The Court's discretion in granting additional leave to defend a suit under Order 37 Rule 3(5) CPC must be exercised in accordance with settled principles of law and in relation to the subject matter of the claim in the suit.

Swatanter Kumar, J.

1. The short question that arises for consideration is, in regard to the scope of jurisdiction exercisable by the learned trial Court while granting additional leave to the defendant in a suit under Order 37 of the Code of Civil Procedure.

2. The relevant facts are that the plaintiff filed a suit for recovery of Rs. 69,158/- against the defendants. It was stated that the money had been lent to the defendant No. 1 and the payment was made by cheques amounting to Rs. 35,000/- and Rs. 5,000/- dated 25.11.1995, drawn on State Bank of Patiala. Defendant No. 2 and 3 had stood guarantor for defendant No. 1 for repayment of the said loan with interest at the rate of 17% per annum, as agreed. Documents for the grant of loan were executed.

3. The defendants upon putting in appearance filed an application in accordance with the provisions of Order 37 of the Code of Civil Procedure for leave to defend, the defendants claimed that they had not executed the document and had not taken the loan, as stated by the plaintiff. According to the defendants, the documents were forged and fabricated one and the rate of interest was stated to be, in any case, exorbitant and not recoverable.

4. The application for leave to defend was contested by the plaintiff. According to the plaintiff, the application was not maintainable and was beyond time. The trial Court come to the conclusion that triable issues were raised by the defendants. However, it granted conditional leave, vide order dated 17.7.1997. The learned trial Court directed the applicant-defendants to furnish security for the sum of Rs. 10,000/-. It is this order which has been challenged in this revision before this Court.

5. It is not disputed that the application for leave to defend the suit was filed beyond time. However, the delay in filing of this application was condoned on the concession given by the counsel for the non applicant-plaintiff, as recorded by the learned trial Court. Thus, this ground would not survive for consideration before this Court now.

6. From the above narrated facts, it is clear that the claim of the plaintiff was based upon a written document executed in furtherance to the loan received by cheque. However, in the written statement, no specific and definite reply or execution was referred in relation to the cheque. However, execution of the document was denied and the agreement was stated to be forged and fabricated one. The learned trial Court considering the merit of the defence found that triable issues were raised and, therefore, granted leave in the above stated manner. Exercise of discretion in granting additional leave to the limited extent of furnishing security for Rs. 10,000/- is the sole question to be decided in this revision.

7. According to the learned counsel for the petitioner, learned trial Court has not exercised the discretion in consonance with the settled principle of law and, therefore, the order suffers from an error of jurisdiction apparent on the face of it.

8. Sub-Rule (5) of Rule 3 of Order 37 of the Code of Civil Procedure reads as under:-

"(5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just: Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious.

Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant