Judgment

BEG, J.:- The plaintiff-respondent alleged to be a registered partnership firm filed a suit on 25th April, 1974, through Smt. Pushpa Mittal, shewn as one of its partners, for the recovery of Rs. 21,265.28 as principal and Rs. 7655/-, as interest at 12% per annum, according to law and Mercantile usage, on the strength of a cheque drawn by the defendant on 12th May, 1971, on the State Bank of India, which, on presentation, was dishonoured. The plaintiff alleged that the cheque was given as price of goods supplied. The defendant-appellant firm admitted the issue of the cheque by its Managing partner, but, it denied any privity of contract with the plaintiff firm. The defendant-appellant had its own version as to the reasons and purposes for which the cheque was drawn.

2. The suit was instituted under the provisions of Order 37, Civil Procedure Code so that the defendant-appellant had to apply for leave under Order 37, Rule 2 of the Code to defend. This leave was granted unconditionally by the trial Court after a perusal of the cases of the two sides. Order 27, Rule 3, Civil Procedure Code lays down:

"(1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.

(2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit."

3. A learned Judge of the High Court of Delhi had, on a revision application under Section 115, Civil Procedure Code, interfered with the order of the Additional District Judge of Delhi granting unconditional leave, after setting out not less than seven questions on which the parties were at issue. The learned Judge had, after discussing the cases of the two sides and holding that triable issues arose for adjudication, nevertheless, concluded that the defences were not bona fide. He, therefore, ordered:

"For these reasons I would allow the revision petition and set aside the order of the trial court. Instead I would grant leave to the defendant on their paying into Court the amount of Rs. 21,265.28 together with interest at the rate of 6 per cent per annum from the date of suit till payment and costs of the suit (only court-fee amount at this stage and not the lawyers fee). The amount will be deposited within two months. There will be no order as to costs of this revision."

4. The only question which arises before us in this appeal by special leave is : Could the High Court interfere, in exercise of its powers under Section 115, Civil Procedure Code, with the discretion of the Additional District Judge, in granting unconditional leave to defend to the defendant-appellant upon grounds which even a perusal of the order of the High Court shows to be reasonable?

5. Santosh Kumar v. Bhai Mool Singh, 1958 SCR 1211 at p. 1215 was a case where a cheque, the execution of which was admitted by the defendant, had been dishonoured. The defendant had set up his defence for refusal to pay. This Court noticed the case of Jacobs v. Booths Distillery Co., (1901) 85 LT 262, where it was held that whenever a defence raises a really triable issue, leave must be given. Other cases too were noticed there to show that this leave must be given unconditionally where the defence could not be shewn to be dishonest in limine. This Court observed there (at p. 1215 of SCR):

"The learned counsel for the plaintiff-respondent relied on Gopala Rao v. Subba Rao (AIR 1936 Mad 246), Manohar Lal v. Nanhe Mal (AIR 1938 Lah 548) and Shib Karan Das v. Mohammed Sadiq (AIR 1936 Lah 584). All that we need say about them is that if the Court is of opinion that the defence is not bona fide, then it can impose conditions and is not tied down to refusing leave to defend. We agree with Varadachariar J. in the Madra