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1998 Supreme(Raj) 36

High Court Of Rajasthan
Judgename : A.S.GODARA
SHREE BIKANER WOOLS - Appellant
Versus
BANK OF RAJASTHAN LTD. - Respondent
C. R. P. 1105 Of 1997
Decided On : 01/13/1998

Advocates Appeared:
D.S.Shishodia, MANISH SHISHODIA, P.K.BHANSALI,

A defendant is entitled to unconditional leave to defend a summary suit if they have a good defence, a triable issue, or sufficient facts to entitle them to defend.

Headnote:

ORDER 37, CPC - SUMMARY SUIT - LEAVE TO DEFEND - CONDITIONS - DEFENDANT ENTITLED TO UNCONDITIONAL LEAVE TO DEFEND IF HE HAS A GOOD DEFENCE, A TRIABLE ISSUE, OR SUFFICIENT FACTS TO ENTITLE HIM TO DEFEND - COURT MAY IMPOSE CONDITIONS IF THE DEFENCE IS ILLUSORY OR SHAM - DEFENDANT MAY BE ALLOWED TO DEFEND ON CONDITION OF PAYMENT INTO COURT OR FURNISHING SECURITY.

Fact of the Case:

Plaintiff-Bank filed a summary suit under Order 37, CPC against the defendant-firm and another defendant-firm for recovery of Rs. 96986.22, being the value of wool sold and delivered by the plaintiff-Bank to the defendant-firm. The defendant-firm denied liability, claiming that the goods were sold to the other defendant-firm and that the hundi drawn on the defendant-firm was not accepted by them. The trial court granted unconditional leave to defend to the other defendant-firm but imposed a condition on the defendant-firm to furnish security of Rs. 1,00,000/-.

Finding of the Court:

The court held that the defendant-firm was entitled to unconditional leave to defend as they had raised a triable issue of fact and law. The court further held that the condition imposed by the trial court was not justified as the defence of the defendant-firm was not illusory or sham.

Issues: Whether the defendant-firm was entitled to unconditional leave to defend the summary suit.

Ratio Decidendi: The court relied on the principles laid down in Smt. Kiranmoyee Dassi v. Dr. J. Chatterjee, (1945) 49 Cal WN 246, which were approved by the Supreme Court in Mechalec Engineers and Manufacturers v. M/s. Basic Equipment Corporation, AIR 1977 SC 577. The court held that a defendant is entitled to unconditional leave to defend a summary suit if they have a good defence, a triable issue, or sufficient facts to entitle them to defend. The court may impose conditions if the defence is illusory or sham, but the defendant may still be allowed to defend on condition of payment into court or furnishing security.

Final Decision: The court allowed the revision petition and set aside the condition imposed by the trial court. The defendant-firm was granted unconditional leave to defend the summary suit.

Judgment


A. S. GODARA, J.

( 1 ) THIS revision petition has been preferred under S. 115, CPC, against the order dated 5-8-97 passed by the learned Addl. District Judge No. 2, Bikaner in Civil Summary Suit No. 31/96.

( 2 ) BRIEFLY stated, for the disposal of this petition, the relevant facts are that the petitioner-firm is carrying on the business of wool at Bikaner while Bijay Chand Surana as well as defendant-non-petitioner No. 2 Kamal Kumar are partners of the firm. Defendant-non-petitioner No. 1-firm is also carrying on business of wool at Kekari (District Ajmer ). Plaintiff-non-petitioner No. 1 - Bank instituted a summary suit purporting to be under the provisions of Rr. 1 and 2 of O. 37, CPC before the Court of District Judge, Bikaner against the defendant-petitioner-firm as well as defendant-non-petitioner-firm with the wool worth Rs. 96986. 22 from defendant-petitioner- firm and the latter was running a cash credit account with the plaintiff-Bank at Kekari. The goods (wool) were despatched from Kekari to Bikaner through builty No. 36156 dated 24-10-88 and the defendant No. 2 drew a bill of exchange (90 days hundi) for a sum of Rs. 96986. 22 on defendant No. 1 which was duly accepted by defendant No. 1 on 29-7-88 and, consequently, the bill of goods and MTR were delivered to the defendant No. 1 through the branch of the plaintiff-Bank at Bikaner and, on acceptance of the hundi by defendant No. 1, the sum of Rs. 96986. 22 was duly credited in the cash credit account of defendant No. 1 after discounting the hundi drawn on defendant No. 1. The defendant No. 1 was under obligation to have paid amount of the hundi, discount, interest and commission within the stipulated period of 90 days but the same was not paid till last. Even on demand from Bijay Chand Surana, partner of the defendant No. 1-firm, personally, he refused to oblige and his refusal was duly endorsed by the Notary on 13-4-89. Consequently, the plaintiff filed a suit for recovery of principal amount of Rs. 97,614. 22 plus Rs. 32,133. 54 as interest totalling Rs. 1,28,747. 76 against defendant No. 1 as well as defendant No. 2. Alternatively, it was held that instead of defendant No. 1, defendant No. 2 was liable for payment of amount to the plaintiff-Bank.

( 3 ) PURSUANT to summonses of the suit under sub-rule (2) of R. 2 of O. 37, the defendants entered appearance to contest this suit and the plaintiff thereafter served on the defendants summonses for judgment in compliance of sub-rule (4) of R. 3 of the said Order supported by an affidavit verifying the cause of action and the amount so claimed stating that in his belief there is no defence to the suit. Consequently, the defendants, separately, in view of the provisions of sub-rule (5) of R. 3 of the said Order, asked for grant of leave to defend unconditionally. The defendant No. 2 denied having accepted the hundi denying total liability and, instead, the defendant No. 2 pleading that the goods as per order of defendant of defendant No. 1 were despatched to Bikaner and the delivery was taken by the defendant No. 1 and, simultaneously, a hundi was drawn on defendant No. 1 for payment of the suit amount which was discounted through the agency of the plaintiff-Bank and so he had received payment of the price of the goods sold and delivered to the defendant No. 1 and, therefore, there did not arise any liability of payment by the defendant No. 2.

( 4 ) CONSEQUENTLY, while considering the prayer of the defendants as to whether they were entitled to grant of leave to defend either unconditionally or upon such terms as appearing to the Court to be just, vide his impugned order the learned trial Judge in the aforesaid circumstances, while observing that the defendants raised triable issues indicating that they have a fair, bona fide and reasonable defence though not a positively good defence, ordered that it was fair to grant permission to defend the suit unconditionally to defendant No. 2 whereas defendant No. 1 hav














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