Issadeen & Co. Ltd. V. Wimalasuriya

1960 Present : Weerasooriya, J., and T. S. Fernando, J.

ISSADEEN & COMPANY LTD., Appellant, and  WlMALASURIYA,
Respondent

S. C. 105 - D. C. Matura, 1355

    Civil Procedure Code-Action by summary procedure on a liquid claim-Disclosure of prima facie defence in regard to part of claim-Defendant's right to defend unconditionally-Sections 704 (2), 706.

Plaintiff filed action by way of summary procedure under Chapter 53 of the Civil Procedure Code for the recovery of a sum of Rs. 20,000. The Court did not consider as lacking in good faith the defence that only a sum of Rs. 7,600 was due to the plaintiff.

Held, that the defendant was entitled to be allowed to appear and defend the action without being called upon to furnish any security at all. There is nothing in section 704(2) of the Civil Procedure Code which precludes its application to a case where a prima facie sustainable defence is disclosed in regard to only a part of the claim while the rest of it is admitted.

APPEAL from a judgment of the District Court, Matara.

C. Ranganathan, with D. R. P. Goonetilleke, for the Defendant-Appellant

S. D. Jayasundera, for the Plaintiff-Respondent.

Cur. adv. vult.

May 27, 1960. WEERASOORIYA, J. -

The plaintiff-respondent filed this action by way of summary procedure under Chapter L111 (Sections 703-711) of the Civil Procedure Code for the recovery of a sum of Rs. 20,000/00 alleged to be due on two cheques drawn by the defendant-appellant for Rs. 18,000/- and Rs. 2,000/- the payment of which was subsequently stopped by the drawer.

In the affidavit filed in support of the defendant's application for leave to appear and defend the action, it was stated, inter alia, that the two cheques were given as security for a loan of Rs. 10,000/- from the plaintiff, that out of this loan a sum of Rs. 2,400/- was deducted in advance as interest and a like amount was subsequently paid by the defendant in reduction of the principal, leaving only Rs. 7,600/- owing to the plaintiff on the transaction. The defendant did not bring into Court the sum admitted to be due on the ground that the plaintiff was not yet entitled 'to it as the period in respect of which interest was deducted in advance had not elapsed. The affidavit is, however, silent as to what that period

is, or at what rate interest was deducted in advance, nor does it state that the defendant holds any receipt or other documentary evidence in support .of the deduction of interest or part payment of principal as alleged.

After inquiry, the District Judge made order allowing the defendant leave to appear and defend, subject to security being given in a sum .of Rs. 7,000/- in cash or double that amount in land. It is against this .order that the defendant has filed the present appeal.

No reasons have been given by the District Judge for requiring security to be given, nor has he stated how the amount of the same was arrived .at. Notwithstanding, however, the somewhat unsatisfactory nature of the affidavit filed by the defendant, the order of the learned Judge would .appear to indicate that he did not consider as lacking in good faith the -defence that only a sum of Rs. 7,600/- is due to the plaintiff. The short point that arises for decision on this appeal is, therefore, whether in the circumstances the defendant should not have been allowed to appear and defend the action without being called upon to furnish any security .at all.

Mr. Ranganathan who appeared for the defendant-appellant, relied on .section 704(2) of the Civil Procedure Code which reads as follows :

"The defendant shall not be required, as a condition of his being allowed to appear and defend, to pay into Court the sum mentioned in the summons, or to give security therefor, unless the Court thinks his defence not to be prima facie sustainable, or feels reasonable doubt as to its good faith."

Mr. Ranganathan submitted that there is

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