CIVIL REVISION NO.6235 OF 2005 :{ 1 }: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: MAY 12, 2008 The Sherpur Brick Workshop Co-operative Industrial Society Limited, District Sangrur and others .....Petitioners VERSUS M/s Hasija Coal Traders, District Fatehgarh Sahib and another ....Respondents CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH 1. Whether Reporters of local papers may be allowed to see the judgement? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? PRESENT: Mr. K. S. Chahal, Advocate, for the petitioners. None for the respondents. **** RANJIT SINGH, J. The petitioners are aggrieved against the order granting them permission to defend the suit subject to furnishing a bank guarantee in the sum of Rs.17,71,158/- within a period of one month from the date of order. Respondent-plaintiffs have filed a suit against the petitioner-defendants for recovery of Rs.17,71,158/- alongwith future interest at the rate of 15% per month. This suit is filed under Order CIVIL REVISION NO.6235 OF 2005 :{ 2 }: 37 of CPC. The petitioner-defendants raised an objection with regard to maintainability of the suit on the ground that the mandatory provisions have not been complied with and the summons were not issued on a proforma prescribed under Order 37 of CPC. They further raised a plea that the suit was hopelessly time barred and no amount was due from them. It is also pleaded that the suit filed by the respondent-plaintiffs is based on forged and fabricated documents, besides raising plea in regard to jurisdiction of the Court to try and entertain the suit in the absence of locus to the defendants under Section 79 of the Punjab Cooperative Societies Act. Reliance is also placed on number of judgments in support of the contention raised by the petitioners. Counsel representing the plaintiffs, on the other hand, simply stated that if the petitioner-defendants are to be granted leave to defend the suit, then they should be directed to furnish security in the form of a deposit of said amount in the court or in the form of bank guarantee. The Court by observing that huge amount is involved and the cheques issued were honoured, decided to impose condition on the defendants while granting leave to defend the suit. The same is now impugned through the present revision petition. Notice of the revision petition was issued. Initially, the Trial Court was directed to proceeded with the suit without insisting upon the petitioners to furnish bank guarantee as directed. This order, however, was vacated on 24.9.2007, when no one appeared for the petitioners on the said date. Today, when the case was listed for hearing, a written request for adjournment was made, which was CIVIL REVISION NO.6235 OF 2005 :{ 3 }: opposed by counsel for the petitioners on the ground that he was simply informed telephonically but no concurrence for the said adjournment was taken. Accordingly, the counsel who appeared for the respondents was apprised of this situation and was directed to make arrangement for arguing the case as adjournment in this background could not be granted. When the case is taken up in the second round, no one appears for the respondents. The learned counsel for the petitioners contends that once it was decided by the Court that the petitioners are entitled to leave to defend the suit on the basis of defence raised by them, then the conditions could have been imposed. In this regard, he has placed reliance on the ratio of law laid down in M/s Mechalec Engineers and Manufactures Vs. M/s Basic Equipment Corporation, AIR 1977 SC 577. The principles which would govern in regard to grant of leave to defend on the basis of a condition are as follows:- “(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 CIVIL REVISION NO.6235 OF 2005 :{ 4 }: say, although the affidavit does not positively and 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 illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign 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.” It is, thus, noticed that where the defendant satisfied the Court that he has a good defence to the claim on its merit, then the CIVIL REVISION NO.6235 OF 2005 :{ 5 }: plaintiff is not entitled to leave to sign judgment and in such a case, the defendant would be entitled to unconditional leave to defend. Where defendant has raised a triable issue indicating that he has a fair or bonafide or a reasonable defence, although not a positive or good defence and the plaintiff is not entitled to sign judgment, then again the defendant is entitled to unconditional leave to defend. Only in the remaining situations, as noted in the judgment of M/s Mechalec Engineers and Manufactures (supra), the conditional leave to defend can be granted or denied altogether. It is clear that the Trial Court has not informed itself of the position of law as would emerge from the case of M/s Mechalec Engineers and Manufactures (supra). Once the Trial Court found that the defendants have raised a good defence or defence raised is fair or bonafide or reasonable one, then the petitioner-defendants would be entitled to unconditional leave to defend. Accordingly, the condition imposed by the Trial Court while granting leave to defend to the petitioners can not be sustained. The same is set-aside. The petitioners would have unconditional leave to defend the suit. The petition is accordingly allowed. May 12 ,2008 ( RANJIT SINGH ) khurmi JUDGE