important point
It is within the discretion of the court to put conditions while granting leave to defend.

judgment

Tarun Chatterjee, J. —

1.Leave granted.

2.This appeal is directed against the order dated 13th of December, 2005 passed by a Division Bench of the High Court of Judicature at Bombay in Appeal No. 1128 of 2005 whereby the Division Bench had allowed the appeal of the respondent thereby setting aside the order passed by a learned Single Judge of the same High Court granting conditional leave to defend, to the respondent on deposit of a sum of Rs. 15 lacs.

3.The facts giving rise to the filing of this appeal may be briefly stated as follows.

4.The appellant company is engaged in the business of providing service in setting up of Networks and other value added services in the field of information and technology. The respondent company is engaged in the business of providing Courier services. The respondent hired the services of the appellant as the service provider for the connection of its Networks across India, which included Internet Access and Virtual Private Network (VPN). It is the case of the appellant that the respondent committed defaults in making payments in respect of the services provided by the appellant to the respondent. In view of the continued failure of the respondent to clear the outstanding dues in respect of invoices, the appellant filed a summary suit, being SS No. 1576 of 2004, under O. 37 R.2 of the Code of Civil Procedure (in short ‘the CPC’) against the respondent seeking recovery of a sum of Rs. 25,73,793/- along with 18 % interest p.a. in the High Court of Judicature at Bombay. The appellant, thereafter, filed the summons for judgment, being SJ No. 652 of 2004, in the afore said suit claiming Rs. 25,73,793/- and further interest at 18 % on the principle amount Rs. 23,18,797/- till payment. The respondent filed its reply to the summary suit and the summons for judgment seeking unconditional leave to defend the suit. It was the case of the respondent that there was deficiency in service provided by the appellant and that the appellants suit was based on accounts and not on invoices. The learned Single Judge, as noted herein earlier, disposed of the application for leave to defend the suit filed by the appellant holding that the respondent shall be entitled to defend the suit on condition of deposit of Rs. 15 Lacs. The learned Single Judge, therefore, granted leave to defend the suit to the respondent on the aforesaid condition. It is an admitted position that the respondent had deposited the sum of Rs. 15 Lacs in the court within the time specified in the aforesaid order. Feeling aggrieved, the respondent preferred an appeal being Appeal No. 1128 of 2005 which, as noted herein earlier, was allowed by the Division Bench of the High Court of Judicature at Bombay holding that the respondent was entitled to defend the suit without any condition. It is this order of the Division Bench, which is challenged before us by way of a special leave petition in respect of which leave has already been granted.

5.The question that needs to be decided in this appeal is whether, in view of the pleadings in the suit as well as the application filed by the respondent for leave to defend the suit, it was entitled to an unconditional leave to defend the suit as was directed by the Division Bench of the High Court of Bombay.

6.We have heard the learned counsel for the parties and examined the orders passed by the Division Bench and the learned Single Judge of the High Court of Bombay, the application for grant of unconditional leave, the pleadings in the suit and the other materials on record. Before we decide the question posed before us, it would be appropriate to take into consideration Order 37 Rule 3 Sub-rule (5) of the CPC, which provides for grant of leave to a defendant to defend a suit either unconditionally or upon such terms as may appear to the Court or Judge to be just. A bare reading of Sub-rule (5) of Rule 3 of Order 37 would clearly indicate that leave to defend may be granted to a defendant unconditionall