Back
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Mahendar Kumar Goyal, J.
Honeywala Industries – Appellant
Versus
Arun Kumar Jhoshi – Respondent
S.B. Civil Writ Petition No. 15670/2022
Decided On : 02-11-2022
Article 227 - Writ petition assailing the legality and validity of the order dated 13.09.2022 passed by the learned Additional District Judge No.3, Alwar in Civil Suit No.34/35/19 - Order 37 Rule 3 (5) CPC - The court discussed the provisions of Order 37 CPC, substantial defense, and the entitlement for unconditional 'leave to defend' based on the judgments of B.L. Kashyap and Sons Limited v. M/s JMS Steels and Power Corporation & Anr. and Ajay Shaw v. HDFC Limited.
Fact of the Case:
The plaintiff filed a suit for recovery of a loan amount against the defendant. The defendant's application for 'leave to defend' under Order 37 Rule 3 (5) CPC was dismissed by the trial Court. The defendant challenged this decision through a writ petition.
Finding of the Court:
The court found that the defendant had a plausible defense and was entitled to unconditional 'leave to defend' under Order 37 Rule 3 (5) CPC.
Issues: The main issue was the entitlement of the defendant for 'leave to defend' under Order 37 Rule 3 (5) CPC.
Ratio Decidendi: The court relied on the principles established in the judgments of B.L. Kashyap and Sons Limited v. M/s JMS Steels and Power Corporation & Anr. and Ajay Shaw v. HDFC Limited, emphasizing that grant of 'leave to defend' is the rule and denial is the exception, and that the defendant is entitled to unconditional leave if they have a substantial defense likely to succeed.
Final Decision: The writ petition was allowed, the order dated 13.09.2022 was quashed and set aside, and the application filed by the defendant seeking 'leave to defend' was allowed.
Certainly. Based on the provided legal document, the key points can be summarized as follows:
The main issue before the court was whether the defendant was entitled to unconditional leave to defend under Order 37 Rule 3 (5) CPC, which is granted when the defendant has a substantial or plausible defense likely to succeed (!) (!) .
The court emphasized that the grant of leave to defend is generally the rule, and its denial is the exception, especially when the defendant demonstrates a substantial or reasonable defense (!) (!) .
The defendant's primary contention was that the suit was not maintainable under Order 37 CPC because it was not based on a specific written contract, promissory note, or acknowledgment establishing a liquidated amount due (!) (!) .
The defendant argued that, given the nature of the claim and the absence of a clear, liquidated document, a detailed inquiry into the facts and evidence was necessary to determine liability, which cannot be done at the stage of granting leave to defend (!) (!) .
The court found that the defendant had a plausible defense, particularly the claim that the entire loan amount had already been repaid, and that the suit's basis was insufficiently supported by specific documents establishing the debt (!) (!) .
The court relied on principles that if a defendant raises a substantial or fair defense, they are generally entitled to unconditional leave, whereas conditions or security may be imposed only when the defense is doubtful, improbable, or raises issues of good faith (!) (!) .
The appellate court observed that the trial court erred in dismissing the defendant's application for leave to defend, given the plausible nature of the defense and the procedural requirements (!) (!) .
Consequently, the court set aside the order dismissing the defendant's application and granted unconditional leave to defend, allowing the defendant to contest the suit on its merits (!) .
Would you like a more detailed elaboration on any specific aspect?
JUDGMENT
1. This writ petition under Article 227 of the Constitution of India assails the legality and validity of the order dated 13.09.2022 passed by the learned Additional District Judge No.3, Alwar in Civil Suit No.34/35/19 whereby, an application filed by the petitioner/defendant (for brevity, "the defendant") under Order 37 Rule 3 (5) CPC seeking "leave to defend", has been dismissed.
2. The relevant facts in brief are that the respondent/plaintiff (for brevity, "the plaintiff") filed a suit for recovery of a sum of Rs.13,06,042/- alongwith interest against the defendant stating therein that he advanced a loan of rupees ten lac to the defendant on 18.03.2015 through Cheque No.062902 with interest @ Rs.1.35% per month. It is averred that interest rate was varied from time to time and some amount towards principal and/or interest was also paid by the defendant; but, an amount of Rs.13,06,042/- is still due. The defendant filed an application seeking "leave to defend" which has been dismissed by the learned trial Court vide its order dated 13.09.2022, impugned herein.
3. Learned counsel for the defendant, inviting attention of this Court towards the averments of the plaint, would submit that the suit filed by the plaintiff under the provisions of Order 37 CPC itself is not maintainable as it is not covered under any of the clauses therein. He submits that for determination as to whether any sum is due against him, detailed enquiry including evidence of the parties is required inasmuch as it is not based either on promissory note or any acknowledgment or any other document establishing his liability to pay the amount claimed in the suit. Learned counsel submits that misconstruing the judgement of Hon'ble Supreme Court of India in case of B.L. Kashyap and Sons Limited v. M/s JMS Steels and Power Corporation & Anr.: (2022) 3 SCC 294, the learned trial Court erred in dismissing his application. He submits that since he has plausible defence, he is entitled for unconditional "leave to defend". Learned counsel, in support of his submissions, relies upon a judgement of Hon'ble Delhi High Court in case of Ajay Shaw v. HDFC Limited: AIRONLINE 2018 DEL 653. He, therefore, prays that the writ petition be allowed, the order dated 13.09.2022 be quashed and set aside and the application filed by the defendant be allowed.
4. Per contra, learned counsel for the plaintiff submits that objection of the defendant as to maintainability of the suit under Order 37 CPC already stands rejected by the learned trial Court vide its order dated 06.03.2021 whereby, an application filed by the defendant under Order 7 Rule 11 CPC was dismissed. He submits that since the loan was advanced through a cheque, the suit is maintainable under Order 37 CPC. Learned counsel submits that in any case, even if the "leave to defend" is granted to the defendant, a condition to furnish bank guarantee be imposed.
5. Heard. Considered.
6. Indisputably, the amount claimed in the suit is not based on any document executed in between the parties or by the defendant. Admitting that the loan was advanced to him, the defendant has taken a categorical stand that entire loan amount with interest has already been repaid and nothing remains due against him. A perusal of the contents of plaint reveals that except that the loan was advanced through a cheque and certain payments have been made by the defendant through cheques which the plaintiff claims mostly to be against interest component, detailed enquiry would be required as to the rate of interest applicable from time to time and also to adjudge veracity of the defendant's defence that he has already repaid the entire amount. It is trite law that grant of "leave to defend" is a rule and denial is exception.
7. The Hon'ble Supreme Court has, in case of B.L. Kashyap and Sons Limited (supra), held as under:-
"33. It is at once clear that even though in IDBI Trusteeship Services Ltd. V. Hubtown Ltd.: (2017) 1 SCC 568, this Court has observ
The main legal point established in the judgment is the entitlement of the defendant for unconditional 'leave to defend' under Order 37 Rule 3 (5) CPC based on the existence of a substantial defense ....
A defendant in a summary suit is entitled to leave to defend if they raise plausible triable issues, even if the defense is not strong.
The main legal point established in the judgment is the court's discretion to grant conditional leave to defend based on the defendant's disclosure of a fair and reasonable defense, ensuring a delica....
A defendant's application for leave to defend must be considered on its merits and cannot be dismissed for non-prosecution.
A defendant must establish a substantial or triable issue to gain unconditional leave to defend under Order XXXVII; conditional leave can be issued if there are serious doubts regarding the genuinene....
In summary suits, leave to defend must be granted if the defendant raises substantial triable issues. The court must exercise its discretion judiciously, as the refusal of leave is an exception inten....
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 conditiona....
The main legal point established in the judgment is that leave to defend should not be refused unless the defendant's contentions are frivolous and do not raise any triable issue. The court emphasize....
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
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
