Case Note & Summary
The dispute arose from a summary suit filed by the respondent against the appellants based on four dishonored cheques issued by the second appellant. The learned Single Judge of the Delhi High Court denied the appellants' application for leave to defend, labeling their defence as sham and moonshine, and awarded the respondent a decree for Rs.39,30,856/- with interest. The appellants challenged this decision, arguing that their defence was valid and that the learned Single Judge had erred in dismissing their application. The High Court, while granting conditional leave to defend, directed the appellants to deposit the decreed amount to protect the plaintiff's interests, stating that the defence raised lacked substantial merit. The court noted that if the appellants failed to deposit the amount, the Single Judge's order would become operative. The Supreme Court upheld the High Court's decision, reiterating the principles regarding leave to defend in summary suits and emphasizing the need for a deposit when the defence is not sufficiently robust. The court directed the appellants to deposit Rs.20,00,000/- within three months, failing which the earlier order would stand. The appeal was disposed of without costs.
Headnote
A) Civil Procedure - Summary Suit - Conditional Leave to Defend - Code of Civil Procedure, 1908, Order XXXVII Rule 1 - The court granted conditional leave to defend after determining that the defence raised was not substantial and required a deposit to protect the plaintiff's interests. The court emphasized that if the defence is sham or moonshine, conditions may be imposed for leave to defend (Paras 1-3).
Issue of Consideration
Whether the appellants were entitled to unconditional leave to defend the summary suit and the conditions for such leave.
Final Decision
The Supreme Court upheld the High Court's conditional leave to defend, directing the appellants to deposit Rs.20,00,000/- within three months, failing which the earlier order would become operative.
Law Points
- Conditional leave to defend
- summary suit
- moonshine defence
- deposit of amount
- negotiable instruments
- triable issues
