Case Note & Summary
The case involves a Civil Revision Application filed by ICICI Bank Limited (the applicant/original defendant No.1) against the order dated 30th June 2015 passed by the learned Joint Civil Judge, Senior Division, Nashik, in Summary Suit No. 5 of 2014. The respondent No.1, Anil Printers Limited (original plaintiff), had filed the summary suit against the applicant and respondent No.2 (Selp India Private Limited, original defendant No.2) seeking recovery of Rs. 1,01,00,000/- with interest. The plaintiff alleged that it had purchased certain printing machinery from respondent No.2 and had taken a loan from the applicant bank, creating an equitable mortgage of the machinery. The plaintiff claimed that the machinery was stored in a godown and that the applicant bank, as mortgagee in possession, was responsible for its safety. The plaintiff alleged that the machinery was lost due to the negligence of the defendants. The applicant bank filed an application for leave to defend under Order 37 Rule 3 of the Code of Civil Procedure, 1908, which was rejected by the Trial Court. The applicant bank then filed the present revision. The High Court considered the submissions of the parties and examined the principles for granting leave to defend in summary suits. The court held that the applicant bank had raised triable issues, including whether the bank was liable as mortgagee in possession, whether the plaintiff had suffered any loss, and whether the bank had acted negligently. The court set aside the Trial Court's order and granted leave to defend on condition that the applicant bank deposits Rs. 25 lakhs within four weeks. The court clarified that the deposit would be subject to the outcome of the suit and that the Trial Court would decide the suit on its own merits without being influenced by the deposit.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 Rule 3 CPC - Triable Issues - The court considered whether the defendant bank, as mortgagee in possession, had raised triable issues regarding its liability for loss of goods and whether the plaintiff had made out a case for summary judgment. Held that the defendant had raised triable issues including whether the bank was liable as mortgagee in possession, whether the plaintiff had suffered loss, and whether the bank had acted negligently. The court set aside the order rejecting leave to defend and granted leave on condition of depositing Rs. 25 lakhs within four weeks. (Paras 1-20) B) Civil Procedure - Summary Suit - Conditional Leave to Defend - Order 37 Rule 3 CPC - The court examined the principles for granting conditional leave to defend, including that if the court is of the opinion that the defendant has a fair chance to defend, leave should be granted unconditionally, but if the defence is plausible but not certain, leave may be granted on conditions. Held that the defendant had raised triable issues but the defence was not so strong as to warrant unconditional leave, and therefore conditional leave was appropriate. (Paras 15-20)
Issue of Consideration
Whether the Trial Court was justified in rejecting the Applicant's (ICICI Bank) application for leave to defend in a summary suit under Order 37 of the Code of Civil Procedure, 1908, and whether the Applicant has raised triable issues entitling it to unconditional leave to defend.
Final Decision
The High Court allowed the Civil Revision Application, set aside the order dated 30th June 2015 passed by the learned Joint Civil Judge, Senior Division, Nashik, and granted leave to defend to the applicant on condition that the applicant deposits Rs. 25 lakhs within four weeks from the date of the order. The deposit is subject to the outcome of the suit, and the Trial Court is to decide the suit on its own merits without being influenced by the deposit.
Law Points
- Summary suit
- leave to defend
- triable issues
- Order 37 CPC
- mortgagee in possession
- liability of bank
- condition for deposit
