Case Note & Summary
The appeal arose from a decision of the Division Bench of the High Court of Bombay, which set aside a conditional leave to defend granted by a Single Judge to the respondent in a summary suit filed by the appellant. The appellant, Sify Ltd., provided IT services to the respondent, First Flight Couriers Ltd., which allegedly defaulted on payments for these services. The appellant filed a summary suit seeking recovery of Rs. 25,73,793/- along with interest. The Single Judge granted conditional leave to the respondent to defend the suit upon depositing Rs. 15 lacs, which the respondent complied with. However, the Division Bench allowed the respondent's appeal, granting unconditional leave to defend. The Supreme Court examined whether the Division Bench was justified in its decision. It noted that the Single Judge had found no material evidence of deficiency in service and that the respondent's claims were not substantiated. The court emphasized that the discretion to impose conditions for leave to defend lies with the court, and the Division Bench failed to consider the materials presented. Ultimately, the Supreme Court restored the Single Judge's order, requiring the respondent to deposit the amount to maintain its defense, and granted two months for compliance, failing which the leave would be refused. The appeal was allowed, and no costs were awarded.
Headnote
A) Civil Procedure - Conditional Leave to Defend - Discretion of Court - Code of Civil Procedure, 1908, Order 37 Rule 3(5) - The court held that the learned Single Judge's order granting conditional leave to defend was discretionary and justified based on the circumstances of the case, and the Division Bench's interference was unwarranted. (Paras 9-10).
Issue of Consideration
Whether the respondent was entitled to an unconditional leave to defend the suit as directed by the Division Bench of the High Court of Bombay.
Final Decision
The Supreme Court set aside the order of the Division Bench and restored the order of the learned Single Judge, granting conditional leave to defend upon deposit of Rs. 15 lacs, allowing two months for compliance.
Law Points
- Conditional leave to defend
- summary suit
- discretion of court
- deficiency of service
- compliance with court orders
