Case Note & Summary
The petitioners, defendants in a summary suit filed by the respondent for recovery of Rs.25,40,001/-, challenged the Trial Court's order dated 01/04/2022 granting conditional leave to defend with a deposit of Rs.15,00,000/-, and the order dated 16/12/2022 dismissing their application for modification. The respondent-plaintiff had filed the suit under Order XXXVII CPC based on two dishonoured cheques. The defendants sought leave to defend under Order XXXVII Rule 3(5) CPC. The Trial Court allowed leave but imposed the deposit condition. The defendants failed to deposit and filed a modification application, which was dismissed. The High Court held that while imposing conditions for leave to defend, the court must consider the defendants' financial capacity and whether there are triable issues. The defendants had raised triable issues regarding the transaction, and their financial inability to deposit was not considered. The High Court set aside the condition of deposit and directed the Trial Court to grant unconditional leave to defend, allowing the defendants to contest the suit on merits. The writ petition was allowed, and the impugned orders were quashed to the extent of the deposit condition.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Rule 3(5) CPC - Conditional Leave - The Trial Court granted leave to defend but imposed a condition to deposit Rs.15,00,000/-. The High Court held that while imposing conditions, the court must consider the defendants' financial capacity and whether there are triable issues. The condition was set aside as it was imposed without such consideration. (Paras 7-10)
B) Civil Procedure - Summary Suit - Modification of Order - Order XXXVII CPC - The defendants' application for modification of the deposit condition was dismissed by the Trial Court. The High Court found that the dismissal was not justified as the defendants had shown inability to deposit and had raised triable issues. (Paras 5-6)
C) Civil Procedure - Summary Suit - Triable Issues - Order XXXVII CPC - The defendants raised triable issues regarding the transaction and dishonour of cheques. The High Court noted that the existence of triable issues is a relevant factor for granting unconditional leave to defend. (Paras 8-9)
Issue of Consideration
Whether the Trial Court was justified in imposing a condition of deposit of Rs.15,00,000/- while granting leave to defend in a summary suit under Order XXXVII CPC, without considering the defendants' financial capacity and the existence of triable issues.
Final Decision
The High Court allowed the writ petition, set aside the condition of deposit of Rs.15,00,000/- imposed by the Trial Court, and directed that the defendants be granted unconditional leave to defend the suit. The impugned orders dated 01/04/2022 and 16/12/2022 were quashed to the extent of the deposit condition.
Law Points
- Order XXXVII CPC
- leave to defend
- conditional leave
- triable issues
- financial capacity
- deposit condition
- modification of order
- summary suit
Case Details
2024 LawText (BOM) (03) 153
Writ Petition No.1225/2023
Mr. U.K. Bisen for petitioners, Mr. N.B. Kalwaghe for respondent
Sheikh Kadir Chhaware and Kasmiya Traders
Dattu S/o Tikaram Divtelwar
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Nature of Litigation
Writ petition challenging orders in a summary suit for recovery of money under Order XXXVII CPC.
Remedy Sought
Petitioners (defendants) sought to set aside the condition of deposit of Rs.15,00,000/- imposed while granting leave to defend, and to obtain unconditional leave to defend.
Filing Reason
The Trial Court granted conditional leave to defend requiring deposit of Rs.15,00,000/-, which the defendants could not comply with, and their modification application was dismissed.
Previous Decisions
Trial Court order dated 01/04/2022 granting conditional leave to defend with deposit condition; order dated 19/07/2022 dismissing modification application; order dated 16/12/2022 dismissing another application (Exh.38).
Issues
Whether the Trial Court was justified in imposing a condition of deposit of Rs.15,00,000/- while granting leave to defend under Order XXXVII CPC.
Whether the Trial Court erred in dismissing the defendants' application for modification of the deposit condition.
Submissions/Arguments
Petitioners argued that the Trial Court did not consider their financial capacity or the existence of triable issues before imposing the deposit condition.
Respondent argued that the condition was justified as the suit was for a large amount and the cheques were dishonoured.
Ratio Decidendi
In summary suits under Order XXXVII CPC, while granting leave to defend, the court must consider the defendants' financial capacity and the existence of triable issues before imposing a condition of deposit. Imposing a heavy deposit without such consideration is unsustainable.
Judgment Excerpts
The learned Trial Court allowed such application filed by the petitioners separately but by common order dated 01/04/2022 while granting leave to defend the suit, the learned Trial Court directed the defendants to deposit an amount of Rs.15,00,000/- in the Court within a period of one month, failing which the suit was directed to be proceeded further.
It is an admitted fact that the defendants failed to deposit such amount, however, both the defendants filed another application dated 30/04/2022 for modification of the said order.
The High Court held that while imposing conditions for leave to defend, the court must consider the defendants' financial capacity and whether there are triable issues.
Procedural History
The respondent-plaintiff filed a summary suit under Order XXXVII CPC for recovery of Rs.25,40,001/-. The petitioners-defendants applied for leave to defend. The Trial Court granted conditional leave on 01/04/2022 requiring deposit of Rs.15,00,000/-. The defendants failed to deposit and filed a modification application on 30/04/2022, which was dismissed on 19/07/2022. Another application (Exh.38) was dismissed on 16/12/2022. The defendants then filed the present writ petition.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXXVII Rule 1(1), Order XXXVII Rule 3(5)
