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1983 Supreme(Mad) 615

Madras High Court
RAMANUJAM
K.S.Meenakshi Ammal - Appellant
Versus
M.Subbalakshmi Ammal - Respondent
Decided On : 12/23/1983

Advocates:
T. Chengalvarayan for M/s. Anand, Dasgupta and Sagar, for Petitioners, K. Chandramouli, for Respondent.

The court may impose a condition for granting leave to defend to the petitioners if the defence is illusory or sham.

Headnote:

ORDER 37 RULE 3(5) C.P.C. - LEAVE TO DEFEND - CONDITION FOR GRANT OF LEAVE - COURT MAY IMPOSE CONDITION FOR GRANT OF LEAVE TO DEFEND IF THE DEFENCE IS ILLUSORY OR SHAM - COURT MAY PROTECT THE PLAINTIFF BY ONLY ALLOWING THE DEFENCE TO PROCEED IF THE AMOUNT CLAIMED IS PAID INTO COURT OR OTHERWISE SECURED.

Fact of the Case:

The petitioners, defendants in a suit for recovery of money based on a promissory note, filed an application for leave to defend the suit. The trial court granted leave to defend on the condition that the petitioners deposit the entire amount claimed in the suit within one month.

Finding of the Court:

The court found that the petitioners had not raised any substantial defence or shown that any triable issue arises in the case and that the defence is practically illusory. However, the court felt that an opportunity should be given to the petitioners to defend the suit, but that opportunity could be given only on condition that they deposit the entire amount claimed in the suit.

Issues: Whether the trial court can impose a condition for granting leave to defend to the petitioners.

Ratio Decidendi: The court held that the trial court can impose a condition for granting leave to defend to the petitioners if the defence is illusory or sham. The court relied on the decision of the Supreme Court in Aechalec Engineers and Manufacturers v. Basic Equipment Corporation, AIR 1977 C 577, which held that the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into court or otherwise secured.

Final Decision: The court modified the trial court's order and granted leave to defend on the condition that the petitioners deposit half the amount claimed in the suit within two months from the date of the order.

Judgement

ORDER : - This revision is directed against the order of the lower Court in so far as it is against the petitioners herein. The petitioners herein are the defendants in O. S. 5346 of 1981 on the file of the City Civil Court, Madras, which is a suit filed for recovery of Rs.95200 with interest on the basis of a promissory note, Since the suit is based on a negotiable instrument. the said suit has been filed under O.37. C. P. C. The defendants applied to the Court below in I. A. 5633 of 1982 for leave to defend the said suit. In the application for leave to defend, they have raised various defences. After considering the defences taken in the application for leave to defend, the court below held that the plea put forward in the application for leave to defend cannot be true and. therefore, there is no triable issue. The court below, however, felt that the defendants could be given an opportunity to defend the suit, if they pay the entire amount claimed in the suit within one month from the date of the order. The trial court, therefore, ordered on 27-1-1983 that on the defendants depositing the entire amount claimed in the suit within 27-2-1983,they will be granted leave to defend. The defendants are not aggrieved against that portion of the order which granted them leave to defend, but they are aggrieved by the condition imposed by the lower court. Their case is that the lower court cannot impose such a condition and that in any event, the condition imposed is so onerous as to prevent the defendants from availing of the opportunity to defend suit given by the court below.

2. Before me, the learned counsel for petitioners submits, relying on the decision of the Supreme Court in Aechalec Engineers and Manufacturers v. Basic Equipment Corporation, AIR 1977 C 577 that once the court is inclined to grant leave to defend, the court may » pose conditions as to time or mode of ial, but not as to payment into court or furnishing security for any sum. It is no doubt true in that case the Supreme Court as pointed out that if the defendant is closes such facts as may be deemed efficient to entitle him to defend, so as to lead to the inference that at the trial of the action, he may be able to establish a defence to the plaintiff's claim, the plaintiffs not entitled to judgment and the defendant is entitled to leave to defend and in such a case, the court may in its discretion impose conditions as to the time node of trial, but not as to payment into court or furnishing security. The facts in this case are somewhat different and the said principle laid down by the Supreme Court cannot be invoked. On the other hand, the facts in this case attract the other principle laid down in the same decision of the Supreme Court, which is as follows (at P. 580) -

"If the defendant has no defence or the defence is illusory or sham or practically moon-shine then although ordinarily the plaintiff is entitled to leave to sign judgment, the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence."

3. A perusal of the order of the lower court, which is the subject-matter of revision before this court clearly shows that the court below has found that the defendants have not raised any substantial defence or shown that any triable issue arises in the case and that the defence is practically illousry. The lower court then proceeded to say that none-the-less it is inclined to grant leave to defend to the defendants if they deposited the entire amount claimed in the suit. Thus, though the lower court felt that there is no triable issue for grant of leave to defend, having regard to the amount involved, it thought that an opportunity should be given to the defendants to defend the suit, but that opportunity could be given only on condition that they dep


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