C.R. No. 5995 of 2007 Present: Mr. G.L.Bajaj, Advocate for the petitioner. *** Petitioner is aggrieved against an order where leave to defend on furnishing surety bonds to the tune of Rs. 2 lacs has been granted to the petitioner simply on the statement made by counsel for the plaintiff- respondent that the defendant-petitioner be granted leave to defend on furnishing surety. The position of law has been well explained by the Hon'ble Supreme Court in Santosh Kumar V. Mool Singh, AIR 1958 SC 321, Milkiram (India) Private Ltd. V. Chaman Lal Bros., AIR 1958 SC 1698 and in M/s Mechalec Engineers and Manufactures Vs. M/s Basic Equipment Corporation, AIR 1977 SC 577. These are recently reiterated in M/s Sunil Enterprises and another V. SBI Commercial and International Bank Ltd., AIR 1998 Supreme Court 2317 and are as under:- “ (a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. (b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend. ( c ) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and C.R. No. 5995 of 2007 -2- immediately make it clear that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security. (d ) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. ( e ) If the defendant has no defence or the defence is ilusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sigh judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence.” Accordingly, the impugned order cannot be sustained. The Court has to apply its mind to see if the petitioner is required to be granted leave to defend and in case it is to be so granted, then whether it should be C.R. No. 5995 of 2007 -3- conditional or without condition. Let the matter go back to the trial Court which shall reconsider the same in the light of the law laid down by the Supreme Court in M/s Mechalec Engineers and Manufactures's case (supra). Parties through their counsel are directed to appear before the trial Court on July 7, 2008. The trial Court will then pass fresh order in accordance with law. (RANJIT SINGH) JUDGE May 23, 2008 sunita