JUDGMENT

ALTAMAS KABIR,J.

1. Leave granted.

2. This appeal, which is directed against the order passed by the Karnataka High Court on 26th June, 2008, in a proceeding under Order 37 of the Code of Civil Procedure, raises an interesting question of law regarding the interpretation of Rule 3, Sub-rule (5) thereof.

3. Rule 3, as it now reads, was introduced in Order 37 of the Code by way of amendment with effect from 1st February, 1977. Prior to such amendment, Rule 3 of Order 37 was as follows :-

"Rule 3. (1) The Court shall, upon an application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.

(2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit."

By virtue of the Code of Civil Procedure (Amendment) Act, 1976, Rule (3) of Order 37 was substituted by Rule 3 as it now exists and introduced various changes of which one of the more significant changes was the intro