masood-ul-Hassan Khan

2010-03-04

GH.HASNAIN MASSODI

body2010
1. In a suit under order 37 Civil Procedure Code, the learned trial Judge vide order dated 8.9.2009 granted leave to the defendant-petitioner herein to defend the suit. Learned trial Judge after opining that "there are some triable issues between defendant and the plaintiff" proceeded to grant the leave as aforesaid subject to the condition that the defendant-petitioner herein makes a deposit of Rs.1.00 lac in the court within two months". 2. The petitioner-defendant aggrieved of the order dated 8.9.2009 to the extent of condition subject to which the leave was granted, has filed instant revision. The order impugned is assailed on the grounds that once the learned Judge was of the opinion "that there were some triable issues between the parties", the option to ask the petitioner-defendant to make a cash deposit of Rs.1.00 lac, was not available with the learned trial Judge. The petitioner-defendant tracing the background of business relationship with the respondent-plaintiff insisted that the petitioner because of lack of sufficient resources is not in a position to make the deposit and that the learned trial Judge by imposing condition, has in effect denied the leave to defend the suit. It is pleaded that it being impossible for petitioner-defendant to make deposit because of the reasons spelt out in the petition; in at the petitioner-defendant would not be in a position to fulfill conditions subject to which the leave has been granted and thus not avail the leave granted by the trial Judge. It is averred that the condition subject to which leave has been granted, is bound to result in miscarriage of justice. The requirements of cash deposit of Rs.1.00 lac before availing leave to defend the suit, is also assailed as being without jurisdiction and thus liable to be set aside. 3. Heard. Order 37 CPC prescribes summary procedure for certain classes of suits enumerated in Rule-2. The defendant in class of suits falling within the ambit of order 37 Rule-2, is not as in an ordinary suit entitled as of right to defend the suit. The defendant is required to apply for leave to defend the suit within the time prescribed under the order and the leave is to be granted only after an affidavit filed by the defendant discloses such facts as the court may deem sufficient for granting the leave to the defendant to defend the suit. The defendant is required to apply for leave to defend the suit within the time prescribed under the order and the leave is to be granted only after an affidavit filed by the defendant discloses such facts as the court may deem sufficient for granting the leave to the defendant to defend the suit. If the court is not impressed by the case set up by the defendant for grant of leave to defend the suit and no leave to defend is granted, the plaintiff is entitled to a decree. The underlying object of order 37 is to impart credibility to the financial commitments in the interest of stability of financial and business transactions and to prevent unreasonable obstructions by the defendant who has no defence. The defendant in order to persuade the court to permit him to defend the suit, has to follow procedure laid down in order 37 Rule 3 sub Rule 5. The defendant must, to succeed in an application for grant of leave to defend within 10 days from the service of summons for judgment by affidavit or otherwise, place such facts before the court as may be deemed sufficient to entitle him to defend the suit and seek leave to defend the suit. The court may there after unconditionally or upon such terms as may appear to the court to be just, grant leave to defend the suit. The leave to defend the suit is to be denied if the court is satisfied that the facts disclosed by the defendant, do not point to a substantial defense or that the defense intended to be put, is frivolous or vexatious. 4. From the closer look at order 37 Civil Procedure Code it emerges that discretion to grant leave unconditionally or subject to the conditions, is vested in the court. The conditions, if any, put by the court, nonetheless must be just. A condition that may not be possible for the defendant to fulfill, may tantamount to denial of leave to defend the suit. It is well settled law that where the court is satisfied that the defendant has disclosed a prima facie case or raised a triable issue, the leave to defend should be given unconditionally. A condition that may not be possible for the defendant to fulfill, may tantamount to denial of leave to defend the suit. It is well settled law that where the court is satisfied that the defendant has disclosed a prima facie case or raised a triable issue, the leave to defend should be given unconditionally. In Milkha Ram (India) Pvt. Ltd. v. Charnan Lal Bros., AIR 1965 SC 1698, the Supreme Court held that if there is a triable issue un conditional leave to defend must be granted and that if defense is false or frivolous, leave to defend should be refused altogether. The law was reiterated in AIR 1977 SC 577 relied upon by learned counsel for the petitioner defendant. In the aforementioned case the court while holding that triable issues were raised for adjudication, and concluded that the defense were bonafide nevertheless granted leave to defend on payment of amount into the court. The Supreme Court held that it is only in cases where defence is pertinently dishonest that an imposition of condition to deposit an amount in the court is justified, The Supreme Court reproduced with approval the principles applicable to the cases covered by order 37 Civil Procedure Code laid down in "Smt. Kiranmoyee Dassi v. Dr. J. Chatterjee (1945) 49 Cal WN 246 (at P.253) : "(a) if the defendant satisfies the Court that he has a good defence to 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 bonafide or reasonable defense although not a positively good defence the plaintiff is not entitled 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 bonafide or reasonable defense 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 he had a defence, yet, shews such a state of facts as leads to the inference that establish a defence to the plaintiffs 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 furnishing security. (d) If the defendant has to defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitle 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 give leave to the defendant on such condition, and thereby shows mercy to the defendant by enabling him to try to prove a defence." 5. In view of settled law on the subject as is evident from the above referred case law, learned trial Judge after recording satisfaction that there were triable issues, ought to have granted an unconditional leave to defend the suit. (sic)subject to which leave has been granted in the instant case, is in the Facts and circumstances of the case not just and thus not sustainable. 6. For the reasons discussed above, Civil Revision is accepted and the order impugned in the revision petition i.e. order dated 08.09.2009 passed by 2nd Add. District Judge Srinagar in case Masood ul Hassan Khan v. Gh. Mohammad Akhoon is set aside to the extent the order requires the petitioner-defendant to deposit an amount of Rs.1.00 lac before availing leave to defend the suit. District Judge Srinagar in case Masood ul Hassan Khan v. Gh. Mohammad Akhoon is set aside to the extent the order requires the petitioner-defendant to deposit an amount of Rs.1.00 lac before availing leave to defend the suit. The net result is that the defendant shall have the leave to defend the suit unconditionally. Disposed off alongwith connected CMP, it any.