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Jagdish Pershad Vs. Des Raj and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 411 of 1968
Judge
Reported inILR1969Delhi6
ActsCode of Civil Procedure (CPC), 1908 - Order 37, Rule 3
AppellantJagdish Pershad
RespondentDes Raj and ors.
Advocates: S.S. Chadha,; D.P. Khurana and; H.N. Chaudhary, Advs
Cases ReferredMilkhiram (India) Private Ltd. v. Chamanlal Bros.
Excerpt:
.....and fast rules in matters affecting discretion to be exercised in granting or refusing leave to defend suits under order 37 of the code. each case has of course to be decided on its own peculiar circumstances. - - 5,000.00. the court below has observed that the plea regarding insufficiency of consideration is nto a good ground on the basis whereof leave to defend can be granted. i may add that antoher object is that where a decree is secured in a case like the present, its execution and enjoyment of its fruits is also nto unnecessarily delayed, for reasons which can, without undue hardship, be avoided. but be that as it may, the test which is normally attracted is whether the defense raises a real issue and nto a sham one, in the sense that if the facts alleged by the defendant are..........it would be erroneous exercise of discretion on the part of the court to grant leave to defend the suit unconditionally.(4) in my opinion, the rule laid down by the supreme court in santosh kumar's case has to be followed in the case in hand. i am nto unmindful of the fact that it is undesirable, if nto impossible. to lay down hard and fast rules in matters affecting discretion to be exercised in granting or refusing leave to defend suits under order 37 of the code. each case has of course to be decided on its own peculiar circumstances, but it is always necessary to understand the reason for the special procedure prescribed by the legislature while granting leave. by and large, the object of the statutory provision in question is that the defendant does nto unnecessarily .prolong the.....
Judgment:

I.D. Dua, J.

(1) This revision is directed against the order dated 29-7-1968 of a learned Subordinate Judge 1st Class. Delhi, granting leave to the defendant-petitioner in this Court to defend the suit instituted on the basis of a promissory ntoe dated 27-6-1967 under Order 37 of the Code of Civil Procedure on the condition that he furnishes suitable security in the sum of Rs. 6,200.00

(2) It appears that there were three defendants against whom the suit was instituted, but one of the defendants remained absent and the proceedings against him were ex- parte. The toher defendant denied his signatures on the promissory ntoe and on. account of this denial, he was granted leave to defend the suit without any conditions. The petitioner in this Court admitted his signatures on the promissory ntoe but pleaded that the promissory ntoe in question was for consideration only to the extent of Rs. 2,700.00, although the amount mentioned therein was Rs. 5,000.00. The Court below has observed that the plea regarding insufficiency of consideration is nto a good ground on the basis whereof leave to defend can be granted. The furher plea that the plaintiff was a money-lender was also considered nto to be a plea justifying permission to defend the suit. After so observing, the Court below expressed its opinion categorically that there was no ground for granting leave to defend to defendant No. 1 who is the petitioner in this Court, but as leave to defend had been granted to antoher defendant, the Court thought that leave should also be granted to the present petitioner because the transaction to be adjudicated upon was the same for btoh of them. While granting leave on this premise, the condition mentioned above was imposed.

(3) The learned counsel for the petitioner in this Court has very strongly contended that this approach is erroneous and is nto justified either on the statutory language or on the reccgnised principles which govern the discretion for the purpose of granting or refusing leave to defend Order 37 of the Code. He has. placed reliance on a Supreme Court decision in Santosh Kumar v. Bhai Mool Singh, and on a decision of this Court in Naresh Chandra Mital v. Bishamber Nath Chopra in which a later decision of the Supreme Court reported as Milkhiram (India) Private Ltd. v. Chamanlal Bros. , was also ntoiced. It may be pointed out that in the later Supreme Court decision, the amendment made by the Bombay High Court in Order 37, Rule 2, fell for consideration. It is this decision on which reliance has been placed in this Court on behalf of the respondent who has laid great stress on the contention that once a defendant admits his signatures on a promissory mtoe, then it would be erroneous exercise of discretion on the part of the Court to grant leave to defend the suit unconditionally.

(4) In my opinion, the rule laid down by the Supreme Court in Santosh Kumar's case has to be followed in the case in hand. I am nto unmindful of the fact that it is undesirable, if nto impossible. to lay down hard and fast rules in matters affecting discretion to be exercised in granting or refusing leave to defend suits under Order 37 of the Code. Each case has of course to be decided on its own peculiar circumstances, but it is always necessary to understand the reason for the special procedure prescribed by the Legislature while granting leave. By and large, the object of the statutory provision in question is that the defendant does nto unnecessarily .prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defenses in class of cases where speedy decisions are desirable in the interests of trade and commerce. I may add that antoher object is that where a decree is secured in a case like the present, its execution and enjoyment of its fruits is also nto unnecessarily delayed, for reasons which can, without undue hardship, be avoided. It is on this ground and for testing the bone fide of the defendant that in fit and suitable cases appropriate conditions are imposed by the Courts while granting leave to defend. But be that as it may, the test which is normally attracted is whether the defense raises a real issue and nto a sham one, in the sense that if the facts alleged by the defendant are established, there would be a good, or even a plausible defense, on those facts.

(5) Applying this test to the case in hand, it seems to me to bejust and equitable that leave should be granted to the present petitioner in this Court to defend the suit on furnishing adequate security for the amount which, according to his own written statement, is admitted to be the consideration for the promissory ntoe and costs etc. The promissory ntoe and the receipt, the blanks of which are filled in by hand, itself expressly recites that out of the consideration of the sum of Rs. 5,000.00, the sum of Rs. 2,000.00 was received by cheque and the sum of Rs. 3,000.00 in cash. The three signatures of the persons who ostensibly took the loan, appear on the stamps whereas the fourth signature appears at the btotom of the stamps. The plea in defense does, thereforee, seem to me to raise a triable issue, as indeed this should also be held to be the view of the Court below, for the simple reason that leave has been granted by that Court. In view, however, of the admission in the written statement, this leave should be granted on the condition that the present petitioner furnishes security to the satisfaction of the trial Court in the sum of Rs. 3,000.00. This condition seems to bejust, fair and equitable and Shri Chadha has also agreed to this condition. This security should be furnished within two weeks after the appearance of the parties in the Court below. Costs in this Court would be costs in the cause. Parties are directed to appear in the trial Court on 31-10-1968, which I am told is the date already fixed in that Court.


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