1. This is a civil revision petition filed against the order made by the learned Additional Subordinate Judge of Vijayawada in C. M. P. No. 2071 of 1951 in O. S. No. 129 of 1951.
2. C. M. P. No. 2071 of 1951 was an application made by the defendant under Order 37, Rule 3, Civil Procedure Code, for leave to defend the suit. The learned Subordinate Judge came to the conclusion that the defence was not a bona fide one and therefore gave leave to the defendant to defend on his depositing the suit amount into court and time was given for doing so till 25th September 1951.
3. The contest before me in this civil revision petition is twofold, viz., that first of all, when the learned Subordinate Judge had come to the conclusion that on the defence put forward there was a triable issue he should not have imposed any condition and secondly, that on the facts the defence put forward could not be considered to be lacking in bona fides.
4. POINT 1:--The object of this rule requiring that leave to defend should be obtained in suits under summary procedure is to ensure that in this class of suits the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining a decree early by raising untenable and frivolous defence. But at the same time, it could never have been intended by the Legislature or by Courts that this rule should be so worked as to practically deprive a man of his right of defending a suit in court even when he has a good defence.
5. Therefore we have to steer clear between two extremes, viz., readily giving leave as soon as there is a triable issue whether that issue is either bona fide or untenable, and secondly, practically withholding leave by imposing onerous conditions unless the defendant demonstrates at that stage that the plea raised by him was a cast-iron answer to the claim of plaintiff.
6. On account of this necessity to steer clear between these two extremes the decisions of this court have been veering from one side to the other of course largely dictated by the facts of the cases which were under consideration and can he stated to have obtained a position of equilibrium in the latest Bench decision of this Court in -- 'Kesavan v. South Indian Bank Ltd.', : (1949)2MLJ70 .
7. The earliest Bench decision embodying the view that as soon as a triable issue has been raised by the defendant unconditional leave to defend should be granted is -- 'Periayamiyana Marakayar and Sons v. Subramania Aiyar', 46 M. L. J. 255. This decision was followed in -- 'Sundaram Chettiar v. Valli Ammal', 58 Mad. 116: 68 M. L. J. 16 heardby Sir Owen Beasley C. J. and Mr. Justice King. The Bench held that if a defendant sets up a defence in his affidavit in support of his application for leave to defend which, if he succeeds in proving, entitles Him to succeed in the suit, then the Master or the court before whom the application comes has no discretion whatever in the matter and that unconditional leave to defend should be granted, because a 'triable issue' has been raised by the defendant and it is not open to the Master or anybody else other than the trial Judge to go into the merits and discover whether the defence set up is true or false. In this case, it may be noted that the Master thought that the defence was not bona fide and gave conditional leave to defend, the condition being that the defendant should within a certain time, pay the full amount claimed into court and this decision of the Master was confirmed by Stone J. sitting on the Original Side of the High Court.
The next Bench decision to be considered is -- 'H. M. Ebrahim Sait v. South India Industrials Ltd.', : AIR1938Mad962 . In this decision the learned Judges Madhavan Nair O. C. J. (as he then was) and Krishnaswami Aiyangar J. doubted the correctness of the decision in -- 'Sundaram Chettiar v. Valliammal', 58 Mad 116: 68 M. L. J. 16 and at page 41 of the report there are certain observations of the Hon'ble the Officiating Chief Justice which go to indicate that in order to entitle a defendant to unconditional leave he should satisfy the court not only that there was a triable issue but also that his defence was bona fide. It is interesting to note that one of the parties to this judgment Krishnaswami Aiyangar J. appeared for the appellant in -- 'Sundaram Chettiar v. Valliammal', 68 M. L. J. 16: 58 Mad 116. Therefore it will be seen how prima facie these two decisions represent the two positions on either side. Therefore, when this matter came up for consideration in the latest Bench decision of Satyanarayana Rao and Viswanatha Sastri JJ. in 'Kesavan v. South Indian Bank Ltd. : (1949)2MLJ70 the entire case law was gone into along with the English decisions arising from Order 14, Rule 6 of the Rules of the Supreme Court in England corresponding word for word to Order 7, Rule 6, Original Side Rules of the Madras High Court. The Bench laid down the following proposition:
'The learned Judges when they referred to the triable issue and bona fide defence at p. 41 in -- 'Ebrahim Sait's case', I.L.R. (1939) Mad. 36: : AIR1938Mad962 must have meant by those observations to indicate, that it is not enough to have an issue whatever be its nature and substance but that it should be real and substantial. The defence must raise a plausible case for trial and if established a sufficient answer to the claim. We do not think that the decision in -- 'Ebrahim Sait v. South India Industrials Ltd.', I. L. R. (1939) Mad 36 is intended to lay down a rule which is contrary to the decision of the House of Lords in -- 'Jacobs v. Booth's Distillery Co.', (1902) 85 L. T. 262 and is in conflict with what was laid down in the earlier decisions of this court. On the facts of that case the defence was really not a bona fide one and there was no plausible issue for trial. We think that the only test to be applied is whether the defence raised a real issue and not a sham issue in the sense that if thefacts alleged by the defendant are established there would be plausible defence on those facts.'
These observations, if I may say respectfully, harmonising the apparent conflicts and laying down the true ratio which ought to guide us in granting leave to defend in these classes of cases, are binding on me as the last word on the subject. Therefore, the contention put forward by the learned advocate that the moment he had raised a triable issue unconditional leave should have granted to the defendant is without substance.
8. POINT 2:--The finding of the learned Subordinate Judge in the present case amounts in my opinion to no more than that the defence is a sham one and does not raise a triable issue on the foot of the following reasoning of the learned Subordinate Judge:
'It is alleged in the plaint that Koteswara Rao requested for a loan and the plaintiff refused to advance a loan to him. Then to accommodate Koteswara Rao, the defendant offered to execute the promissory note and took the amount from the plaintiff. As alleged in the plaint Koteswara Rao required the money for the purpose of carrying on business. It is recited in the promissory note that the amount was required for the purpose of tobacco business. From the contentions of both the parties, it is clear that the money was required by Koteswara Rao, that the plaintiff did not agree to take a promissory note from him and that therefore the defendant executed the promissory note to accommodate Koteswara Rao. According to the plaintiff the sum of Rs. 3600/- was advanced in cash and according to the defendant it represents the value of the tobacco crop purchased by Koteswara Rao from the plaintiff. Whatever might be the case, it is clear that the promissory note is supported by consideration. The burden lies very heavy on the defendant to show that the promissory note is not enforceable in law unless the condition disclosed in the written statement filed along with his application for leave is fulfilled. A doubt will arise in the mind of a prudent man why the condition attached to the enforcement of the promissory note has not been reduced to writing. On the same day, the plaintiff took one barn belonging to Koteswara Rao on a rental of Rs. 400/- per year. A document also has been executed in his favour. Koteswara Rao received a sum of Rs. 400/- towards the rent. When the promissory note and rent agreement were executed on the same day, it is significant to note why the condition precedent agreed upon to the enforcement of the promissory note was not reduced to writing. Further, the moment the promissory note was executed in favour of the plaintiff, it must be taken that the purchase money was paid off. It is the tobacco crop that is alleged to have been purchased by Koteswara Rao. It must be taken that he had taken possession of it then and there. It is really doubtful whether the plaintiff undertook to keep watch over the tobacco crop and deliver the same to Koteswara Rao in season.'
I see no reason on the limited records before me and the submissions made at this stage to differ from the learned Subordinate Judge and prima facie I am satisfied that the defence raised by the defendant raises no real issue inthe case as to entitle him to unconditional leave to defend. The decision of the learned Subordinate Judge to impose conditions is correct.
9. The terms however in the circumstances of the case can be properly modified and the modification I make is that the defendant will be granted leave to defend on the defendant depositing in court half the suit amount within six weeks from the date of this order and furnishes security to the satisfaction of the trial court for the other half within the same period and failing which his petition will stand dismissed with costs.
10. This civil revision petition is disposed of accordingly and in view of the partial relief to which the defendant has been found entitled on the facts here, each party will bear its own costs.