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2005 Supreme(MP) 1039

High Court Of Madhya Pradesh
K. K. LAHOTI
DEVENDRA KUMAR JAIN - Appellant
Versus
G.N.GOYAL - Respondents
W. P. 4236 Of 2004
Decided On : 10/14/2005

Advocates Appeared:
Arvind Shrivastava, ROHIT ARYA, Sanjay Lal

The main legal point established in the judgment is the interpretation of the provisions of Rule 3 of Order 37 CPC, emphasizing the power of the court to grant leave to defend and the scope of directing the defendant to furnish security.

Headnote:

CPC - Summary Suit - Rule 3 of Order 37 CPC - [Rule 3 of Order 37 CPC] - The court discussed the provisions of Rule 3 of Order 37 CPC, emphasizing the power of the court to grant leave to defend unconditionally or on such terms as may appear to be just. The court also highlighted the requirement for the defendant to deposit the amount admitted to be due in court and the scope of directing the defendant to furnish security.

Fact of the Case:

The petitioner, a practicing advocate, challenged an order directing them to deposit Rs. 2,50,000 in a civil suit filed under Order 37 CPC. The trial court had granted unconditional leave to defend, but later directed the petitioner to deposit the suit amount as security.

Finding of the Court:

The court found that the trial court erred in directing the petitioner to deposit the entire amount of promissory notes as security, as it would render the grant of unconditional leave to defend redundant.

Issues: The key issue was whether the trial court had the authority to direct the defendant to deposit the entire suit amount as security after granting unconditional leave to defend.

Ratio Decidendi: The court emphasized the provisions of Rule 3 of Order 37 CPC, highlighting the power of the court to grant leave to defend and the requirement for the defendant to deposit the admitted amount due. The court interpreted the word 'security' in the context of securing payment of the suit amount and not beyond it.

Final Decision: The petition was allowed in part, directing the petitioner to furnish security for Rs. 2,50,000, and setting aside the order to deposit the amount of promissory notes.

( 1 ) PETITIONER has assailed order dated 4-10-2004 passed by the 1st Additional District Judge, Bhopal in regular Civil suit No. 3-B/2004 by which learned Judge has directed the petitioner to deposit Rs. 2,50,000/- in the Court.

( 2 ) THIS order has been assailed by the petitioner on following grounds :- (i) That, the suit was filed under Order 37 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'cpc') and while granting leave to defend in the case, no such condition was imposed by the trial Court. Then, at the time of hearing of summons for judgment, the trial Court cannot direct the petitioner to deposit the suit amount. (ii) That, in the case the stage of passing such an order was under sub-rule (6) of Rule 3 of Order 37 CPC which provides only furnishing of security and not payment of suit amount. In these circumstances, impugned order deserves to be quashed.

( 3 ) LEARNED counsel appearing for respondent supported the order and submitted :- (a) That, though under sub-rule (5) of rule 3 of Order 37 CPC, the trial Court granted leave to defend unconditionally even then at the time of hearing of summons for judgment, the Court is empowered to direct the defendant to deposit the amount. The suit is filed under Order 37 CPC which is a summary suit and the trial Court was empowered at that stage to direct the defendant to deposit the amount. (b) The power has been exercised under order 37 C. P. C. and the Court is to see whether there Is any triable issue. If the court at the time hearing of summons for judgment finds that there is any triable issue, it can direct the defendant to deposit entire suit amount. The defendant has challenged the order just to delay the proceedings and if the amount is not deposited as directed by the trial Court, filing of suit under Order 37 CPC will be frustrated.

( 4 ) TO consider the rival contentions of the parties, facts of the case may be seen. The petitioner is a practising advocate at bina, District Sagar. Respondent was judicial officer, holding an office as Additional district Judge and has retired from the service in the year 1994. Thereafter, he started practising at Bhopal. Respondent filed a suit under Order 37 CPC against the petitioner. It is registered as Civil Original Suit no. 2-B/2004 and is pending before 9th Additional District Judge, Bhopal. A summons, as required in form No. 4 in Appendix B was issued to the petitioner and the petitioner caused his appearance. Thereafter, plaintiff served on the defendant a summons for judgment in form No. 4a in Appendix B. The defendant within time prescribed under sub-rule (5) of Rule 3 filed ground of defence and sought leave of the Court to defend the suit. The trial Court by order dated 16-7-2004 annexure P/5 found that the defendant has shown a plausible defence and granted leave to defend unconditionally and the case was fixed for filing written statement on 29-7-2004. Thereafter, plaintiff filed an application under sub-rule (6) of Rule 3 of Order 37 CPC praying to the Court that the defendant be directed to deposit decretal amount by way of a security in the Court. The trial court by the impugned order allowed the application on the ground that the defendant who is senior advocate has admitted his signature on the promissory note and relying on the judgment of the Apex Court in Rajesh Ahuja v. Manoj Mittal, AIR 1998 sc 2931 directed the defendant to deposit rs. 2,50,000/-, the amount of two promiscory notes, in the trial Court. This order is under challenge in this case.

( 5 ) TO appreciate rival contention of the parties, it is necessary to look into the relevant provisions, sub-rules (5) and (6) of Rule 3 of Order 37 C. P. C. which are quoted as hereinunder : rule (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,





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