Case Note & Summary
The case involved a civil appeal arising from a judgment of the High Court of Judicature at Bombay concerning a suit for recovery of Rs. 2,66,39,028/- filed by the respondent against the appellants, M/s Fixity Packaging Industries Pvt. Ltd. and others, due to dishonoured cheques. The appellants sought leave to defend the suit, which was initially denied by the trial court on the grounds that they had no defence. The trial judge found that the appellants had made categorical admissions regarding their indebtedness and that the defence raised was sham. However, the trial judge granted conditional leave to defend, requiring the appellants to deposit Rs. 2,00,00,000/- within two months. The appellants challenged this order in the High Court, arguing that the conditions imposed were unreasonable. The High Court upheld the trial court's decision, leading to the present appeal. The Supreme Court, while acknowledging the lack of a plausible defence, modified the conditions for leave to defend, reducing the deposit amount to Rs. 1,10,00,000/- and requiring an additional Rs. 90,00,000/- to be deposited for the benefit of the successful party. The court emphasized that conditions for leave to defend should not be excessively burdensome and should allow the defendants a fair opportunity to present their case. The appeal was disposed of with no order as to costs.
Headnote
A) Civil Procedure - Leave to Defend - Conditional Leave - Code of Civil Procedure, 1908, Order XXXVII - The court modified the High Court's order, allowing conditional leave to defend upon depositing a reduced amount, emphasizing that conditions should not be unduly onerous. The court found that the appellants had no plausible defence but granted them an opportunity to defend by adjusting the deposit requirement (Paras 1-2).
Issue of Consideration
Whether the appellants were entitled to unconditional leave to defend the suit under Order XXXVII of the Code of Civil Procedure, 1908.
Final Decision
The Supreme Court modified the High Court's order, allowing conditional leave to defend upon depositing Rs. 1,10,00,000/- and an additional Rs. 90,00,000/- for the benefit of the successful party, emphasizing that conditions should not be excessively burdensome.
Law Points
- Leave to defend
- summary suit
- conditional leave
- dishonoured cheques
- Order XXXVII CPC
