Krishanlal Khanna vs Shashi Sen and Others

G.S. Singhvi, J.—Decree passed by the learned Senior Sub-Judge, Amritsar, has been challenged in this revision petition on the ground that the same is contrary to Order 37, Rule 3, C.P.C.

On 2.11.1993 the plaintiff-Respondent filed a suit under Order 37, for recovery of Rs. 43,000/- allegedly given as loan to M/s Raman Woollen and Silk Mills through Shri Piara Lal Khanna. According to the plaintiff-Respondent the defendants failed to make repayment of the loan necessitating filing of the suit. Summons were served on the defendant-petitioner on 8.12.1993 and he appeared before the trial Court on 16.12.1993. On 17.1.1994 the plaintiff-respondent filed an application to issue summons for judgment but before that the petitioner and other defendants filed an application under Order 37, Rule 3, C.P.C. for leave to defend the suit. This application of the petitioner has been dismissed by the learned Senior Sub-Judge.

I have heard Shri B.R. Mahajan, learned counsel for the petitioner, and Shri H.S. Mattewal, Senior Advocate, with Shri J.S. Gill, Advocate, for respondent No. 1.

In the impugned order the learned Senior Sub-Judge has made reference to the argument of the parties on the prayer made by the defendants (including the petitioner) for defending the suit and then recorded his conclusion in the following words:-

" I have considered the arguments advanced by the learned counsel for the parties. I have also carefully perused the applications filed by the defendants. No sufficient grounds have been taken by the defendants in the application under disposal. There is difference in taking the defence in the application earlier filed by the defendants when they put in appearance in the Court and the application for granting permission to them. I have also carefully considered the authorities cited by the learned counsel for the defendants. The authorities cited by the learned counsel for the defendants are not applicable to the facts of the present case. In the present case summons were served upon the defendants on 17.12.1993 but they only put in appearance on 16.12.93 and they moved an application. There is a difference in the application under disposal. The pronotes were presented to the defendants for payment by the plaintiff but they failed to make the payment."

A look at the objection raised by the petitioner in his application for leave to defend the suit shows that he had pleaded before the trial Court that the suit was not maintainable against him because he was neither the partner of the firm nor had he got any concern with it. He also pleaded that partnership business was separate and he had nothing to do with it. The petitioner further pleaded that he had not received any loan nor had he executed the pronote. The learned Senior Sub-Judge has no doubt made reference to the various points raised by the petitioner but has not dealt them while recording a conclusion that the petitioner has not been able to show any substantial defence for opposing the suit.

In a catena of cases the Supreme Court and High Courts have examined the scope of Order 37 and have held that leave to defend should be accepted if the defendant satisfies the Court that he has a good defence to the claim filed by the plaintiff. Similarly, if the defendant raises a triable issue, the defendant is entitled to leave to defend. Even in a case where the defendant discloses facts which may enable him to defend the suit, the Court should normally grant leave to defend subject to appropriate conditions. Only in cases where the defence is found to be illusory or sham or frivolous that the Court can decline the leave to defend.

The learned trial Court has failed to apply the afore-mentioned principles while rejecting the application filed by the petitioner for leave to defend and this has resulted in failure of the trial Court to exercise jurisdiction vesting in him. Resultant decree passed by the trial Court has occasioned substantial failure of justice to the petitioner.

Consequently, the revision petition is allowed, the impugned decision is set aside and the case is remanded back to the trial Court for a fresh decision on the application filed by the petitioner for leave to defend. The parties are left to bear their own cost.