1980 Supreme(MP) 416

K. N. Shukla, J.
Shyam Timber Traders v. Munjilal.
C. Revn. No. 723 of 1980 (G); Decided on 20-11-1980.

Headnote:Civil P. C. 1908 -- O. 37, Rr. 2, 3 (4) and (5) -- summary suit under R. 2 -- leave to defend under R. 3 (4) -- when may be granted imposing condition -- amount admitted to be due -- effect of.

        The suit was instituted by the plaintiff-non-applicant under O. 37, R. 2 of the Code of Civil Procedure. The defendant-applicants sought leave to defend the suit. It was pleaded inter alia that the plaintiff was a money lender and had not complied with the provisions of the Money Leaders Act in respect of maintenance of accounts and sending annual statement thereof to the applicants. The learned lower Court granted leave to defendants applicants to defend the suit but imposed a condition for furnishing security for a sum of Rs. 5,000. The applicants are aggrieved by this part of the order which directs them to furnish security.

        Held : Learned counsel for the applicants invited my attention to the decision of the Supreme Court in M/s Mechalec Engineers and Manufactures v. M/s Basic Equipment Corporation (A.I.R. 1977 S. C. 517) and urged that when the Court had held that the defendants had raised a triable issue indicating that they had a fair and bonafide defence. Leave to defend should have been unconditional.

        Under the Code of Civil Procedure before its amendment by the Amendment Act of 1976, this legal position was undoubtedly applicable. But O 37 of the Code Civil Procedure has been amended by the Act of 1976. Second Proviso to subd`rule (5) of Rule 3 of O. 37 C. P. C. is as follows :--

        "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 in Court."

        In the instant case it was not in dispute that the defendants-applicants were indebted to the plaintiff non-applicant. Indeed, it was pleaded that the defendants-applicants had repaid a sum of Rs. 2,120/- towards interest only. In view of this clear admission, even if the defendants were to succeed in proving that the plaintiff was a money lender and had committed default in compliance with S. 7 of the Money Lenders Act, the defendants will still be liable to repay part of the amount claimed by the plaintiff in the suit. Thus although the Court should have acted under Proviso (2) to subd`rule (5) of R. 3 of O. 37. C. P. C. and directed the defendants to deposit the admitted amount, the Court in its discretion merely directed them to furnish security. This may be irregular but the Court had jurisdiction to impose this condition and the discretion was exercised properly. AIR. 1977 SC 577 referred to. Revision dismissed.