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V. Kamalanathan Vs. E.i.D. Parry Limited - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1978)1MLJ25
AppellantV. Kamalanathan
RespondentE.i.D. Parry Limited
Cases ReferredIn Smt. Kiranmayee Dassi v. Dr. J. Chatterjee
Excerpt:
- .....thereby implying that there may be circumstances under which, even if there is a triable issue, leave should not be granted unconditionally. stated as a general proposition of law, no exception can be taken to the same. but, as cautioned by the supreme court, in exercising the discretion, care must be taken to see that real and genuine triable issues are not shut out by unduly severe orders as to deposit. in this case the learned judge, after having come to the conclusion that there was a triable issue, if he wanted to impose any condition, he should have given reasons as to why he was imposing the condition, notwithstanding his conclusion that the controversy gave rise to a triable issue. there is no finding that the defence was sham or not genuine. under these circumstances,.....
Judgment:
ORDER

M.M. Ismail, J.

1. The defendant in O.S. No. 8890 of 1974 on the file of the City Civil Court, Madras, is the petitioner herein. He seeks to have the order of the II Assistant Judge, City Civil Court, Madras, dated 9th December, 1975, imposing a condition of deposit of Rs. 10,000 on or before 16th January, 1976 for granting him leave to defend the suit, revised. The suit itself was one for recovery of a sum of money due on a promissory note. One of the defences of the petitioner herein was that the promissory note was obtained under coercion, compulsion and undue influence by one Kalyanaraman. The learned II Assistant Judge has discussed this aspect of the matter in paragraph 12 of his order and, after referring to the contentions of the parties, stated towards the end of the paragraph:

But suffice to say that there is a triable issue, whether the suit promissory note was got under coercion and compulsion and undue influence of Kalyanaraman.

Notwithstanding this conclusion, in paragraph 13 of the order the learned II Assistant Judge states:

However, it is not a case in which unconditional leave can be granted. The petition will be allowed and leave will be granted to file the written statement and defend the suit on condition the petitioner deposits into Court Rs. 10,000 on or before 16th January, 1976 failing which this petition will stand dismissed. Call on 17th January, 1976.

2. Thus it will be seen that, having recorded his conclusion that there was a triable issue whether the suit promissory note was got under coercion, compulsion and undue influence of Kalyanaraman, the learned Judge has not given any reason as to why he was not giving unconditional leave to defend. learned Counsel for the petitioner contends that, once the Court has come to the conclusion that the controversy gives rise to a triable issue, then ordinarily the Court should grant unconditional leave to defend, that this is not a case in which the Court was justified in imposing the condition and that the Court itself has not given any reason why it was imposing the condition. On the other hand, learned Counsel for the respondent contends that the Court must read the entire paragraph 12 of the order of the learned Judge, and even read between the lines, for finding out why the Court imposed the condition. Even after reading the entire paragraph 12, I am unable to discover or discern any reason why the learned Judge imposed the condition. In Milkhiram (India), Private Limited and Ors. v. Chamanlal Brothers : AIR1965SC1698 , the Supreme Court has laid down:

It is indeed not easy to say in many cases whether the defence is a genuine one or not and, therefore, it should be left to the discretion of the trial Judge who has experience of such matters both at the bar and the Bench to form his own tentative conclusion about the quality or nature of the defence and determine the conditions upon which leave to defend may be granted. If the Judge is of opinion that the case raises a triable issue, then leave should ordinarily be granted unconditionally. On the other hand, if he is of opinion that the defence raised is frivolous or false or sham, he should refuse leave to defend altogether. Unfortunately, however, the majority of cases cannot be dealt with in a clear-cut way like this and the Judge may entertain a genuine doubt on the question as to whether the defence is genuine or sham or in other words whether it raises a triable issue or not. It is to meet such cases that the amendment to Order 37, Rule 2, made by the Bombay High Court contemplates that even in cases where an apparently triable issue is raised the Judge may impose conditions in granting leave to defend. Thus this is a matter in the discretion of the trial Judge and in dealing with it he ought to exercise his discretion judiciously. Care must be taken to see that the object of the rule to assist the expeditious disposal of commercial causes to which the order applies, is not defeated. Care must also be taken to see that real and genuine triable issues are not shut out by unduly severe orders as to deposit. In a matter of this kind, it would be undesirable and inexpedient to lay down any rule or general application.

3. Relying on this passage, learned Counsel for the respondent contends that, notwithstanding the conclusion of the learned Judge that there was a triable issue, still he had a discretion to impose the condition, because the Supreme Court itself has laid down that leave must be granted unconditionally only ordinarily, thereby implying that there may be circumstances under which, even if there is a triable issue, leave should not be granted unconditionally. Stated as a general proposition of law, no exception can be taken to the same. But, as cautioned by the Supreme Court, in exercising the discretion, care must be taken to see that real and genuine triable issues are not shut out by unduly severe orders as to deposit. In this case the learned Judge, after having come to the conclusion that there was a triable issue, if he wanted to impose any condition, he should have given reasons as to why he was imposing the condition, notwithstanding his conclusion that the controversy gave rise to a triable issue. There is no finding that the defence was sham or not genuine. Under these circumstances, the learned Judge was obviously not justified in imposing the condition.

4. The Supreme Court itself in a subsequent decision has explained the circumstances under which conditions can be imposed. In Machelec Engineers and Manufacturers v. M/s. Basic Equipment Corporation : [1977]1SCR1060 , the Supreme Court referred to a decision of the Calcutta High Court with approval and observed as follows:

5. In Smt. Kiranmayee Dassi v. Dr. J. Chatterjee (1945) 49 Cal.W.N.246, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 37, Civil Procedure Code in the form of the following propositions (at p. 253):

(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits, the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.

(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence, the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.

(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he had a defence, yet shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend, but in such a case the Court may in its discretion impose conditions as to the time or mode of trial, but not as to payment into Court or furnishing security.

(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine, then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.

(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine, then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed, if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition and thereby show mercy to the defendant by enabling him to try to prove a defence.

6. The case before us certainly does not fall within the class (e) set out above. It is only in that class of cases that an imposition of the condition to deposit an amount in Court before proceeding further justifiable.

Thus it will be clear that, in the opinion of the Supreme Court, the only cases in which the defendant can be asked to deposit money into Court as a condition for the grant of leave to defend are those covered by Clause (e) in paragraph 8 extracted above, namely, where the defendant has no defence or the defence is illusory or sham or practically moonshine. That not being the case in the instant case, the learned Judge was not at all justified in imposing a condition by way of deposit of a sum of Rs. 10,000 into Court on or before 16th January, 1976. Consequently the civil revision petition is allowed, the condition imposed by the learned Judge is set aside, and the petitioner herein is granted unconditional leave to defend. There will be no order as to costs.


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