Premshri Prime Properties Pvt. Ltd. Indore And Others vs Dhara Singh

The petitioners have filed this petition challenging the part of the order dated 17/09/2019 passed by XI Civil Judge, Class-I, Indore in civil suit

No.508/2018 whereby the leave to defend has been granted to the petitioners subject to condition to furnish Bank Guarantee.

The respondent/plaintiff filed a civil suit for recovery of amount of Rs.06.07 Lacs under Order XXXVII Rule 1 and 2 CPC thereby alleging that

respondent's father-in-law Shri Ritesh Shah, personal friend of Rajendra Mantri had personal relations with petitioners No.1 and 2, as a result of which

loan of Rs.5.50 Lacs was given in cash on 04/01/2018 to plaintiff and since the plaintiff has failed to pay the loan of Rs.5.50 Lacs alongwith interest,

therefore, summary suit was filed against the petitioners. The petitioners/defendants marked their presence and moved an application under Order

XXXVII Rule 3 (5) of CPC thereby seeking leave to defend. The Court below after hearing the parties have passed an order dated 17/09/2019

whereby coming to the conclusion that there is prima facie case of the petitioner as there was no previty of contract and there was no personal or

professional relationship between plaintiff and defendants and the plaintiff has produced on record a cheque which was misused as the said cheque

was given by the petitioners to third part, which have been misused by the respondent and therefore, leave to defend was granted but with a direction

that petitioner will have to deposit Bank Guarantee of full alleged loan of Rs.5.50 Lacs. Being aggrieved by the said order, the petitioners have filed

the present petition.

Learned counsel for the petitioners submit that the condition imposed on the petitioners by the Court below for furnishing Bank Guarantee of

Rs.5.50 Lacs is illegal and arbitrary. He relied on the judgment passed by the Apex Court in the matter of IDBI Trusteeship Services Ltd. vs.

Hubtown Ltd. reported in (2017) 1 SCC 568 wherein it has been observed that if the defendant satisfies the Court that he has a substantial defence,

then, he is entitled to leave to unconditional leave to defend the suit. In such circumstance, it is prayed that the impugned order be set-aside and

petitioners may be permitted to leave to defend the suit unconditionally by allowed this petition.

On the other hand, learned counsel for the respondent supports the order passed by the Court below and submits that the Court below while

granting leave to defend in favour of the petitioners has rightly imposed the condition. He relied on the order passed by this Court in the matter of

Pradeep Gupta vs. M/s Pawan Industries passed in W.P. No. 4511/2017 on 16/08/2017 and prays for dismissal of the petition.

Heard learned counsel for both the parties and perused the record.

In the present case, the petitioners have filed this present petition challenging the part of the order dated 17/09/2019 whereby the Court below has

granted leave to defend to the petitioners subject to condition that they will deposit Bank Guarantee to the tune of Rs.5.50 Lacs.

Learned counsel for the petitioners submit that the learned Court below has given a finding that there is no previty of contract and there is no

professional or personal relationship between the parties, therefore, in such circumstances, petitioners have raised a triable issue before the Court

below and Court should have been granted unconditional leave to defend in favour of the petitioners. He relied on the judgment passed in IDBI

Trusteeship Services Ltd. (Supra) wherein the law laid down by the Apex Court are as follows :-

“(I) Leave to defend can be granted unconditionally to defendant in cases where (i) the defendant satisfies the court that he has a substantial

defence, that is, a defence that is likely to succeed, and ordinarily where (ii) the defendant raises triable issues indicating that he has a fair or

reasonable defence, although not a positively good defence.

(II) Further, leave to defend should be refused when the defendant has no substantial defence and/or raises no genuine triable issues, and the court

finds such defence to be frivoulous or vexatious â€" Further, when any part of the amount claimed by the plaintiff is admitted by the defendant to be

due from him, leave to defend the suit, (even if triable issue or a substantial defence is raised), shall not be granted unless the amount so admitted to be

due is deposited by the defendant in court.â€​

In the present case, the trial Court itself in its order has stated that there is prima facie case in favour of the defendants/petitioners as well as the

defence to be frivolous or vexatious. Trial Court has not expressed any opinion regarding the claim raised by the respondent and failed to record the

reasons as to what is the doubt with regard to defendants/petitioners good faith or the genuineness of triable issue, and therefore asked the petitioners

to furnish the Bank Guarantee.

So far as judgment relied by the respondent is concerned, that would not applicable in the present case, because in that case trial Court has

expressed doubt in the matter.

In view of the aforesaid, present petition is allowed and the part of the order dated 17/09/2019 passed by XI Civil Judge, Class-I, Indore in civil suit

No.508/2018 whereby the leave to defend has been granted to the petitioners subject to condition to furnish Bank Guarantee for a sum of Rs.5.50

Lacs stands quashed.

Accordingly, petition stands disposed of finally. C.C. as per rules.