Point of Law: Civil Suit - Set aside conditional ‘leave to defend’ suit - Suit had to be treated as an ordinary suit and not one under Order XXXVII. In other words, learned Trial Court erred in granting conditional leave to defend.

JUDGMENT :

CM (M) 344/2021, CM APPLN. 15168/2021 (by the petitioner u/S 151 CPC for interim directions/stay)

1. This petition has been filed under Article 227 of the Constitution of India by the defendant before the learned Trial Court. He is aggrieved by the order of the learned Trial Court granting conditional ‘leave to defend’ the suit filed by the respondent under Order XXXVII of the Code of Civil Procedure, 1908 (“CPC”, for short) and placing a condition of a deposit of Rs.10,00,000/- in the form of an FDR as security before the learned Trial Court.

2. The petitioner/defendant and respondent/plaintiff have business dealings as the petitioner/defendant used to purchase raw materials/chemicals used in the manufacturing of toys in his factory from the respondent/plaintiff. The suit was filed under Order XXXVII when two cheques issued by the petitioner for Rs.6,34,000/- and Rs.1,35,000/- were dishonoured. According to the respondent/plaintiff, these cheques were issued towards an outstanding sum of Rs.10,09,502/- payable by the petitioner/defendant towards raw materials purchased by him on credit. The suit is for the said sum of Rs.10,09,502/-.

3. In the impugned order, the learned Trial Court has noted that the petitioner/defendant had questioned the authenticity of the two cheques and had also stated that he had not received any goods in terms of the invoices as detailed in para No.6 of the impugned order and that the invoices 2 to 5 were forged and did not bear his signatures. It also noted that that though there was no interpolation seen in the amounts mentioned in words, the alterations in figures were alleged to be writ large. On a consideration of these submissions on behalf of the petitioner/defendant, it found it appropriate to hold that the defence raised by the petitioner/defendant could at best be described as plausible, therefore, the petitioner/defendant was found entitled to conditional leave to defend the suit.

4. In the present petition, it is submitted by the learned counsel for the petitioner/defendant, Mr. Rohit Goel that when the suit had been filed on the basis of invoices and a running account, the suit could not have been filed as one under Order XXXVII. He has pointed out that in several decisions of this court, particularly in Ajay Shaw v. HDFC Limited and Ors. 2018 SCC OnLine Del 9913, this court had held that when a suit was being filed on the basis of a running account and invoices and not a liquidated sum of money, the recourse to Order XXXVII was improper. It is the contention of the learned counsel that following these judgments, the learned Trial Court ought to have treated the suit as a regular suit and in any case granted unconditional leave to defend.

5. The learned counsel for the respondent Sh. Yogesh Kumar on the other hand submits that the suit was filed also on the basis of the dishonoured cheques and was not fully based on the invoices and therefore the suit was maintainable under Order XXXVII. It was also submitted that the suit in so far as it relates to the cheques be treated as one under Order XXXVII and as a regular suit for the remainder of the claim. This submission appears farfetched. In any case, the fact is that the learned Trial Court has granted leave to defend the suit to the petitioner/defendant, which has not been challenged by the respondent/plaintiff. The question before this court is limited to the correctness of the orders of the learned Trial Court imposing a condition while granting this leave to defend.

6. This Court has considered the submissions of both counsel, the record and the cited judgments. In Ajay Shaw (supra), the learned Single Judge of this Court referred to its earlier decision in IFCI Factors Ltd. Vs. Maven Industries Ltd. & Ors. 2015 SCC OnLine Del 13519 in detail and reiterated that suits based on invoices could not be filed under Order XXXVII CPC and such suits have to be filed as ordinary suits. It may be useful to reproduce para 16 of the judgment of