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IN TH SUPREME COURT OF INDIA
S.B. Sinha and Cyriac Joseph, JJ.
Wada Arun Asbestos (P) Ltd. - Appellant
Versus
Gujarat Water Supply & Sewerage Board - Respondent
CIVIL APPEAL NO. 7314 OF 2008
(Arising out of SLP (C) No.10870 of 2006)
Decided on : December 16, 2008
B) Civil Procedure Code, Order 37, rule 6(3)(b):- Leave to defendant should ordinarily be granted to the defendant in a suit for summary trial. (Para 18)
C) Civil Procedure Code, Order 37, rule 6(3)(b):- Where the trial court in a suit for summary trial had allowed a suit after the defendant failed to comply with the condition put for allowing him to defend the suit, such an order may be appealed against. (Para 11 and 12)
D) Civil Procedure Code, Order 37, rule 6(3)(b), 96 and 105:- Where the defendant in a suit for summary trial had been denied the right to defend himself, the a revision is against the same is maintainable and in case no revision is filed, it can also be appealed against. (Para 17 and 18)
Certainly. Here are the key points derived from the provided legal document:
The appeal concerns a judgment and order passed by a High Court that set aside a decree under Order 37 Rule 3(6)(b) of the Civil Procedure Code and remitted the matter back to the trial court, considering the amount already deposited as if it were deposited under the lease (!) .
The core facts involve the supply of AC pressure pipes to a respondent, with a sum due and interest claimed at a high rate due to the small scale industrial status of the appellant (!) .
The appellant sought a decree based on non-compliance by the respondent to deposit a conditionally granted amount, leading to a decree in favor of the appellant (!) .
The respondent filed an appeal, and the High Court, after exploring settlement possibilities, set aside the decree and remitted the case to the trial court, interpreting the deposited amount as compliance with the conditional leave order (!) (!) .
The appellant’s counsel argued that the respondent’s failure to deposit the amount should not have led to setting aside the decree, emphasizing that the decree should not have been overturned without sufficient reasons (!) (!) .
The respondent’s counsel contended that the appeal was properly filed under relevant procedural provisions and that the High Court’s decision to condone the lapse in deposit was justified because the deposit was made before the final judgment (!) (!) .
The law provides that conditional leave to defend can be granted, and if conditions are not fulfilled, a judgment in favor of the plaintiff can be passed (!) (!) .
An appeal against a decree under the relevant procedural rules is permissible, and errors or irregularities affecting the case’s decision can be challenged in such appeals (!) (!) .
The right to challenge an order granting conditional leave through revision is recognized, especially when it involves jurisdictional questions, but an appeal from the decree also encompasses challenges to such orders (!) (!) .
The court emphasized that a defence should not be dismissed as sham or moonshine without proper consideration of its merit, and that leave to defend should generally be granted unless the defence is clearly illusory or sham (!) (!) (!) .
The law permits the imposition of conditions on leave to defend to ensure speedy
JUDGMENT
S.B. Sinha, J.
1. Leave granted.
2. This appeal is directed against a judgment and order dated 31.8.2005 passed by the High Court of Judicature at Gujarat whereby and whereunder a first appeal filed by the respondent herein was allowed setting aside a decree passed in favour of the appellant herein under Order 37 Rule 3(6)(b) of the Code of Civil Procedure and remitting the suit to the trial court with the direction that the amount already deposited with the respondent by them in terms of the directions of the High Court shall be deemed to be the amount deposited under the lease granted by the trial court.
3. The basic fact of the matter is not in dispute.
Appellants supplied AC pressure pipes to the respondents. A sum of Rs.1,57,488/- became due. On the premise that as a small scale industrial unit, it cannot afford to block such a huge amount, plaintiff requested the defendants to release the said payment. The defendants having not released the outstanding payment, plaintiff became entitled to interest at the rate of 23% per annum being 5% higher than the bank rate per annum thereupon. Plaintiff filed a Summary Civil Suit in the court of Civil Judge (SD), Gandhinagar. Respondent filed an application for grant of leave to defend the suit. By reason of an order dated 27.11.2002, conditional leave was granted, directing :
"The application for leave to defend is hereby granted with a condition that the defendant may give security of 50% amount of the suit claim."
4. Concededly, the said amount was not deposited and, thus, the said condition was not complied with. On the premise that the defendants-respondents having not complied with the said directions, the conditional leave granted by the court would be deemed to have been refused, a decree as prayed for in paragraph 17 of the plaint was passed in the following terms:
"The present suit of the plaintiff is hereby allowed.
The decree as prayed for in para 17 of the suit as per Order XXXVII, Rule 3(6)(b) of the CPC is hereby passed accordingly and the defendants are hereby directed to pay the sum of Rs.21,18,335.65 ps. Jointly and Severally to the Plaintiff along with interest @ 23% per annum."
5. An appeal was preferred thereagainst. By an Order dated 3.3.2004, the High Court directed as under :
"At the suggestion of the Court, learned counsel for the parties pray for time to explore possibility of an amicable settlement. Hence S.O. to 16.3.2004.
In the meantime, the cheque for the amount of Rs.15,50,000/- deposited by the appellant-Gujarat Water Supply and Sewerage Board (original defendants) may be encashed by the
Court of the learned Civil Judge (S.D.), Gandhinagar, but the amount shall not be permitted to be withdrawn by the decree holder till further orders. Till further orders there shall also be further ad-interim stay of further execution proceedings."
6. Indisputably, the said order has been complied with. By reason of the impugned judgment, the High Court allowed First Appeal, opining :
"True it is that details of such defence were not given by the defendant, but non-supply of the material would not deter the defendant from raising a defence that the plaintiff did not perform his part of the agreement in supplying the material. True it is that the Court had granted the conditional leave in favour of the defendant and the defendant did not comply with the order but according to Mr. Munshaw, a big amount of Rs.10,59,168/- was to be deposited and before the amount could be arranged after due negotiation, the plaintiff applied for grant of a decree in his favour. It is submitted by Mr. Munshaw, that present is the case where this Court should condone lapses in making deposit and remit matter back to the trial court with a direction to decide matter on merits.
Though learned cousel for the plaintiff opposed the prayer but taking into consideration the totality of the circumstances and the fact that under the directions and orders of this Court 50 per cent of the suit amount has al
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