1. The petitioner is a business concern, engaged in wholesale business as general merchants at Solina, Srinagar. The defendants run a retail shop under the name and style of M/s S. Sofi, Store, Kokerbazar, Srinagar. The petitioner com menced a suit under order XXXVII CPC against the respondents for recovery of an amount of Rs. 2,20,000/- from the respondents. The petitioner's case was that he has business relationship with respondents, has been supplying goods to the respondents on credit and that the amount paid by the respondents from time to time is duly credited to their account, in the Ledger maintained by the petitioner and the amount due/recoverable from the respondents worked out after regular intervals. It was further pleaded that the respondents on account of payments due issued Cheques in favour of the petitioner; that the cheques bounced and the Bank expressed inability to make payment because of insufficient funds, constraining the petitioner to file the suit under Order XXXVIICPC. 2. The respondents entered appearance and made an application on 14th December, 2009 seeking leave to defend the suit. The stand taken was that the cheque amount was paid in cash by the respondents, though the petitioner did not return the cheques. The respondents insisted that nothing was outstanding against them as regards the transaction in question. On 8th June 2011, the respondents filed an application seeking leave to place on file cheques previously issued by respon dents in favour of the petitioner but later returned after the cash payment was made by the respondents to the petitioner. 3. The application for grant of leave to defend the suit was opposed by petitioner on the ground that the defence set up was without any substance and no payment was made by the respondents. The petitioner insisted that if any payment were made, same would have been reflected in the Ledger of the business concern and respondents would not allow the petitioner to retain the cheques after the payment was made. 4. Learned Trial Judge, after going through the applications and objections found a case made out by the respondents for grant of leave to defend the suit and accordingly on 20th October, 2011, passed order, impugned in the present petition, granting leave to respondents to defend the suit. 5.
4. Learned Trial Judge, after going through the applications and objections found a case made out by the respondents for grant of leave to defend the suit and accordingly on 20th October, 2011, passed order, impugned in the present petition, granting leave to respondents to defend the suit. 5. The petitioner questions the order dated 20th October, 2011, whereby leave to defend as been granted, on the grounds that the respondents were not able to make out a case for grant of leave and that the defence set up on the face of it, was devoid of any substance and fictitious in character. It is pointed out that Order XXXVII CPC would be rendered ineffective in case leave to defend is granted on the ground projected by the defendant that the amount claimed in the suit stands paid without producing any written receipt to evidence such payment. 6. Heard and considered. 7. Learned counsel for petitioner to reinforce his case places reliance on M/s Aganall Traders Ltd. v. Shyam Ahuja, AIR 1999 Delhi 369 and M/s. V.K. Enter prises v. M/s Shiva Steels, AIR 2010 SC 2885 . Learned Trial Judge while allowing the application, catalogued the cases in which leave is to be granted to the defen dant, to defend the suit. It is rightly pointed out that the defence sought to be set up by the defendant, may not be good defence, as also emerges from plain reading of Article XXXVII Rule 3. In terms of Proviso to Order XXXVII Rule 5 leave to defend the suit is not to 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. 8. In the present case the claim set up by the respondents is to be examined in the background of the business relations between the parties. Perusal of electroni cally generated copy of the Ledger, on which reliance is placed by learned counsel for petitioner, would show that during last few years the respondents have been regularly making cash payments to the petitioner which are duly reflected in the Ledger.
Perusal of electroni cally generated copy of the Ledger, on which reliance is placed by learned counsel for petitioner, would show that during last few years the respondents have been regularly making cash payments to the petitioner which are duly reflected in the Ledger. Had it been a case where one time loan was extended by a person and the defendant in opposition to the suit under Order XXXVII CPC contended that the payment had been made before or after the cheque was drawn, the plaintiff could ordinarily be heard saying that no payment was at all made as it was not evidenced by any receipt and that the defence is frivolous and vexatious. The facts of present case are distinguishable from such a case. In the present case, the parties have business relationship stretching over a number of years and the respondents insist that they as per practice paid the cheque amount to the petitioner. In case such defence may not succeed at the end of day but cannot be labeled frivolous and vexatious. We need to be reminded that Court while dealing with an application for grant of leave to defend a Suit under Order XXXVII CPC is not to weigh and assess the defence sought to be set up, go to the preponderance of probabilities to find out whether it is a good or convincing defence but to opine whether the defence is or is not frivolous and vexatious. Such a conclusion is further strengthened by the application dated 08.06.2012, whereby the respondents have sought leave to place on file the cheques previously drawn by the respondents in favour of the petitioner but not presented by the petitioner to the Bank after the respondents made cash payment and cheques were returned by the petitioner. The case is also to be appreciated having regard to the fact that admittedly the respondents after the accounts were periodically settled, as a matter of practice used to issue post dated cheques to the petitioner. In the said background the argument that the claim set up by the respondents that the cash payment was made before the date shown in the cheque does not sound convincing and does not in any manner change the complexion of the case.
In the said background the argument that the claim set up by the respondents that the cash payment was made before the date shown in the cheque does not sound convincing and does not in any manner change the complexion of the case. The factual matrix of the case law relied upon by the petitioner is markedly different from the facts of the present case and does not extend support to the petitioners case. So viewed, I do not find any merit in the petition and the petition is accordingly dismissed. Record be returned back.