Case: Milkhiram (India) Private Ltd. &amp; Others Vs. Chamanlal Bros

make it impossible to give effect to the provisions of O. 37 which have been enacted, as rightly pointed out by Bose, J. to ensure speedy decisions in cases of certain types. It will be seen that O. 37, R. 2 is applicable to what may be compendiously described as commercial causes. Trading and commercial operations are liable to be seriously impeded if, in particular, money disputes between the parties are not adjudicated upon expeditiously. It is these considerations which have to be borne in mind for the purpose of deciding whether leave to defend should be given or withheld and if given should be subjected to a condition. 6. It may be mentioned that this Court relied upon the decision in Jacobs v. Booths Distillery Co. (1901) 85 LT 262, in which the House of Lords held that whenever a defence raises a triable issue leave must. be given and also referred to two subsequent decisions where it was held that when such is the case leave must be given unconditionally. In this connection we may refer to the following observations of Devlin, L. J. in Fieldrank Ltd. v. Stein (1961) 3 All ER 681 at pp. 682-3. "The broad principle, which is founded on (1901) 85 LT 262, is summarised on p. 266 of the Annual Practice (1962 Edn.) in the following terms : "The principle on which the Court acts is that where the defendant can show by affidavit that there is a bona fide triable issue, he is to be allowed to defend as to that issue without condition." If that principle were mandatory, then the concession by counsel for the plaintiffs that there is here a triable issue would mean at once that the appeal ought to be allowed; but counsel for the plaintiffs has drawn our attention to some comments that have been made on (1901) 85 LT 262. They will be found at pp. 251 and 267 of the Annual Practice, 1962. It is suggested (see p. 251) that possibly the case if it is closely examined, does not go as far as it has hitherto been thought to go; and on the top of p. 267 the learned editors of the Annual Practice have this note: "The condition of payment into Court, or giving security, is nowadays more often imposed than formerly, and not only where the defendant consents but also where there is a good ground in the evidence for believing that the defence set up is a sham defence and the master is prepared very nearly to give judgment for the plaintiff." It is worth noting also that in Lloyds Banking Co. v. Ogle (1876) 1 Ex. D. 262, at p. 264 in a dictum which was said to have been overruled or qualified by (1901) 85 LT 262, Bramwell, B., had said that ". . . . . . . . . . . those conditions (of bringing money into Court or giving security) should only be applied when there is something suspicious in the defendants mode of presenting his case." I should be very glad to see some relaxation of the strict rule in (1901) 85 LT 262. I think that any Judge who has sat in chambers in R.S.C., Ord. 14 summonses has had the experience of a case in which, although he cannot say for certain that there is not a triable issue, nevertheless he is left with a real doubt about the defendants good faith, and would like to protect the plaintiff, especially if there is not grave hardship on the defendant in being made to pay money into Court, I should be prepared to accept that there has been a tendency in the last few years to use this condition more often than it has been used in the past, and I think that that is a good tendency;" These observations as well as some observations of Chagla, C.J., in Rawalpindi Theatres Private Ltd. v. M/s. Film Group Bombay, 60 Bom LR 1378 at p. 1374, may well be borne in mind by the Court sitting in appeal upon the order of the trial Judge granting conditional leave to defend. It is indeed not easy to say in many cases whether the defence is a genuine one or not and, therfore, it should be left to the discretion of the trial Judge who has experience of such matters both at the bar and the bench to form his own tentative conclusion about the quality or nature of the defence and determine the conditions upon which leave to defend may be granted. If the Judge is of opinion that the case raises a triable issue, then leave should ordinarily be granted unconditionally. On the other hand, if he is of opinion that the defence raised is frivolous, or false, or sham, he should refuse leave to defend altogether. Unfortunately however, the majority of cases cannot be dealt with in a clear cut way like this and the judge may entertain a genuine doubt on the question as to whether the defence is genuine or sham or in other words whether it raises a triable issue or not. It is to meet such cases that the amendment to O. 37, R. 2 made by the Bombay High Court contemplates that even in cases where an apparently triable issue is raised the Judge may impose conditions in granting leave to defend. Thus this is a matter in the discretion of the trial Judge and in dealing with it, he ought to exercise his discretion judiciously. Care must be taken to see that the object of the rule to assist the expeditious disposal of commercial causes to which the order applies is not defeated. Care must also be taken to see that real and genuine triable issues are not shut out by unduly severe orders as to deposit. In a matter of this kind, it would be undesirable and inexpedient to lay down any rule of general application.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]On the basis of these averments in the plaint the appellants contend that the only claim which the respondents had or could have against them is on the basis of the agreement that that claim would be for an unliquidated amount and that consequently the suit could not be brought under O. 37, Rr. 2 and 3 of the Code. It seems to us, however, to be clear from the perusal of the plaint as well as the affidavits of the appellants that the cause of action for respondents claim as laid in the suit is prima facie independent of the aforesaido doubt they advanced the money by way of financing the export business of the company but the right to repayment was absolute and unconditional. This is made clear by the subsequent agreement executed by the appellants 2 to 4. No doubt the respondents contend that they are also entitled to recover damages from the appellants under the agreement but according to them this claim is in addition to and not in substitution of that based upon the promissory notes and the indenture of guaranteeWithout expressing any view as to the correctness of the decision it is sufficient to say that what the High Court was dealing with there was a suit in which upon the same facts the plaintiff was, according to the High Court, not only entitled to sue but bound to seek two reliefs but sued only for one of them. In the case before us the reliefs claimed in the suit are distinct from the relief claimable on the basis of the agreement between partiesThe short answer to the question is that the respondent did make an application to the Court under O. 2, R. 2,, C.P.C., for leave to reserve their claim under the agreement for being adjudicated in another suit. The Court granted leave to them and, therefore, no further question arises. Moreover what we are concerned with is the claim made by the respondents in the present suit. Here they have sought relief only on the basis of the promissory notes and the indenture of guarantee. Even assuming that they were also entitled to other relief on the same cause of action it was certainly open to them even to relinquish their claims for other reliefs. The mere fact that they did so to avail themselves of the summary procedure provided in O. 37, could not affect their suit adversely. However, in this case the respondents obtained leave to reserve their claim based upon the agreement before they took out summons against the appellants under O. 37, R. 2,subr.2. That order was not challenged by the appellants and has become final between the parties so far as the present suit is concernedThat case is however distinguishable. There what was challenged was the order of the City Civil Court which granted leave to the defendant to defend that suit for recovery of a sum of Rs. 18725/upon the condition of depositing Rs. 7500/as security. It was urged before the High Court that where a subordinate court makes an order which is open to appeal or revision it should give some reasons in support of that order. No reasons having been given the order was set aside and the matter was remitted to the City Civil Court for passing a fresh order in accordance with law. While laying down the normal rule it does not appear to have been intended to make it inflexible. Nor again it appears to have been contemplated that elaborate reasons to support the imposition of conditions must be given. In the case before us the order made is by the High Court itself and not by the subordinate court. No doubt an appeal lay against it under the Letters Patent but that is merely an internal appeal in a High Court, which cannot be likened to an appeal under S. 96 or a revision application under S. 115 of the Code. Moreover O. 49, R. 3) provides that nothing contained in Rr. 1 to 8 of O. 20 will apply to any Chartered High Court in exercise of its ordinary or extraordinary civil jurisdiction. The provision relating to the giving of reasons in support of a decision are to be found in R. 4 of O. 20. Since these provisions do not apply to Chartered High Courts, like the High Court at Bombay the decision relied upon cannot be pressed in aidIt is indeed not easy to say in many cases whether the defence is a genuine one or not and, therfore, it should be left to the discretion of the trial Judge who has experience of such matters both at the bar and the bench to form his own tentative conclusion about the quality or nature of the defence and determine the conditions upon which leave to defend may be granted. If the Judge is of opinion that the case raises a triable issue, then leave should ordinarily be granted unconditionally. On the other hand, if he is of opinion that the defence raised is frivolous, or false, or sham, he should refuse leave to defend altogether. Unfortunately however, the majority of cases cannot be dealt with in a clear cut way like this and the judge may entertain a genuine doubt on the question as to whether the defence is genuine or sham or in other words whether it raises a triable issue or not. It is to meet such cases that the amendment to O. 37, R. 2 made by the Bombay High Court contemplates that even in cases where an apparently triable issue is raised the Judge may impose conditions in granting leave to defend. Thus this is a matter in the discretion of the trial Judge and in dealing with it, he ought to exercise his discretion judiciously. Care must be taken to see that the object of the rule to assist the expeditious disposal of commercial causes to which the order applies is not defeated. Care must also be taken to see that real and genuine triable issues are not shut out by unduly severe orders as to deposit. In a matter of this kind, it would be undesirable and inexpedient to lay down any rule of general application.