Andhra Pradesh High Court
Judges : P.RAMACHANDRA RAJU
Sannidi Kasi Viswanadham - Appellant
Versus
Gade Annapurnamma - Respondent
Decided On : 01-27-71
ORDER 37 RULE 3(2) - LEAVE TO DEFEND SUIT ON NEGOTIABLE INSTRUMENTS - CONDITIONS - IMPOSITION - PRINCIPLES - COURT'S DISCRETION - JUDICIAL LINES - BONA FIDE DEFENCE - TRIBABLE ISSUE - UNCONDITIONAL LEAVE.
Fact of the Case:
Petitioner challenged the condition imposed by the lower court while granting leave to defend the suits filed against him under Order 37 of the Code of Civil Procedure. The lower court had required the petitioner to furnish third-party immovable security for the suit claims.
Finding of the Court:
The court held that the lower court erred in imposing the condition of furnishing third-party immovable security as there was a triable issue in the suits and the petitioner had raised a bona fide defence. The court observed that leave to defend a suit under Order 37 should be granted unconditionally where the defence raises a triable issue, and conditions can only be imposed if the court is satisfied that the defence is not bona fide or that the defendant is trying to prolong the litigation.
Issues: Whether the lower court erred in imposing the condition of furnishing third-party immovable security for granting leave to defend the suits.
Ratio Decidendi: The court relied on the Supreme Court decisions in Santosh Kumar v. Mool Singh and Sangram Singh v. Election Tribunal, Kotah, which held that leave to defend a suit under Order 37 should be granted unconditionally where the defence raises a triable issue. The court observed that the petitioner had raised a triable issue in the suits and there was no material to suggest that the defence was not bona fide or that the petitioner was trying to prolong the litigation.
Final Decision: The court allowed the revision petitions, set aside the orders of the lower court, and granted the petitioner leave to defend the suits unconditionally.
( 1 ) IN both these Civil Revision Petitions common question is involved under similar facts and therefore they can be disposed of under a common order.
( 2 ) THE petitioner is the same in both the revision petitions though the respondent are different. The respondents have filed suit against the petitioner on the strength of some promissory notes, invoking the summary procedure as provided under Order 37 of the Code of Civil Procedure with regard to suits on negotiable instruments. The learned District Munsiff while granting leave to defend the suits as provided under O, 37, R. 3 (2) has imposed upon the petitioner a condition that he should give third party immovable security for the suit claims. These revision petitions have been referred against the condition imposed by there lower court in granting leave to defend the suits.
( 3 ) IN the fact of Cl. (2), O. 37, R. 3 it cannot seriously be disputed that in a suit under Order 37 the court has jurisdiction to impose conditions when granting leave to defend. But the question is whether, under the circumstances of the present case, the lower court has properly imposed the condition in question.
( 4 ) IT is provided in Cl. (1) O, 37 R. 3 that 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. According to the allegations made by the petitioner in the affidavits filed in support of the applicant for leave to defend the suits it is incumbent on the respondents to prove consideration for the promissory notes. Therefore as per this provision. the petitioner is entitled to leave to defend the suits. In Cl. (20 O, 37, R. 3 it is provided that leave to defend may be given unconditionally or subject to such terms as to does not say under what circumstances leave has to be granted unconditionally or subject to terms. Therefore the courts, having regard to the circumstances of the particular case, using their discretion having to grant leave conditionally or unconditionally.
( 5 ) THE question came to be considered by the Supreme Court in the decision Santosh Kumar v. Mool Singh, (AIR 1958 SC 321 ). In that case the Supreme Court held as follows:---------"though the court is given a discretion by Order 37, Rule 3 (2) it must be exercised along judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws. Those principles, so far as they touch the matter, are well known. Wherever the defence raises a "tribal issue", leave must be given and when that is the case it must be given unconditionally, otherwise the leave may be illusory. If the court is of opinion that the defence is not bona fide. then it can impose conditions and is not tried down to refusing leave to defend. But it cannot reach the conclusion that the defence is not bona fide arbitrarily. It is as much bound by judicial rules and judicial procedure in reached a conclusion of the kind as in any other matter, one, conditions cannot be imposed. The power to impose conditions is only there to ensure that there be a speedy trial. If there is reason to believe that the defendant is trying to prolong the litigation and leave a speedy trial. the conditions can be imposed. But that conclusion cannot be reached simply because the defendant does not adduce his evidence even before he is told that he may defend the action. "therefore it has to be seen whether there are sufficient grounds, in these cases, for imposing any conditions for granting leave to defend the suits.
( 6 ) THE case of the petitioner is that he nerve executed the suit promissory notes in favour of the respondents and he never borrowed any moneys from them as there was no need for him to borrow. There suit promissory notes are connected. In Marteru
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