The captioned writ petition is filed by the

defendants feeling aggrieved by the order of the

learned Judge in refusing to grant leave to defend the

suit before the IV Additional District Judge and

Commercial Court, D.K., Mangaluru.

2.

The facts leading to the case are as under:

The respondents-plaintiffs have instituted a

recovery suit against the present petitioners. Plaintiffs

allege that the present petitioners have entered into

business

arrangements

with

second

respondent-

plaintiff wherein the present petitioners collectively

placed orders and entered into sales contracts for

2000 MT of dried raw cashew nuts. The respondents-

plaintiffs have specifically alleged at Para 8 of the

plaint that the present petitioners have failed to

arrange necessary funds to clear the dues and duties

4

and failed to collect the consignment and as a

consequence, the shipping company and the port

authority has levied demurrage and retention charges

against the consignment. Plaintiff alleges that the

present petitioners have paid only for 631.65 MT

under the original payment terms of cash against

document. In relation to balance amount, it is alleged

that petitioners requested the second respondent to

change

the

payment

terms

and

therefore,

a

settlement agreement was entered into and in terms

of the settlement agreement dated 29.4.2019, the

present defendants jointly and severally acknowledged

their

liability

with

respect

to

the

remaining

consignment. The respondents-plaintiffs allege that

the present petitioners-defendants failed to comply

the terms of settlement and hence, the present suit

came to be filed.

5

The

plaintiffs/respondents

have

filed

an

application under Order XXXVII Rule 3(4) read with

Section 151 of CPC. for summary judgment. The

present petitioners in response to the application for

judgment filed an affidavit seeking leave to defend the

suit. The learned Judge having examined the rival

contentions has declined to grant leave to the present

petitioners to defend the suit and the application filed

by the respondents-plaintiffs for summary judgment is

allowed. This order is under challenge.

3.

The learned Senior Counsel appearing for

the petitioners would vehemently argue and contend

that that the petitioners have good defence to claim

on merit. Therefore, he would contend that the

defendants are entitled for unconditional leave to

defend. It is further contended that the respondents

have illegally sold the cargo and therefore, the

allegation by the respondents that they have incurred

6

loss is totally baseless. The transactions clearly

indicate that the petitioners have made payments and

the same is not refunded by respondents-plaintiffs nor

goods are released. The plaintiffs have made a claim

even in respect of goods which are not released in

their favour. The respondents have high handedly

sold the cargo without intimating the petitioners which

invites penal consequences and therefore, to avoid a

criminal case, the present suit is instituted.

To buttress his arguments, he has placed

reliance on the following judgments:

"1. B.L.Kashyap & Sons Ltd. v. JMS Steels &

Power Corpn., (2022) 3 SCC 294.

2. IDBI Trusteeship V.Hub Town Ltd.,

2017(1) SCC 568.

3. Sundaram Finance Limited and Ors V.

T.Thankam 2015 (14) SCC 444.

4. Swastik Gases Pvt.Ltd. Vs. Indian Oil

Corporation Ltd. (2013) 9 SCC 32.

7

5. B.E.Simoese Von Staraburg Niedenthal &

Anr. Vs. Chhattisgarh Investment Ltd (2015)

12 SCC 225.

6. Dr. Jagmittar Sain Bhagat Vs. Dir. Health

services, Haryana and Anr. (2013) 10 SCC

136.

7. Ameet Lalchand Shah and others Vs.

Rishabh Enterprises and another (2018) 15

SCC 678.

8. Chloro Controls India Private Limited Vs.

Severn Trent Water Purification INC. and

Others. (2013) 1 SCC 641."

4.

Placing reliance on the judgment of the

Apex Court in the case of B.L.Kashyap & Sons Ltd

.vs. JMS Steels & Power Corporation¹ he would

submit that the leave to defend is a rule and denial is

an exception. He would further contend