SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1987 Supreme(Raj) 672

RAJASTHAN HIGH COURT
J.R.Chopra, J.
Smt. Renuka Parihar and Anr. - Appellants
Versus
The Bank of Baroda and Ors. - Respondents
S.B. Civil Revision Petition No. 23 of 1987.
Decided On : 21-07-1987

Advocates:
For the Petitioner:D.K. Parihar, Advocate.
For the Non-Petitioner:P.K. Bhansali, Advocate.

A defendant is entitled to unconditional leave to defend a suit if he raises a triable issue, even if the defence is not a positively good defence.

Headnote:

ORDER 37, CIVIL PROCEDURE CODE - LEAVE TO DEFEND - CONDITIONS - SECURITY - WHEN CAN BE IMPOSED - PRINCIPLES.

Fact of the Case:

The defendants filed an application under Order 37, Rule 4 Civil Procedure Code to defend the suit on the grounds that the suit was brought on the basis of a pronote which was actually a hypothecation agreement or a mortgage deed and that the loan had been transferred to another person with the permission of the plaintiff.

Finding of the Court:

The court held that the defendants had raised a triable issue and were entitled to unconditional leave to defend the suit. The court further held that the lower court had erred in asking the defendants to furnish a Bank guarantee of Rs. 1,00,000/- as a condition for granting leave to defend.

Issues: Whether the document was a pro note or a hypothecation agreement or a mortgage deed.

Ratio Decidendi: The court held that the defendants had raised a triable issue and were entitled to unconditional leave to defend the suit. The court further held that the lower court had erred in asking the defendants to furnish a Bank guarantee of Rs. 1,00,000/- as a condition for granting leave to defend.

Final Decision: The court accepted the revision, set aside the order under revision and modified it to the extent that defendants No. 1 and 2 were permitted to defend the suit unconditionally.

JUDGMENT

1. - It is a defendants' revision against the order of the learned District Judge, Sirohi dated 30-10-1986 whereby the learned lower court has granted permission to the defendants No. 1 and 2 to defend the suit Under Order 37, Civil Procedure Code on furnishing a Bank guarantee of Rs. 1,00,000/-.

2. The facts necessary to be noticed for the disposal of this revision briefly stated are: that defendant No. 1 Smt. Renuka obtained a loan from the Bank of Baroda, Mount Abu Branch amounting to Rs. 1,22,171. 25P. for the purchase of F.C. Mahendra Mini Bus and executed a pro note in favour of the Bank for repayment of this amount @18.5% interest per year. The amount was made payable in monthly instalment of Rs. 3400/- each. The first instalment became due on 1-10-1982. It is alleged that defendant No. 1 Smt. Renuka Parihar has paid a sum of Rs. 65,900/- towards the loan. The Bank has, therefore, claimed now a sum of Rs. 1,19,886.50p. It is alleged by the plaintiff that on the application of defendant No. 1 Smt. Renuka Parihar and defendant No. 4 Sumanbhai, proceedings took place for the transfer of this Mini Bus in favour of defendant No. 4 Sumabhai. Taking advantage of those proceedings, which did not become final, defendant No. 1 Smt. Renuka Parihar wants to avoid her liability under the promissory note and therefore, the plaintiffs have filed this suit. Defendant No. 1 Smt. Renuka Parihar filed on application Under Order 37, Rule 4 Civil Procedure Code to defend the suit on the grounds that firstly the suit is alleged to have been brought on the basis of a pronote where as it is not a pronote but actually it is an hypothecation agreement or a mortgage deed and secondly, the vehicle-has been transferred to defendant No. 4 Suman Bhai with the permission of the plaintiff and actually, defendant No. 4 Sumanbhai is plying this bus She has contended that the plaintiff has obtained the Transfer of Ownership Form, duly signed from her and, therefore, the formality of transfer was complete so far as she is concerned and now she owes no liability to the Bank and the Bank has wrongly claimed the remainder of the debt from her. Actually, the Bank has started accepting the instalments from defendant No. 4. This application of defendant No. 1 was decided by the the impugned order by the impugned order by the learned lower court where in the learned lower court has observed that whether the document is a pro note or a hypothecation agreement or a mortgage deed is a triable issue and at the same time, it can be characterised as an important issue. It was further observed by the learned lower court that whether the loan has been transferred or not, this is definitely a triable issue, according to the admission of both the parties. The learned lower court's observations are quote ad verbetim:

";g dgk tk ldrk gS fd ;g fcUnq fopkj.kh; ,oa egRoiw.kZ fcUnq dh ifjHkk"kk esa vkrk gSA tgkWa rd _.k dk gLrkUrj.k dk iz'u gS] ;g nksuksa i{kksa ds dFkukuqlkj fu'p; gh fopkj.kh; fcUnq gSA"
What is a triable issue, this question came up for consideration before a learned Single Judge of the Gujarat High Court in Kochrabhai Ishwarbhai Patel v. Gopalbhai C. Patel, (AIR 1973 Guj. 29 wherein on the basis of the decision in Santosh Kumar v. Bhai Moolsingh, AIR 1958 SC 321 , and Milkiram (India) Pvt. Ltd. Chamanlal Brothers, AIR 1965 SC 1986 , it was observed by the learned Single Judge as follows:

"The test of a 'triable issue' is to find out whether the defendant would be able to resist the suit successfully if he proves the case. If the answer to this question is in the affirmative, the plea does involve a 'triable issue'."
The contention of the defendants is that firstly the document is not a pro note but it is a hypothecation agreement or a mortgage deed and secondly, the loan has been transferred in the name of defendant No. 4 Sumanbhai which is clear from the letter of the Bank filed by defendant No. 1.

3. On the other hand, Mr. P.K. Bhansali learned Couns













Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top