Case Note & Summary
The judgment concerns two writ petitions arising from a summary suit for recovery of Rs. 38,89,674.14 filed by the plaintiff (M/s. Parijat Enterprises) against the defendant (M/s. Bhushan Steel Limited) for unpaid dues on supply of Magnetite Powder. The trial court granted conditional leave to defend under Order 37 Rule 3(5) CPC, requiring the defendant to deposit Rs. 34,24,895/- or furnish a bank guarantee. The plaintiff challenged the grant of leave, while the defendant challenged the condition. The High Court upheld the trial court's order, finding that the defendant had raised triable issues but the defence was not entirely bona fide, thus justifying the condition. The court emphasized that in summary suits, leave to defend should be granted if there is a triable issue, but conditions may be imposed to protect the plaintiff's interest.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 Rule 3(5) CPC - Conditional Leave - The trial court granted leave to defend subject to deposit of Rs. 34,24,895/- or furnishing bank guarantee. The High Court upheld the order, finding that triable issues existed but the defendant's defence was not wholly bona fide, warranting security. (Paras 3-5)
Issue of Consideration
Whether the trial court was justified in granting conditional leave to defend under Order 37 Rule 3(5) CPC, and whether the conditions imposed were proper.
Final Decision
Both writ petitions dismissed; order of trial court dated 30.09.2010 granting conditional leave to defend upheld.
Law Points
- Order 37 Rule 3(5) CPC
- Leave to Defend
- Summary Suit
- Triable Issues
- Conditional Leave
Case Details
2011 LawText (BOM) (01) 87
Writ Petition Nos. 5664 & 5364 of 2010
Mr. S. Dewani for Petitioner (in WP 5664/2010) and for Respondent No.1 (in WP 5364/2010); Mr. Ajay Maheshwari, Power of Attorney Holder for Respondent (in WP 5664/2010) and for Petitioner (in WP 5364/2010)
M/s. Bhushan Steel Limited (in WP 5664/2010) and Mrs. Varsha A. Maheshwari (in WP 5364/2010)
Mrs. Varsha A. Maheshwari (in WP 5664/2010) and M/s. Bhushan Steel Limited & Anr. (in WP 5364/2010)
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Nature of Litigation
Summary suit for recovery of money on account of supply of Magnetite Powder.
Remedy Sought
Plaintiff sought decree for Rs. 38,89,674.14 with interest; defendant sought unconditional leave to defend.
Filing Reason
Non-payment for goods supplied under purchase orders.
Previous Decisions
Trial court granted conditional leave to defend vide order dated 30.09.2010.
Issues
Whether the trial court was correct in granting conditional leave to defend under Order 37 Rule 3(5) CPC.
Whether the condition of deposit of Rs. 34,24,895/- or furnishing bank guarantee was proper.
Submissions/Arguments
Plaintiff argued that no triable issues existed and decree should have been passed.
Defendant argued that unconditional leave should have been granted as there were triable issues.
Ratio Decidendi
In summary suits under Order 37 CPC, leave to defend should be granted if the defendant raises a triable issue. However, if the defence is not wholly bona fide, the court may impose conditions such as deposit or security to safeguard the plaintiff's interest.
Judgment Excerpts
By the impugned order passed below Exh.16 the trial Court has granted leave to defend under Subrule [5] of Rule 3 of Order 37 of Code of Civil Procedure, subject to defendants depositing a sum of Rs. 34,24,895/ in Court or then furnishing a bank guarantee for that sum within a period of one month.
Procedural History
The plaintiff filed Summary Suit No.70/2009 for recovery of Rs. 38,89,674.14. The defendant applied for leave to defend (Exh.16). The trial court granted conditional leave on 30.09.2010. Both parties filed writ petitions challenging the order.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order 37 Rule 3(5)
