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2011 Supreme(Chh) 189
2012(1) C.G.L.J. 383
HIGH COURT OF CHHATTISGARH, BILASPUR
Hon'ble Shri N.K. Agarwal, J.
SMT. KAMLESH SHARMA Appellant
Vs.
ICICI BANK LIMITED Respondent
Writ Petition (227) No. 7130 of 2008,
Decided on : 28-6-2011.
Shri Manoj Parnajpe, Advocate, for the Petitioner.
The defendant is entitled to unconditional leave to defend if they have a good defense to the claim on merits, and conditions imposed should not be unduly onerous.
Headnote:
Order 37 of CPC - Grant of Leave to Defend - The court set aside the condition of furnishing a bank guarantee imposed by the trial court and directed the trial court to decide the suit within six months.
Fact of the Case:
The respondent filed a summary suit for loan recovery against the petitioner. The trial court granted leave to defend subject to the condition of furnishing a bank guarantee equivalent to the amount claimed in the suit.
Finding of the Court:
The court found that the trial court's imposition of the condition was contrary to the law laid down by the Supreme Court and set it aside. The trial court was directed to decide the suit within six months.
Issues: The legality and propriety of the condition of furnishing a bank guarantee imposed by the trial court.
Ratio Decidendi: The defendant is entitled to unconditional leave to defend if they satisfy the court that they have a good defense to the claim on merits. Conditions imposed for grant of leave to defend should not be unduly onerous.
Final Decision: The court set aside the condition of furnishing a bank guarantee and directed the trial court to decide the suit within six months.
As per Hon 'ble Shri N.K. Agarwal, J. :-
1. Respondent/plaintiff filed a summary suit under Order 37 of CPC for recovery of loan amount to the tune of Rs 2,17,173/- against the petitioner/ defendant. After service of notice, the petitioner moved an application under Order 37 Rule 3(5) read with Section 151 of CPC for grant of leave to defend.
2. The trial court, vide order impugned, allowed petitioners application and granted leave to defend subject to condition of furnishing bank guarantee of the amount equivalent to the amount claimed in the suit.
3. Instant petition filed under Article 227 of the Constitution of India calls in question the legality and propriety of the part of order impugned whereby the trial court granted leave to defend subject to condition of furnishing bank guarantee of the amount equivalent to the amount claimed in the suit.
4. Shri Manoj Paranjpe, Learned counsel appearing for the petitioner would submit imposition of condition of furnishing bank guarantee as pre condition of grant of leave to defend, in the facts and circumstances of the case, is contrary to law and the trial Court has failed to exercise its discretion vested in it by law and also failed to appreciate Order 37 Rule 3 (5) of CPC in the light of decisions of Supreme Court in cases of M/s Sunil Enterprises and another Vs. SBI Commercial and International Bank Ltd.1 and M/s Fixity Packaging Industries Pvt. Ltd. & Ors. Vs. Udyen Jain (HUF)2.
5. I have heard the counsel appearing for the petitioner and perused the order Impugned.
6. In order to appreciate the contentions raised by Shri Paranjpe, it would be appropriate to re-produce the provisions contained in Order 37 Rule 3(5) of CPC, which reads as under :
"3 (5) The defendant may, at any time within ten days from service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court or Judge to be just:
Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious:
Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court."
7. The position in law has been explained by the Supreme Court in cases of Santosh Kumar Vs. Mool Singh3, Milkhiram (India) Private Ltd. Vs. Chaman Lal Bros4 and Michalec Eng. & Mfg. Vs. Bank Equipment Corporations. The propositions laid down in the above decisions have been summed up by the Supreme Court in case of M/s Sunil Enterprises• (Supra) which reads as under:
"(a) If the defendant satisfies the Court that he has a good defence to the claim on merits, the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence, although not a possibly good defence, the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is, if the affidavit disclosed that at the trial he may be able to establish a defence to the plaintiff's claim, the court may impose conditions at the time of granting leave to defend the conditions being as to time of trial or mode of trial but not as to payment into court or furnishing security.
(d) If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, the defendant is not entitled to leave•• defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine, the cou
