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2005 Supreme(MP) 1040

K.K. Lahoti, J.
Devendra Kumar Jain v. G.N. Goyal
Writ Petition No. 4236 of 2004 (J); Decided on 14.10.2005.*

Advocates:
Arvind Shrivastava for petitioner; Rohit Arya with Sanjay Lal for respondent.

Headnote:Civil P.C., 1908 -- O. 37 R. 3 (5) and 3 (6) -- unconditional leave to defend granted under O. 37 R. 3 (5) -- no condition of depositing entire suit amount can thereafter he imposed under O.37 R. 3 (6) -- only security can be ordered to he furnished.

       

        flfoy izfdz;k lafgrk] 1908 && vk- 37 fu- 3 ¼5½ rFkk 3 ¼6½ && izfrj{kk djus dh v‘krZ btktr vk- fu- 3 ¼5½ ds v/khu iznku dh xbZ && rRi‘pkr~ laiw.kZ okn jde fuf{kIr djus dh ‘krZ vk- 37 fu- 3 ¼6½ ds v/khu vf/kjksfir ugha dh tk ldrh && dsoy izfrHkwfe nsus ds fy, vknsf‘kr fd;k tk ldrk gSA

Judgement Key Points

Summary of the Judgment:

The petitioner, a practicing advocate, challenged an order dated 4.10.2004 by the 1st Additional District Judge, Bhopal, in a summary suit under Order 37 CPC (Civil Suit No. 3-B/2004), directing deposit of Rs. 2,50,000. (!) (!)

The suit was filed by the respondent, a retired judicial officer turned advocate, against the petitioner on promissory notes. Summons in Form No. 4 Appendix B were issued; petitioner appeared. Summons for judgment in Form No. 4A followed. Petitioner filed grounds of defense within time under Order 37 Rule 3(5) CPC, and the trial court granted unconditional leave to defend on 16.7.2004, finding a plausible defense, fixing written statement for 29.7.2004. (!)

Petitioner's grounds: (i) No condition imposed while granting unconditional leave under Order 37 Rule 3(5); trial court cannot later direct deposit of suit amount at summons for judgment stage. (!) (ii) Stage under Rule 3(6) allows only furnishing security, not payment of suit amount. (!)

Respondent supported the order: Even after unconditional leave under Rule 3(5), court empowered under Order 37 at summons for judgment to direct deposit, especially in summary suits, to prevent frustration of proceedings if no triable issue. (!) (!) (!)

Relevant Provisions: Order 37 Rule 3(5) CPC allows defendant, within 10 days of summons for judgment, to apply for leave to defend by disclosing sufficient facts; leave granted unconditionally or on just terms, not refused unless no substantial defense or frivolous; if part amount admitted due, must deposit it. (!) (!) (!) Rule 3(6): At hearing, if leave granted for whole/part claim, court may direct security within fixed time; failure entitles plaintiff to judgment forthwith. (!) (!) (!)

Court's Analysis and Reasoning: Trial court granted unconditional leave after considering merits, unchallenged by plaintiff. Thereafter, under Rule 3(6)(b), court may direct security if leave permitted, but not deposit of entire suit amount (here, promissory notes value) as "security." Word "security" in restricted sense secures suit amount payment, not equates to full deposit, else frustrates unconditional leave and Rule 3(6) purpose. Court cannot revisit leave stage; post-leave, only security direction permissible, not full payment disguised as security. (!) (!)

Trial court erred directing deposit of full Rs. 2,50,000 as security. (!)

Decision: Petition allowed partly; impugned order modified—petitioner to furnish security to trial court's satisfaction for Rs. 2,50,000; deposit direction set aside. No costs. (!)


JUDGMENT


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.

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.

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 CPC 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.

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 and another AIR 1998 SC 2931 directed the defendant to deposit Rs. 2,50,000/-, the amount of two promissory notes, in the trial Court. This order is under challenge in this case.

To appreciate rival contention of the parties, it is necessary to look into the relevant provisions, sub-rule (5) & (6) of rule 3 of Order 37 CPC 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, and leave to defend m
















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