Case Note & Summary
The case involves two petitions arising from an order dated 30.03.2013 passed by the XXVII Additional City Civil Judge, Bangalore, in O.S.No.8306/2012. The plaintiff, Bangalore International Airport Limited, filed a summary suit under Order 37 CPC against the defendant, United Breweries (Holdings) Limited, for recovery of a sum of money. The defendant filed an application under Order 37 Rule 3(5) read with Section 151 CPC seeking leave to defend the suit. The trial court partly allowed the application and granted leave to defend conditionally, directing the defendant to deposit 50% of the suit claim, i.e., Rs. 7,00,00,000/-, together with interest at 8% per annum from the date of suit, in any nationalized or scheduled bank. Both parties challenged this order: the defendant filed W.P.No.19524/2013 under Articles 226 and 227 of the Constitution seeking quashing of the condition, while the plaintiff filed C.R.P.No.193/2013 under Section 115 CPC challenging the grant of leave to defend itself. The High Court heard both petitions together. The court examined the scope of Order 37 Rule 3(5) CPC, which allows the court to grant leave to defend unconditionally or on such terms as it thinks fit. The court noted that the defendant had not raised any substantial defence or triable issue, and the suit was based on a written agreement. The court held that the trial court had exercised its discretion judiciously and the condition imposed was reasonable, as it balanced the interests of both parties. The court further held that the inherent powers under Section 151 CPC could be invoked to impose such conditions. Consequently, the High Court dismissed both petitions, upholding the trial court's order.
Headnote
A) Civil Procedure - Summary Suit - Order 37 Rule 3(5) CPC - Conditional Leave to Defend - The trial court granted leave to defend subject to deposit of 50% of the suit claim with interest. The High Court held that the condition was reasonable and within the court's discretion, as the defendant had not shown a substantial defence or triable issue. The court must balance the interests of both parties and ensure that the condition is not arbitrary or excessive. (Paras 1-10)
B) Civil Procedure - Inherent Powers - Section 151 CPC - The trial court invoked Section 151 CPC along with Order 37 Rule 3(5) CPC to impose the condition. The High Court upheld this, noting that the inherent powers can be used to secure the ends of justice, especially in summary suits where the plaintiff's claim is prima facie valid. (Paras 3-8)
Issue of Consideration
Whether the trial court was justified in imposing a condition of depositing 50% of the suit claim with interest as a condition precedent for granting leave to defend in a summary suit under Order 37 CPC.
Final Decision
Both petitions are dismissed. The order dated 30.03.2013 passed by the XXVII Additional City Civil Judge, Bangalore, in O.S.No.8306/2012 is upheld. The defendant is directed to comply with the condition of depositing 50% of the suit claim with interest within a period of four weeks from the date of the order.
Law Points
- Order 37 Rule 3(5) CPC
- Section 151 CPC
- conditional leave to defend
- summary suit
- discretion of court
- reasonableness of condition
- deposit of part of claim
Case Details
2014 LawText (KAR) (10) 7
Writ Petition No.19524/2013 (GM-CPC) and C.R.P.No.193/2013
Sri D.L.N. Rao, Sr. Counsel and Sri Ajith A. Shetty, Advocate for petitioner in W.P.; Sri Sajjan Poovayya, Sr. Counsel and Ms. Hema Lawrence, Advocate for respondent in W.P. and petitioner in C.R.P.
United Breweries (Holdings) Limited (in W.P.No.19524/2013) and Bangalore International Airport Limited (in C.R.P.No.193/2013)
Bangalore International Airport Limited (in W.P.No.19524/2013) and United Breweries (Holdings) Limited (in C.R.P.No.193/2013)
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Nature of Litigation
Civil revision and writ petition challenging an order granting conditional leave to defend in a summary suit under Order 37 CPC.
Remedy Sought
Defendant sought quashing of the condition to deposit 50% of suit claim; plaintiff sought setting aside of the grant of leave to defend.
Filing Reason
The trial court imposed a condition of depositing 50% of the suit claim with interest as a condition for granting leave to defend, which both parties found objectionable.
Previous Decisions
The trial court partly allowed I.A.No.1 filed by defendant under Order 37 Rule 3(5) read with Section 151 CPC, granting conditional leave to defend.
Issues
Whether the trial court was justified in imposing a condition of depositing 50% of the suit claim with interest as a condition for granting leave to defend.
Whether the trial court could invoke Section 151 CPC along with Order 37 Rule 3(5) CPC to impose such a condition.
Submissions/Arguments
Defendant argued that the condition was arbitrary and excessive, and that the court should have granted unconditional leave to defend as there were triable issues.
Plaintiff argued that the trial court ought to have refused leave to defend altogether, as the defendant had no substantial defence, and the condition was too lenient.
Ratio Decidendi
In a summary suit under Order 37 CPC, the court has discretion to grant leave to defend unconditionally or on such terms as it thinks fit. The condition imposed must be reasonable and proportionate, balancing the interests of both parties. The court can invoke Section 151 CPC to impose conditions to secure the ends of justice. The trial court's order imposing deposit of 50% of the suit claim with interest was not arbitrary and was within its discretion.
Judgment Excerpts
Order dated 30.03.2013 passed by 27th Addl.City Civil Judge, Bangalore in O.S.No.8306/2012 partly allowing I.A.I filed by defendant under Order 37 Rule 3(5) read with Section 151 CPC and granting leave to defendant to defend the suit conditionally on depositing 50% of the suit claim in any nationalized or Scheduled Bank together with interest @ 8% p.a. from the date of suit has been questioned by the defendant as well as plaintiff.
Procedural History
The plaintiff filed a summary suit O.S.No.8306/2012 before the XXVII Additional City Civil Judge, Bangalore. The defendant filed I.A.No.1 under Order 37 Rule 3(5) read with Section 151 CPC seeking leave to defend. The trial court partly allowed the application on 30.03.2013, granting conditional leave to defend. Both parties challenged this order: the defendant filed W.P.No.19524/2013 under Articles 226 and 227 of the Constitution, and the plaintiff filed C.R.P.No.193/2013 under Section 115 CPC. The High Court heard both petitions together and dismissed them on 10.10.2014.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order 37 Rule 3(5), Section 151
