Dalip K. Kapur J.
(1) This is a revision against an order passed by the Subordinate Judge in a suit based on a Hundi for the recovery of 3,600.00, which was brought under the provisions of Order 37 of the Code of Civil Procedure. The impugned order gave the defendants leave to defend the suit on furnishing security for an amount of Rs. 4,000.00 which had to be furnished by 2nd February, 1972. The order in question gave leave to defend because execution of the Hundi as well as receipt of consideration was denied. The suit was also claimed to be barred by time. The Subordinate Judge has given no reasons why the defendants have been called upon to furnish security.
(2) It is well-settled that leave to defend may be given either conditionally or unconditionally. If a triable issue is disclosed, then the Court has discretion to give leave either conditionally or unconditionally. If conditional leave is given some Explanationn must be forthcoming as to why conditions have been imposed. The order In question unfortunately does not disclose any reasons why the defendants have been called upon to furnish security. The defendants have come in revision before this Court on the ground that they are unable to furnish security, and, thereforee, the order in question is tentamount to a decree.
(3) Mr. Chugh, learned counsel for the respondent has cited some authorities in which no reasons were given in ordering that the defendant should get conditional leave to defend and he submits that the subordinate Judge's decision is not rendered invalid or without jurisdiction merely because he has given no reasons in support of the order imposing conditions. Counsel has first cited United Industries v. M/s Dalwadi & Co In that case the leave to defend the suit was granted to the defendant on condition that he deposited Rs. 4,000.00. The suit in question was for the recovery of the price of bricks and leave to defend had been sought under the amended rules of the Civil Procedure Code applicable at Ahmedabad. One of the points raised before the Bench was the question whether Order 37 had been properly amended and the second point was that the trial court had not given an) reasons for imposing conditions. The Bench held that this matter was concluded by previous decisions of the Gujarat High Court which stated that it was not necessary to give reasons for imposing conditions. The basis of the previous judgment of that High Court relied upon by the Bench was that there was nothing in the Code which rendered it necessary for the Court to give a judgment while deciding whether to give leave to defend conditionally or unconditionally. I regret that I am unable to follow this judgment because the practice as far as the Courts in this part of the country are concerned is that reasons must be given. The amended provisions of Order 37 of the Code are not applicable to Delhi and the decision,of the present case is covered by the decision in Santosh Kumar v. Bhai Mool Chand, where their Lordships indicated that conditions cannot be imposed if a good and valid defense is disclosed by the affidavit supporting the application for leave to defend. Their Lordships indicated that the le at position would be as follows :-
'ALL that we need say about them is that if the Court is of opinion that the defense is not bona fide, then it can impose conditions and is not tied down to refusing leave to defend. We agree with Varadachariar, J., in the Madras case that the Court has this third course open to it in a suitable case. But it cannot reach the conclusion that the defense is not bona fide arbitrarily. It is as much hound by judicial rules and judicial procedure in reaching a conclusion of this kind as in any other matter. It is unnecessary to examine the facts of those cases because they are not in appeal before us. We are only concerned with the principles. '
It would follow from these observations of the Supreme Court that the Court when exercising discretion to grant leave conditionally or unconditionally has to support its conclusion by indicating the reason why judicial discretion is being exercised in a particular manner. I, thereforee, hold that the absence of reasons is a ground for interfering with the order, but in casa I hold that the order is otherwise justifiable because of the facts of the case, then I can refuse to interfere in revision with the order in question.
(4) The next judgment cited by the learned counsel for the respondent is Milkhiram (India) Private Ltd. v. Chamanlal Bros. In that case leave to defend had been given on the condition that the defendants deposited security to the extent of Rs. 70,000.00. The order was passed on the Original Side of the High Court of Bombay. No reasons were given in the order passed by the High Court. The Supreme Court was referred to a decision of the Bombay High Court holding that the city Civil Court had to give reasons for imposing conditions. The Bombay judgment in question being Waman Vasudea Wagh v. M/S Pratapmal Dipaji and Co. The Supreme Court observed as follows ;-
'IT was urged before the High Court that where a subordinate court makes an order which is open to appeal or revision it should give some reasons in support of that order. No reasons having been given the order was set aside and the matter was remitted to the City Civil Court for passing a fresh order in accordance with law. While laying down the normal rule it does not appear to have been intended to make it inflexible. Nor again it appears to have been contemplated that elaborate reasons to support the imposition of conditions must be given. In the case before us the order made is by the High Court itself and not by the subordinate court. No doubt an appeal lay against it under the Letters Patent but that is merely an internal appeal in a High Court which cannot be likened to an appeal under Section 96 or a revision application under Section 115 of the Code. Moreover, Order 49, Rule 3, sub-rule (5) provides that nothing contained in Rules I to 8 of Order 20 will apply to any Chartered High Court in exercise of its ordinary or extraordinary civil jurisdiction. The provision relating to the giving of reasons in support of a decision are to be found in Rule 4 of Order 20.'
Thus, the Supreme Court rejected the contention not on the ground that reasons were unnecessary but because the Bombay High Court was not bound to give reasons being a Chartered High Court. The present being a case decided by a Subordinate Judge is riot covered at all by this judgment. I, thereforee, hold that the Subordinate Judge was wrong in giving no reasons for imposing conditions.
(5) I have myself considered the question whether there were any grounds to impose conditions the the circumstances of this case I confess that. it is a matter of discretion and has to be ascertained by the Judge trying the case and, thereforee, I feel it will be wrong for me to express any opinion which I might have formed in examining the application for leave to defend.
(6) In the cirsumstanees, I follow the conclusions of the Supreme Court based on the Bombay Judgment referred to above and set aside the order of the Subordinate Judge and direct him to pass an order in accordance with law, which means that he must either give leave to defend conditionally or unconditionally and if he decides to impose conditions he must give reasons in support of such a conclusion. This Revision thereforee succeeds-and the order granting leave to defend conditionally is set aside and the Subordinate Judge is directed to pass an order afresh granting leave either conditionally or unconditionally in the light of the observations above. The petitioners will get their costs. Counsel's fee Rs. 50.00