Asheesh Mahajan vs Deltron Limited

Swatanter Kumar, J.—This revision is directed against the order passed by the learned Sub Judge, Chandigarh on 13.2.1998 granting conditional leave to defend to the defendant applicant.

The contention of the learned counsel for the petitioner is that the applicant had already executed a bond in favour of the plaintiff and as such the learned Court has erred in imposing a condition of furnishing a surety bond of the suit amount. In order to appreciate the merit of this contention reference to basic facts would be necessary.

Petitioner herein, defendant in the suit, was employed on 13.6.1995 as an Engineer Trainee with the plaintiff-Company on a basic salary of Rs. 3,400/- per month along with other benefits as per terms and conditions of the employment. The petitioner was specifically provided that he would have to serve for a period of two years, at least, after the completion of probation period of one year. In default of Clauses 3 and 7 of the agreement, the petitioner was liable to pay liquidated damages and also the salary for at least 3 years on the basis of last drawn salary at the time of leaving employment by the petitioner. These terms and conditions in the form of an agreement and bond were executed by the petitioner on 17.8.1995. The plaintiff, as such, was to serve for a minimum period of 3 years from the date of joining, it is alleged by the present respondent that the petitioner started absenting himself from duty w.e.f. 3.2.1996 and he was called upon to report for duty vide letters dated 14.2.1996 and 21.2.1996 but of no consequence. Later, the respondent also learnt that the petitioner had joined M/s NODE Limited. Thus, giving cause to the plaintiff to file the present suit on the basis of written agreement dated 17.8.1995 under the provisions of Order 37 of the Code of Civil Procedure. The petitioner filed an application for leave to defend after having been served with the summons in the suit. The petitioner raised various preliminary objections including that no proper summons were served upon the defendant in accordance with the provisions of Order 37 and also pleaded that he was thrown out of the employment and he had not committed breach of the terms of agreement. The learned trial Court vide its order dated 13.2.1998 granted the conditional leave to the petitioner to defend the suit.

The relevant part of the order reads as under: -

"xx xx xx xx 5. Since the defendant has not been served in accordance with the provisions of Order 37 CPC and this fact requires evidence, whether the defendant himself left the job. However, in order to secure the suit amount, the leave to defend is allowed subject to furnishing of surety bonds in the suit amount. Accordingly, the application is hereby allowed, xx xx"

It is this order which has been assailed in the present revision. The short controversy that falls for determination in this case is unjust and improper in the facts and circumstances of this case.

A suit under the provisions of Order 37 of the CPC has to be tried as summary proceedings in accordance with the provisions of the said Order. A bare reading of the impugned order shows that learned trial Court has applied its mind to various controversies arising in the present case and then has granted conditional leave to defend the suit to the applicant. Triable issues arise in the case. It is then alone that the Court has to consider the question whether leave to contest the suit should be granted conditional or its should be unconditional. In the present case execution of the agreement-bond is admitted. It is also admitted that petitioner did not work after the afore-referred date. It is another question whether the service of the summons effected upon the petitioner was strictly in consonance with the provisions of Order 37 of the Code or not. The Court also has to determine the question during the course of trial whether the petitioner himself left the employment or he was not permitted to attend to his duties by the respondent itself. These are the few questions which have attracted the attention of the learned trial Court for its determination during trial. But it certainly does not mean that the applicant is entitled to an unconditional leave. Clauses 3 and 7 of the agreement between the parties create a liability on the part of the applicant if the conditions stated therein have been violated by the applicant and the respondents are able to show that they had discharged their obligation as contemplated in the terms of the agreement.

The learned counsel for the petitioner has placed reliance upon a recent judgment of the Hon''ble Supreme Court of India in the case of M/s. Sunil Enterprises and Another Vs. SBI Commercial and International Bank Ltd., where the Court has held as under:-

"xx xx xx xx 4. The position in law has been explained by this Court in Santosh Kumar Vs. Bhai Mool Singh, ; Milkhiram (India) Private Ltd. and Others Vs. Chamanlal Bros., and Mechelec Engineers and Manufacturers Vs. Basic Equipment Corporation, . The propositions laid down in these decisions may be summed up as follows:-

(a) If the defendant satisfies the Court that he has a good defence to the claim on merits, 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 possibly good defence, 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, if the affidavit discloses that at the trial he may be able to establish a defence to the plaintiffs claim, the Court may impose conditions at the time of granting leave to defend-the conditions being as to time of trial or mode of trial but not as to payment into Court or furnishing security.

(d) If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, 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, the Court may show mercy to the defendant by enabling him to try to prove a defence but at the same time protect the plaintiff imposing the condition that the amount claimed should be paid into Court or otherwise secured.

In fact in identical matters on the file of the said High Court in summary suit No. 2963 of 1990 Dena Bank v. Sunil Enterprises and summary suit No. 1153 of 1989 Bank of India v. Mahendra Sarabhai choksi, leave to defend had been granted to defendants.

"xx xx xx xx It cannot be said that the defence raised by the appellants is totally defenceless or moonshine or illusory as noticed earlier in the course of this order. Therefore, the view taken by the High Court that appellants have absolutely no prima facie case, may not be correct. And in the circumstances, we allow appeals, set aside the order made by the Division Bench and the judge on the original side of the Bombay High Court and dismiss the Summons for judgment, grant leave and direct unconditional leave to the defendant to defend the suit. Appeals, therefore, stand allowed accordingly."

In the above judgment the Hon''ble Apex Court has reiterated the various principles enunciated by the Hon''ble Supreme Court in its earlier decisions which are well settled. They do not leave the scope for any controversy, but every case has to be decided on its own facts. In that case a plea of fraud was taken and it was stated that the Bank and the party had colluded together to play a fraud upon the applicant and frustrated his rights in law. That certainly is not the case here.

There is no plea of fraud nor any such other substantial plea has been raised which would justify grant of unconditional leave to defend to the applicant. Further more, the condition imposed by the learned trial Court "to furnish security" cannot be termed as such an onerous condition which would tantamount to frustrate the right of the defendant to fairly prove his case. The condition to furnish surety bond in the facts and circumstances of the case appears to be a just and a fair condition. The condition imposed creates a balance between the rival contentions of the parties and does not create any inequities against either of them.

In view of the above discussion, I find no infirmity in the impugned order. The present revision is dismissed. There shall be no orders as to costs.