79 RSeAa Noe 3216 of2007 Ill IA1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSANo3216of2007 Date ofDecision December21 2009 GurdarshanLal Malhotra 1 Appellant 0 Vs C0 I Kashmir Singh C0 Z CORAM HONBLE MR JUSTICE MM BEDI Cs Presentl Mr SC KhungerAdvocate 08 for theappellant MrC Arora Advocate for the 7 Z r MMS BEDI Je Defendant haspreferred this appealagainstthejudginents and decreespassedby the Courts below in favour ofthe plaintif respondent for recoveryofprincipal amount ofRs3AO lacs alongwith interestfrom August 1 2000till the dateoffllingofthe ofthe SUlt 16 July 25 2003 filed under Order 37 CPC The plaintif claimed that a sum of S Rs448001 is payableto theplaintiff on the basis of a receipt s KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 80 RSAe Noe3216 of2007 121 0 b 0 1 dated August 1 2000 The plaintiffe the notes and receipts to theappellant for paymentbut he refusedto paythe sum givinga cause of action to the plaintiffe to file a SUlt The defendant appellant had appeared within stipulated periodand later on summons for thejudgment were served upon him ARerhe was e Q served throughsummons for judgmentthe defendant had filed an 0 1 application for leave to defend Vide order datedNovember 16 2005 the C3 application filed bythe defendantwas allowed subject to fumishingsecurityl I C5 indemnitybond lIl the sum of Rs6 lacs but as the defenda appellant failed to 8unish the sameinspiteofthe extenSlOOof time givento him the Z SUit of the plaintiffm was decreed for recovery of RsAO lacs alongwithinterestat the rate of 12m112Io per annum we Augustl 2000 I till the date of fllingof the SUlt 1 July 25 2003 with proportionate costs 06 Plaintiff was also held entitled to interestat the rate of 6Io per annum on principalamount of Rs3A0 lacs from July 26 2003 till realization of the 7 Z r1 principalamoun The said decree was challengedby the defendante appellant before the lower Appellate Court The appealwas dismissedby the lower Appellate Court videjudgment and decreedatedFebruary l 2007 This appealhas been preferredby the defendar appellantraisingthe followingsubstantialquestions of law i9 Whether theapproachof the trial Court in grantof leave to defend imposing condition of fumishing of suretyto the extentof more than threetimes of KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 81 ReSeAeNoe3216 of2007 131 09 r 0 0 J the principalamount there beingtriable issues u1 tO involved in the committing case an act of illegality Since the suit of theplaintiftl has been decreed Oll account of defendantppellanthavingnot compliedwith a condition 1 imposed at the time of grantof leave to defend it has becomenecessaryto 0 ascertainwhetheron account ofnonefulfilment ofa condition the suit ofthe C plaintiffl could have been decreed The lower Appellate Coun I C while dismissingthe appealof the appellanthas held that since the defendant appellanthad failed to challenge the order datedNovember 16 Z 2005 by takinglegal and has failed to complywith the tr condition imposed upon him which was a condition precedent to grantleave I to defenddespitehavingbeen granted sufficient therewasno 08 groundto reverse thejudgment anddecreepassedby thetrial Coun 7 Learned counsel for thedefenda appellant has contendedthat Z 1 Since the defendant had raised triable issues as noticed in order dated m 1 November 16 2005 and had placedon record sufficient materialto contend that NareshKumar Malhotra and Mohan Lal Malhotra had visited Delhi and forced the defendantto signthe promoteswhich were without consideration ri ln view of the that seven protes in favour of PushpaRani SlX protes in favour of Kashmir l l pronotesin favour of Janak Ram Oll one date ie Augustl 2007 it cannot be said that any considerationhad been passed The defence raisedby the defenda appellant4basically 1S KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 1 RSAe Noe3216 of2007 141 Clj 0 that no pronotehasactually been executed plaintiffe It was also argued that the lower Appellate Court has failed to that the order datedNovember 16 2005 was iliegalto the extent that it imposed a condition upon the defendantto mish surety bonds in the sum of Rs6 lacs with one suretyin the like amount the order m beingiIlegalto that extent was not liable to becomplied with 0 Counsel for the respondent has arguedthat the order dated 0 November 16 2005 by Vlrtue of which leave to defend was grantedto the I C5 appellant had not been by filing any revlSlOll I therefore it was not open for the defendan appellant to challenge the same Z before the lower Appellate Court It was contendedthat the lower Appellate r Court has rightlyaffirmed the order of the trial Court decreeingthe suit of theplaintif 06 I have heardcounsel for thepartiesand gone through the facts and circumstancesof this case The relevant portionof the order dated 7 Z 9 November 16 2005 passedby the Civil JudgeFerozepurwhile granting 0 r relief to the defendantmappellant to defend the suit subjectto 81mishing securityreadsas followsl 5 Since the defendanthas denied the execution of the pronoteandreceiptin questionas pleadedby theplaintiff so thereare triable issueswhich can onlybe decidedafter both the partieslead their evidence in supportof their 1 Irespectivecontentions The defence taken by the 1 KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document i 1 83 RSAe Noe3216 of2007 151 0 53 adduced In theinstantcase at this stageit cannot be said as to whether the defence is frivolous or vexatious In case Intemational ComputersConsultants Vsoine ComputerService 6P9Ltd 1997 29Civil Court cases 1 402 Delhi9it was held that leavemay be grantedsubject 0 to such conditions as the Courts deemsjust reasonable 0 upon the facts and circumstancesof the case I C5 Takinginto considerationthe facts and circumstancesof I the case theapplication madeby the Z 1S allowed and defendantis granted leave to defend the r SUlt subjectto his 8lmishingsuretybond in the sum of I Rs6000001 with one suretyin the Iike amount Il 08 12 It is specificallynoticed in the abovesaid order that therewere 7 triable issueswhich could onlybe decided aer both the partiesled their Z 11 evidencein supportoftheir respective contentions J The substantialquestion of law which anses for adjudication in thppeal are1 6i9 Whether the grantof the leave to the defendmt lmpOSlng t40 condition of fumishingsurety1S EU1 illegalorder in Vlew of the observationof the trial Court thatthereare triable issues2 KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document Il 1P 84 ReSAe Noe3216 of2007 161 0 r J 9 6ii9 Whether therightto challenge an order which W8S subjectto revlSlO10 his memorandumof appeal filed from the decreepassedby the trial Court did not exist2 A perusalofthe order indicatesthat the trial Court had granted tr leaveto defendholdingthattherewere triableissueswhich could be decided 0 after both the partiesled their evidence in supportof their respective 0 contentions The said observationwas made on the application for leave to I 1 C5 contest the case therein that the defendant had denied the n executionof six prootes andreceipts allegedto havebeen executedby hiom Z 111 favour of the plaintiffon singleday 1ee August1 2000 He had also C challengedthat no consideration had been passed8om the plaintiffe I respondent to the defendantwappellantbesides raisingthe plearegarding 08 absence ofjurisdiction with the civil Courtsat FerozepurThe defendanthas also raised a pleathat he was admittedin hospital 111Delhi on July1 2000 W2 ZIl He remained admitted as indoor patienttill July 4 2000 He had been j followingup his medical check ups in All India Institute of Medical Sciences New Delhi on July26 2000 July29 2000 July30 2000andJuly 31 2000 and was requiredto report on August4 2000 Mohan Lal Malhotra and his son Naresh Kumar Maihotra by takingup eW advantage of the defendanteappellant visited Delhi on August1 2000 and defendantppellantto signseveral promotesand receiptswhich were approximately over Rs13 lacson false retext The defendanthad refused KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 85 RSA Noe3216 of2007 171 0 n d 55 0 to signthe pronotesand receiptsbut when he hundies and pronotesworth Rs65 lacs would be used againsthim and he would suffer loss the defendan pronotes and receiptson the same dayat Delhi Writer of all the receiptswas Naresh Kumar Malhotra son ofMohan Lal Malhotra 1tr The above notedcontentionsand allegations of the defendant qv wt 0 been noticed in orderto determine facts and C 04 Clrcumstances of the presentcasewould fall undee principles laid down C5 in respectof grantof leave in summary suits as laid down in thejudgment of Mls Mechalech Engineers and Manufacturers v Mls Basic Z EquipmentCorporationAIR 1977SC 577 followingSmt Kiranmoyee 1 r Dassi ve DreJeChatterjee 1945949 CWN 249 Followingprinciples have I been laid down in respectof grant of leave in summary suits in the 08 abovesaidcasesl vm a Ifthe defendantsatisfiesthe court thathe has a good ZO defence to the claim on its merits the plaintiffis not jlJ entitled to Ieave to signjudgmentand the defendant 1S entitledto unconditionalleaveto defend b9 If the defendantraises a triable issue indicatingthat he has a fair or bona fide or reasonabledefencealthough nota positivelygooddefencethe plaintiffis not entitled to sign judgmentand the defendant is entitled to unconditionalleaveto defend KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 86 RSAe No 3216 of2007 181 0 r 5 6c9If the defendant discloses as may be deemedsufficient to entitlehim to defend that is to say althoughthe affidavit does not positivelyand make it clear that he has a defence yet shows such a state of facts as leads to the inferencethat Q at the trial of the action he may be able to establish a 0 defenceto theplaintiffsclaim theplaintiffis not entitled C to judgmentand the defendant is entitled to leave to I C5 defend but in such a case the court may in its discretion I imposeconditions as to the time or mode of trial but not Z as to paymentintoEourtolmishing security dl Ifthe defendanthasno defenceor the defenceset I 1S illusoryor sham or practicallymoonshine then 08 ordinarilythe plaintiff1S entitled to leave to sign 7 judgmentand the defendant is not entitled to Ieaveto Z defend 1 e9 If the defendant has no defence or the defence 1S 1 illusoryor sham or practicallymoonshine then 1 althoughordinarilythe plaintiffis entitled to leave to Slgnjudgmentthe court may protecttheplaintiffbyonly allowingthe defenceto proceed ifthe amount claimed 1S paidinto ourt or otherwisesecuredand giveleaveto the KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 87 ReSeAeNoe3216 of2007 l9l 0 4 I7 defendanton such condition the defendantbyenabling him to try to prove a defence 37 The facts and circumstancesof this cas on pleastaken by the defendant appellantseekingleave to defend show that the case of the defendant appellant will fall under cIause b as the defendanthas raised 1r triable issues indicatingthat he has a reasonable defence ln such 0 circumstancesthe defendant appellantis entitled to unconditionaI Ieave 0 to defend I C I have consideredthe contentionsof counsel for the plaintiff I and the findingsof the lower AppellateCourt that order dated Z November 16 2005 havingnot beenchallengedby way ofrevision petition m 0 the defendan appellant can be denied a rightto challenge the said order in I appealThe said question ln view of a recent judgmentof Wada Arun 08 Asbestors P1 Ltde ve Gujarat Water SuppIy SewerageBoard 2009 mmw 611RCR 6Civill425 passedbytheApexCourt IS no more res integra The Z 1 ApexCourt has by referring to provisions of Sections96 and 105 CPC k Ill held that when a leave to defendis refusedto defendant a revision agalllst the order is maintainablebut if no revision 1S filedit would be for the defendantto raisethe said contentionin theappealagainst the decree for recovery of money In Wada Aruns case supra the Apex Court lll context to the impositionof condition while grantingleave to defend observedas follows KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 88 ReSeAeNoe32160f2007 1101 0 5 18 The leamedJudgehas to see proofcanonlycome atlerthe defendanthas beenallowed to enter an appearanceand defend the suit and that the nature of the defence has to be determinedat the time when the afTidavit is put 1ne At that stage ll that the m Court hasto detennineis whether if the factsallegedby 0 the defendantare dulyprovedtheywill afford a good or 0 even a plausibleanswer to the plaintiffsclaim Once the C5 Court is satisfied about that leave cannot be withheld and no questionabout imposingconditions can arise and Z once leave is grantedthe normal procedure of a suit SO r far as evidenceand proofgoobtains 19 The learned High Court Judgeis also error in OS thinking that even when the defenceis a goodand valid em one conditions can be imposedAs we have explained Z 1 the power to imposeconditions is onlythere to ensure Ax that there will be a speedytrial If there is reason to believe that the defendant is trying to prolongthe litigation andvade a speedy trial then conditions can be imposedBut that conclusion cannot be reachedsimply becausethe defendantdoesnot adducehis evidence even beforehe is told thathe may defendtheaction 99 KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document 89 RSA No 3216 of2007 Illl 4e J Conditional Ieaveto defend 1S not in the facts of presentcase as thereis reasonabletriable defenceavailable to appellant and act of not filingof revision petitionagainstconditional leave will not debar therightsofappellant to raisechallenge to the same in appeal In view ofthe substantialquestionoflaw which hasbeenraised 1 and right of appellantto contest the suit having not been properly 0 by the Courts below the and decreespassedby the C trial Court as well as lower AppellateCourt deserveto be set aside The I C5 and decreespassedbythe Courts ofCivil Judge6JuniorDivisionl I er Ferozepurdated February 10 2006 and Additional District Judge Z datedFebruaryl 2007 are herebyset aside and it is directedthat e r the trial Court will proceedwith the case after permittingthe defendantto I flle written statement in accordancewith law andwould adjudicate the claiin 08 Clo ofthe plaintift by amingofissues andpermiuing thepaniesto Ieadtheir evidencein context to their claims mvm Z Appealis allowed The appellant will be entitled to the cost of appeal 0m Partiesare directedto appear before the trial Court on February6 2010 for further in accordancewith law 4 December21 2009 MMBEDII sanJay JUDGE r r457P C 81IOl KUMAR SURESH SHAM LAL 2012.07.28 13: 57 True Scanned Copy of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:00 I attest to the accuracy and integrity of this document