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1996 Supreme(SC) 2290
SUPREME COURT OF INDIA
S.C. Grewal, G.T. Nanavati, JJ.
Syndicate Bank - Appellant
Versus
M/s. Kona International (P) Ltd. and others - Respondents
Civil Appeal No. 8868 of 1996
Decided On : 08-05-1996
The main legal point established in the judgment is the discretion of the trial court in permitting the defendants to contest a suit subject to furnishing a bank guarantee under Order 37 of the Civil Procedure Code.
Headnote:
Order 37 - Civil Procedure Code - The court allowed the appeal, set aside the High Court's judgment, and restored the order of the trial court, which permitted the respondents to contest the suit subject to furnishing a bank guarantee.
Fact of the Case:
The appellant bank filed a suit against the respondents for the recovery of a sum of money. The trial court granted permission to the defendants to contest the suit subject to furnishing a bank guarantee. The High Court, however, granted unconditional leave to defend to the respondents.
Finding of the Court:
The court found that the High Court should not have granted unconditional leave to defend the suit, considering the facts and circumstances of the case. It held that the trial court did not commit any error in permitting the respondents to defend the suit subject to furnishing the bank guarantee.
Issues: The issue was whether the High Court erred in granting unconditional leave to defend the suit, and whether the trial court's decision to permit the respondents to contest the suit subject to furnishing a bank guarantee was appropriate.
Ratio Decidendi: The court's decision was influenced by the facts and circumstances of the case, leading to the conclusion that the trial court's order was appropriate and the High Court's judgment was set aside.
Final Decision: The appeal was allowed, the High Court's judgment was set aside, and the trial court's order permitting the respondents to contest the suit subject to furnishing a bank guarantee was restored.
ORDER :
1. Leave granted.
2. This appeal arises out of a suit filed by the appellant bank against the respondents under Order 37, Civil Procedure Code, for the recovery of a sum of Rs. 24,36,604.87 paise. The respondents moved an application under Order 37 Rule 3 seeking leave to defend. On the said application the trial Court namely Senior Sub Judge, Chandigarh, passed an order dated September 21, 1993 granting permission to the defendants to contest the suit subject to their furnishing bank guarantee of the amount of the suit. The respondents filed a revision petition against the said order of the Senior Sub Judge which has been allowed by the High Court by the impugned judgment dated March 25, 1994. The High Court has granted unconditional leave to defend to the respondents.
3. We have perused the impugned judgment of the High Court as well as the application for leave seeking to defend the suit that was filed on behalf of the respondents before the trial Court. In our opinion, this was not a case in which the High Court should have granted unconditional leave to defend the suit. Having regard to the facts an circumstances of this case, we are unable to hold that the trial Court has committed any error in permitting the respondents to defend the suit subject to their furnishing the bank guarantee of the amount of the suit.
4. We, therefore, allow the appeal, set aside the impugned judgment of the High Court and restore the order passed by the Senior Sub Judge, Chandigarh, permitting the respondents to contest the suit subject to their furnishing the bank guarantee of the amount of the suit. The said bank guarantee should be furnished by July 31, 1996. No costs.
Allowed.
