The court held that the trial court erred in granting leave to defend the suit to the defendant as the defenses raised by the defendant were weak and not bona fide.

Headnote:
The court held that the trial court erred in granting leave to defend the suit to the defendant as the defenses raised by the defendant were weak and not bona fide. The court found that the defendant had admitted the supply of goods pursuant to the agreement and had made payments, but then turned around to dispute the agreement on the ground of insufficiency of stamp duty. The court also found that the defendant had filed numerous frivolous interlocutory applications to delay the proceedings. The court directed the defendant to deposit the entire amount claimed in the suit as a condition precedent to defend the suit.
Fact of the Case:

The plaintiff, a medical equipment supplier, filed a summary suit against the defendant, a hospital, for recovery of dues under an agreement for the supply of medical equipment. The defendant filed an application for leave to defend the suit, raising three defenses: (1) that the agreement was invalid due to insufficient stamp duty; (2) that the plaintiff had failed to give notice to the government under Section 80 of the Code of Civil Procedure (CPC); and (3) that the court lacked territorial jurisdiction. The trial court granted leave to defend the suit.
Finding of the Court:

The court found that the defenses raised by the defendant were weak and not bona fide. The court found that the defendant had admitted the supply of goods pursuant to the agreement and had made payments, but then turned around to dispute the agreement on the ground of insufficiency of stamp duty. The court also found that the defendant had filed numerous frivolous interlocutory applications to delay the proceedings.
Issues: 1. Whether the trial court erred in granting leave to defend the suit to the defendant. 2. Whether the defenses raised by the defendant were weak and not bona fide.
Ratio Decidendi: The court held that the trial court erred in granting leave to defend the suit to the defendant as the defenses raised by the defendant were weak and not bona fide. The court found that the defendant had admitted the supply of goods pursuant to the agreement and had made payments, but then turned around to dispute the agreement on the ground of insufficiency of stamp duty. The court also found that the defendant had filed numerous frivolous interlocutory applications to delay the proceedings.
Final Decision: The court allowed the civil revision petition and set aside the order of the trial court granting leave to defend the suit to the defendant. The court directed the defendant to deposit the entire amount claimed in the suit as a condition precedent to defend the suit.

ORDER :

[G. Radha Rani, J.]

1. This Civil Revision Petition is filed by the petitioner aggrieved by the order dated 11.03.2022 passed in Interlocutory Application No.22 of 2022 in C.O.S.No.60 of 2021 on the file of the Special Judge for Trial and Disposal of Commercial Disputes, Ranga Reddy District, at L.B.Nagar.

2. The Revision Petitioner herein is the plaintiff in C.O.S.No.60 of 2021 and respondent in Interlocutory Application No.22 of 2022 in Commercial OS.No.60 of 2021.

3. The parties are hereinafter referred as plaintiff and defendant. C.O.S.No.60 of 2021 was filed by the plaintiff under Order XXXVII of the Civil Procedure Code, 1908 for recovery of a sum of Rs.69,44,57,832/- with contractual rate of interest @ 21% per annum from the date of the suit. The said suit is a summary suit, filed basing on the contractual agreement dated 30.08.2017.

4. Interlocutory Application No.22 of 2022 in COS.No.60 of 2021 was filed by the 1st defendant seeking leave of the Court to defend the summary suit.

5. The Managing Director of the 1st defendant filed an affidavit in support of the petition requesting the Court to treat the Written Statement filed in the suit as part and parcel of the application. It is stated that he received the notice on 16.12.2021 and filed Vakalat on 27.12.2021, and prayed leave of the Court to defend the said suit.

6. The respondent/plaintiff filed counter-affidavit contending that the I.A. was filed beyond the mandatory time prescribed under Rule 3(5) of Order XXXVII CPC and, therefore, they were entitled for a judgment forthwith under Rule 3(6)(a) of Order XXXVII of CPC. Summons for judgment in Form – IV(A) were served on the 1st defendant on 03.01.2022. The mandatory ten (10) day period prescribed for filing the application to leave to defend under Rule 3(5) expired on 13.01.2022; since 13.01.2022 fell within the Pongal Vacation, the same ought to have been filed on the reopening day, i.e., on 17.01.2022 vide Section 10 of the General Clauses Act, 1897. But, the present application was filed on 18.01.2022. Therefore, the plaintiff is entitled for judgment under Rule 3(6)(a) of Order XXXVII of CPC.

6.1 The plaintiff contended that the facts required to be pleaded for leave to defend were not raised, instead a request was made to read the contents of the Written Statement as part of the affidavit; when the Written Statement could not be taken on file, without leave being granted, request to read the contents of the Written Statement as part of the affidavit was without any basis, and the said I.A. was liable to be rejected.

6.2 He further contended that grant of leave to defend the suit under Rule 3(5) of Order XXXVII CPC was guided by the principles laid down by the Hon’ble Apex Court; the 1st defendant in his Written Statement had taken three Defences, viz.,

(1) that the plaintiff had pleaded falsehood and approached the Court with unclean hands by stating that “no relief was sought against (Government of Karnataka), and therefore, no notice under Section 80 was required”, though relief of attachment of equipment had been sought and, therefore, the suit was liable to be dismissed on the said ground;

(2) that the agreements dated 30.08.2017, 29.12.2018, 01.01.2019, 26.09.2019, 26.10.2019 and agreement concerning Koosamma Hospitals were invalid as they were improperly stamped and, therefore, no claim could be set-up under the said documents; and

(3) that the Court has no territorial jurisdiction to try the above suit.

6.3 Further, with respect to the Defence No.1 taken by the 1st defendant, the plaintiff contended that the 1st defendant had no locus to raise such an objection; and such an objection can be taken only by the 2nd defendant/Government of Karnataka as per the law laid down by the Courts and not by any other party to the suit. Even considering that such a notice was required to be issued under Section 80, the party to which such notice was required to be issued could itself waive such issuance of