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IN THE HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT SRINAGAR
Sanjay Dhar, J.
Ab. Rashid Dar & Anr. – Petitioner
Versus
Reyaz Ahmad Kuchay – Respondent
CM(M) No. 216/2022
Decided On : 11-11-2022
JURISDICTION - CHALLENGE TO CONDITIONAL LEAVE TO DEFEND - Constitution of J&K, Section 104; Civil Procedure Code, Order 37 - The court discussed the supervisory powers under Section 104 of the Constitution of J&K, akin to Article 227 of the Constitution of India, emphasizing the High Court's role in ensuring subordinate courts act within their authority. The court highlighted the principles governing leave to defend under Order 37 of the CPC, particularly the necessity for defendants to demonstrate a substantial or triable defense. The court concluded that the trial court's conditional leave to defend was justified given the defendants' failure to adequately dispute the plaintiff's claims.
Fact of the Case:
The petitioners challenged an order granting conditional leave to defend a suit for recovery of Rs. 12.00 lacs filed by the plaintiff, who claimed to have advanced money for a poultry business. The defendants contended that the suit was not maintainable under Order 37 of the CPC, arguing that the promissory note was for a lesser amount and that one defendant had not executed any relevant documents.
Finding of the Court:
The court found that the defendants did not dispute the receipt of money from the plaintiff and that their defense was based on peripheral issues rather than the core issue of debt owed. The trial court's conclusion that the defendants' defense was illusory was upheld.
Issues: Whether the trial court erred in granting conditional leave to defend the suit under Order 37 of the CPC and whether the defendants had a substantial defense warranting unconditional leave.
Ratio Decidendi: The court reiterated that under Order 37 of the CPC, if a defendant does not raise a substantial or genuine triable issue, the court may impose conditions for leave to defend. The defendants' failure to dispute the receipt of funds and their reliance on technicalities did not constitute a valid defense.
Final Decision: The petition was dismissed, affirming the trial court's order for conditional leave to defend, requiring the defendants to deposit Rs. 11,50,000/- or provide a bank guarantee.
JUDGMENT :
Sanjay Dhar, J.
1. The petitioners have invoked the jurisdiction of this Court under section 104 of the Constitution of J&K, which is in pari materia with Article 227 of the Constitution of India, for challenging order dated 30.08.2018 passed by learned Additional District Judge, Srinagar, in a suit filed by respondent against the them. By virtue of the impugned order, the petitioners (hereinafter referred to as the defendants) have been granted conditional leave to defend the suit filed by the respondent (hereinafter referred to as the plaintiff) and they have been directed to deposit an amount of Rs. 11,50,000/- in the Court or to furnish cash security in the shape of bank guarantee for the aforesaid amount.
2. The record would reveal that the plaintiff has filed a suit for recovery of Rs. 12.00 lacs from the defendants under the provisions of Order 37 of the Civil Procedure Code. It is the case of the plaintiff that defendant No. 1 (petitioner No. 1 herein) approached him and asked him to invest money in setting up of a poultry farm for which defendant No. 1 was to provide the land. According to the plaintiff, he paid an aggregate amount of Rs. 12.00 lacs to the defendants out of which an amount of Rs. 9.70 lacs was paid in cash to defendant No. 1 whereas an amount of Rs. 2.30 lacs was transferred into the accounts of defendant No. 2 and defendant No. 3, who was later on deleted from the array of defendants. The plaintiff further submitted that defendant No. 1 executed a promissory note for an amount of Rs. 12.00 lacs as guarantee. According to the plaintiff, he asked the defendants to execute partnership deed for the purpose of setting up of poultry business but they failed to do so. It is further alleged that the defendants failed to adhere to the agreed terms and conditions and the poultry farm was not set up nor they returned the money advanced by the plaintiff.
3. It appears that the plaintiff has filed the suit as a 'pauper/indigent person' and permission to file the suit as an 'indigent person' was granted by the trial court vide order dated 30.01.2018 after holding enquiry through Tehsildar concerned, whereafter summons in the prescribed form were issued to the defendants including the petitioners herein, who filed an application for leave to defend the suit in terms of sub-rule (5) of Rule 3 of Order 37 of the CPC.
4. In their application, the defendants submitted that even as per the case of plaintiff, defendant No. 2 has not executed any document that would warrant filing of a suit under Order 37 of the CPC as he is neither alleged to have executed any hundi or promissory note nor he is alleged to have executed any written agreement etc. It was further contended that defendant No. 2 has neither issued any hundi nor has he executed the promissory note on the basis of which the suit has been filed by the plaintiff. The defendants went on to contend that the suit has been filed for recovery of Rs. 12.00 lacs but the promissory note, on the basis of which the suit has been filed, is only for an amount of Rs. 10.00 lacs, therefore, the suit under the provisions of Order 37 of the CPC is not maintainable. It has been further contended that if contention of the plaintiff that he had advanced a sum of Rs. 9.70 lacs to defendant No. 1, is accepted, then there was no occasion for the said defendant to execute promissory note for an amount of Rs. 12.00 lacs, as has been claimed in the plaint. The defendants have also objected to the grant of leave to the plaintiff to file suit as an 'indigent person' on the ground that the plaintiff earns sufficient income for paying the court fees.
5. The learned trial court, after hearing the parties and considering the defence put up by the defendants in their application for leave to defend, came to the conclusion that the plea raised by the defendants that they have not executed the hundi and that the same is fabricated, is illusory and not real. According to the learned trial cou
The High Court's supervisory jurisdiction under Article 227 does not allow it to act as an appellate court; it must ensure that subordinate courts operate within their authority and adhere to establi....
The court affirmed that defendants are entitled to unconditional leave to defend if they raise triable issues, emphasizing the presumption in favor of granting such leave under the CPC.
The main legal point established in the judgment is that the availability of an appeal remedy under the CPC operates as a near total bar to the exercise of jurisdiction by the court under article 227....
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 ....
The court emphasized the limited scope of interference under Article 227 and the need for supervisory correction in exercising jurisdiction.
When an appeal lies against a decree in civil court, a petition under Article 227 is not maintainable, emphasizing the necessity to use available remedies.
Leave to defend may be conditional if doubts exist about the genuineness of the triable issues raised by the defendant.
Sections 91 of Indian Evidence Act, 1982 reads evidence of terms of contracts, grants and other dispositions of property reduced to form of document.
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