The main legal point established in the judgment is that the court will refuse leave to defend in a suit if the defendant's defense is found to be frivolous and vexatious, and raises no substantial defence or genuine triable issues.

VALMIKI J. MEHTA, J.

C.M. Appl. No. 5706/2018 (for exemption)

1. Exemption allowed, subject to all just exceptions.

C.M. stands disposed of.

C.M. Appl. No. 5707- 08/2018 (for delays)

2. For the reasons stated in the applications, the delays of 12 days in filing the appeal and 4 days in re- filing the appeal are condoned, subject to just exceptions.

C.Ms. stand disposed of.

RFA No. 169/2018 and C.M. Appl. No. 5705/2018 (for stay)

3. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit impugning the judgment of the trial court dated 6.9.2017 by which the trial court has decreed the suit filed by the respondent/plaintiff by dismissing the leave to defend application filed by the appellant/defendant under Order XXXVII Rule 3 (7) CPC.

4. The facts of the case are that admittedly the appellant/defendant admits that he received a loan of Rs.15,00,000/- from the respondent/plaintiff in terms of cheque no. 377709 drawn on UCO Bank, Punjabi Bagh, New Delhi dated 9.3.2016 for a sum of Rs.15,00,000/- . It is also not disputed that the cheque was of the bank of the respondent/plaintiff and the amount was credited to the account of the appellant/defendant. Appellant/defendant in the leave to defend application pleaded that the loan of Rs.15,00,000/- was returned back by the appellant/defendant to the respondent/plaintiff in cash and in good faith the appellant/defendant neither took back the subject cheque of the appellant/defendant which was dishonoured on presentation being cheque No. 465877 dated 29.8.2016 for Rs.15,00,000/- nor and in fact any receipt evidencing payment to respondent/plaintiff was taken. It was pleaded by the appellant/defendant that he received the loan amount by means of a cheque, but he repaid the amount in cash with interest and in support of which appellant/defendant only relies upon certain entries made by him in his own hand in his own diary. The appellant/defendant contends that in fact he had given to the respondent/plaintiff not one cheque but a total of four cheques bearing nos. 465877, 465878, 465879 and 465880 and that respondent/plaintiff is misusing the cheques although the loan amount with interest stands repaid.

5. The principles with respect to grant of leave to defend application in an Order XXXVII CPC suit have been recently stated by the Supreme Court in the judgment in the case of IDBI Trusteeship Services Limited vs. Hubtown Limited (2017)1 SCC 568. The relevant paras of this judgment laying down the test with respect to grant of leave to defend are paras 17 to 17.6 and theses paras read as under:-

"17. Accordingly, the principles stated in paragraph 8 of Mechelec's case will now stand superseded, given the amendment of Order XXXVII Rule 3, and the binding decision of four judges in Milkhiram's case, as follows:

17.1. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the Plaintiff is not entitled to leave to sign judgment, and the Defendant is entitled to unconditional leave to defend the suit.

17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the Plaintiff is not entitled to sign judgment, and the Defendant is ordinarily entitled to unconditional leave to defend.

17.3 Even if the Defendant raises triable issues, if a doubt is left with the trial judge about the Defendant's good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.

17.4 If the Defendant raises a defence which is plausible but improbable, the trial