Case Note & Summary
The petitioners, Sanjay Mahadeoprasad Trivedi and Sneha Sanjay Trivedi, filed a writ petition under Article 227 of the Constitution of India challenging an order dated 15.03.2021 passed by the trial Court in Summary Suit No.476 of 2018. The trial court had granted conditional leave to defend under Order XXXVII Rule 3 of the Code of Civil Procedure, 1908, requiring the petitioners to deposit 50% of the total claim amount within three months. The background facts reveal that the petitioners booked a rowhouse in Sahara Prime City project in 2007 for Rs.56,30,000/- and paid Rs.22,69,330/-. For the balance, they applied for a loan of Rs.35,00,000/- from HDFC Bank (respondent), which had a tie-up with the builder. The bank disbursed Rs.24,66,529/- directly to the builder on 25.01.2012 based on a demand note. The project collapsed, and the petitioners paid EMIs for over three years totaling Rs.8,31,000/-. They filed a consumer complaint in 2015. The bank declared the account NPA in 2016 and initiated SARFAESI proceedings. The bank then filed a summary suit for recovery. The petitioners sought leave to defend, which was granted conditionally. The High Court considered the main controversy: whether the petitioners, having raised a triable issue, were entitled to unconditional leave to defend. The court noted that the trial court itself inferred a triable issue, yet imposed a deposit condition. The High Court held that once a triable issue is found, leave to defend must be unconditional. The condition of depositing 50% was set aside, and the petitioners were granted unconditional leave to defend. The petition was allowed, and the trial court was directed to proceed with the suit.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Rule 3 of Code of Civil Procedure, 1908 - Conditional Leave - The trial court granted conditional leave to defend on condition of depositing 50% of the claim amount despite finding that the petitioners had raised triable issues. The High Court held that once a triable issue is found, leave to defend must be unconditional, and the condition of deposit was unwarranted. (Paras 2-6) B) Civil Procedure - Summary Suit - Triable Issue - Order XXXVII Rule 3 of Code of Civil Procedure, 1908 - Unconditional Leave - The petitioners contended that the loan was disbursed directly to the builder due to a tie-up, and the project collapsed, raising a triable issue regarding liability. The High Court accepted that the facts disclosed a triable issue and set aside the condition, granting unconditional leave to defend. (Paras 3-6)
Issue of Consideration
Whether in the wake of an inference of the trial Court that the petitioners having made out a triable issue are entitled for an unconditional leave to defend.
Final Decision
The petition is allowed. The impugned order dated 15.03.2021 passed by the trial Court below application at Exhibit 15 is set aside. The petitioners are granted unconditional leave to defend the summary suit. The trial court is directed to proceed with the suit in accordance with law. Rule is made absolute in those terms.
Law Points
- Order XXXVII Rule 3 CPC
- conditional leave to defend
- triable issue
- unconditional leave
- summary suit
- Article 227 of Constitution of India
